Abstract

ln this article Feldman’s model of investment allocation (1928) is disaggregated
to study the implications of introducing the structural change process in it. It means that the
analysis proposed here is carried out in a multi-sectoral framework, where both productivity
and demand are changing at a distinct rate in each sector. Feldman’s model is then shown to
be a particular case of Pasinetti (1981, 1993) and an equilibrium path is established. Finally,
we analyze the possibility of maintaining equilibrium over time and normative conclusions
are obtained.

JEL Classification: E12; E22; O11; O41.