Abstract:  In order to better explain the real economic phenomena such as changes in economic structure and increasing returns to scale, new structural economics proposes the concept of endogenous production function. The structured production function is a special case of endogenous production function and it is composed of several production functions of nonincreasing returns to scale which work together through transition zones. A structured production function has the property of locally increasing returns to scale in the transition area. With a simple form, it often achieves structural multiple equilibriums in the corresponding economic model, so that it can describe economic reality in more details. In those economies with structural multiple equilibriums, it is hard to ensure economic transition from a lowlevel equilibrium to a highlevel equilibrium simply by relying on market mechanisms, thus calling for governmental policies on economic transition. Through the simulation analysis of the economic structure transition policy, we come to the conclusion that transition areas with different positions will lead to different degrees of difficulty in structural transition. When a transition area is close to the lowlevel equilibrium, those economic policies that use high investment and low consumption can help the economy to achieve structural transition. However, when the transition area is far away from the lowlevel equilibrium, external resources need to be introduced in order to achieve economic transition.

Key words: Key words： new structural economics, endogenous production function, structural transition, simulation method