chapter  3
Productivity–investment fluctuations and structural change
ByBERNHARD BÖHM AND LIONELLO F . PUNZO
Pages 46

In this chapter, we review the growth experience in the last two decades of three European countries and compare it with that of Japan and the US. The stylized facts of these economies (Sections 3.5-3.6) exhibit dynamic discontinuities in whose interpretation we employ concepts imported from dynamical systems and bifurcation theories. Relying upon a framework of cross-regime dynamics (introduced in Sections 3.2-3.6) where regime switches represent structural changes, our approach departs from traditional and modern growth theories also in two other respects. On one side, we use a sectorally disaggregated description of the economies. On the other, we focus on observed sectoral paths which are typically fluctuating, instead of looking for long run, steady states homogeneous within the dynamic structure of a given economy. In fact, dynamic heterogeneity turns out to be so pervasive that it has surfaced in recent growth literature.1