Structural economic dynamics in actual industrial economies

Despite the tight articulation between Pasinetti's natural economic system and measurable inter-industry magnitudes, contributions inspired by his framework of structural economic dynamics have either focused on analytical developments or empirically implemented some of its features in isolation. To bridge the gap between theory and empirics, this paper introduces a computable formulation of Pasinetti's dual system of prices and quantities, including its natural configuration, starting from a set of inter-industry accounting identities. The analytical properties of the computable framework are discussed, using the logical structure of a closed Input-Output model. By articulating a dataset collating different OECD databases, the scheme is empirically implemented to explore the structural dynamics of six advanced industrial economies between 1995 and 2015. In particular, we quantify the required injection to close a country's unemployment gap via a public intervention, use the natural configuration of the economy to relate the evolution of demand, productivity, wages and the general price level, and compare the emerging trends of job creation and displacement across countries and hyper-integrated sectors.