Economic Diversification and Growth

Annexes
• Aggregate real wage index:
(8)
• Choice variables for the household problem: , and b t
for all t 2 [0;1) to maximize lifetime utility
function, Ut(.).
Firms:
• Non-tradable good firms in monopolistic competition à la Dixit-Stiglitz
• Tradable good firms in perfect competition
o Intermediate tradable good producers
o Final good producers
• A representative non-tradable goods firm chooses labor and capital to maximize its profit:
• This sector is subject to:
o Price rigidity
o Wage rigidity
• Intermediate good producers
• A tradable goods firm produces goods with the same technology in the non-tradable sector
• Each tradable firm maximizes its weighted present-value profits:
• Final good producers
• Aggregate intermediate and imported tradable goods
• Output in the natural resource sector follow an exogenous process
(9)
(10)
(11)
Annexes
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Uganda Country Economic Memorandum: Economic Diversification and Growth in the Era of Oil and Volatility