| The intent of this study is to explore the causes of macro-level structural changes and the implications of these changes for the macroeconomic fundamentals.;The cause of the recent sectoral composition change in the US is examined from the perspective of intangible capital accumulation. In the first theoretical model of the study, as the importance of intangible capital increases in the production functions---but at different rates across sectors---labor is shifted from direct goods production to creating sector-specific intangible capital. At the mean time, the real output and employment shares of the high intangible sector increase. The implications of the model are consistent with a series of structural-change-related stylized facts in the US economy. Empirically, it is shown that an industry's future growth in output and employment is strongly correlated with its intangible capital intensity. And the industries in which firms' intangible investments have a higher impact on firms' production tend to grow more.;The study then looks at the recent structural change in the production volatility patterns of the US, namely, a divergence in macro and micro level production volatilities. It is shown that as firms' organization capital becomes increasingly important in the production process, the impact of firm-specific risk factor rises, while that of general risk factor declines. The former raises firm-level volatility; the latter reduces aggregate volatility. Consistent with this theory, it is found that firm-level volatility increases with organizational investment, but general factors' impact on firm performance and a firm's production correlation with other firms decrease with organizational investment.;The study also investigates structural change patterns in different countries. With data from 28 industries across 15 countries, it is shown that at least for the overall capital, the shares of capital intensive industries are significantly bigger with higher initial capital endowment and faster capital accumulation. More importantly, there is a significantly positive relationship between a country's aggregate output growth and the degree of structural coherence in all types of capital. |
