Economic Growth In The Industrial Structure Adjustment

Influenced by Lewis, many scholars regard structural adjustment as the reason of economic growth. Most of them emphasize determinative effect of system on modern department. They believe it is exogenous factors rather than endogenous factors that determine industry structure upgrade. The other scholars believe that natural talents determine industry structure and the upgrade of industry structure depend on the comparative change of natural talents structure. Because the latter is mainly influenced by the degree of economic growth, the adjustment of industry structure is the outcome of economic growth rather than the reason. The shortage of unified theoretical foundations is the fundamental reason that leads to the said divergence. On the base of modern economic growth theory, this article provides a new structural growth model.The history of economic growth theory enunciates structural issues can be useful to improve the economic growth theory. In economic growth theory, men are always regarded as the fundamental element of economic growth, in same theory, men are always regarded as identical men. But the structure of wage enunciates that men possess certain exclusiveness, the existence of the latter weakens the concept of production function. From this point, we build a new total production function on the base of Lucas model. The features of the production function are: (1) it is represented by the addition of the production functions of two departments; (2) it reflects the change of spill effect.Next we discuss the equilibrium roads of economic growth and industry structure adjustment. On certain conditions industry structure adjust slowly and forcedly. In the process, the portion of newly risen industries amplifies and that of traditional industries reduces. Further analysis of the production function enunciate that both the rate of population increase and the character of industries determine economic growth and the change of industries structure in long-term.Because the increase rate of population is generally regarded as exogenous factor, we mainly analyze industries choice and its effects. We emphasize the possibility of low-level equilibrium and provide the methods of free itself from this kind of equilibrium. If international trade affect the price of newly risen industry largely, then the change of industries structure will turn worse, the portion of newly risen industries reduces and that of traditional industries amplifies, on this conditions, dynamic comparative advantage strategy is suitable.In total, we have conclusions as the follow: the first, the process of economic growth is the process of industries structure change; the second, both depend on the rate of population and the character of industries; the third, industry structure will evolve according to some rule; the last, if industry structure is harmful to economic growth, the government should intervene."Economic development is a process of structure change. The market is efficient in resource distribution according to profit, but is inefficient in leading to industry structure change, the latter may be critical to long term development. So the government should intervene those important departments to guarantee prosperous." This article can be regarded as formalized analysis of this.