We present a model in which two of the most important features of the long-run growth
process are reconciled: the massive changes in the structure of production and employment;
and the Kaldor facts of economic growth. We assume that households expand their
consumption along a hierarchy of needs and firms introduce continuously new products. In
equilibrium industries with an expanding and those with a declining employment share co-exist,
and each such industry goes (or has already gone) through a cycle of take-off, maturity,
and stagnation. Nonetheless macroeconomic aggregates grow pari passu at a constant rate.
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