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Structural Change in an Interdependent World: A Global View of Manufacturing Decline

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  • Kiminori Matsuyama

Abstract

This paper presents a simple model of the world economy, in which productivity gains in manufacturing are responsible for the global trend of manufacturing decline, and yet, in a cross-section of countries, faster productivity gains in manufacturing do not necessarily imply faster declines in manufacturing. In doing so, it aims to draw attention to the common pitfall of using the cross-country evidence to test a closed economy model, and argues for a global perspective; in order to understand cross-country patterns of structural change, one needs a world economy model in which the interdependence across countries is explicitly spelled out. (JEL: F43, O11, O14, O19) (c) 2009 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 7 (2009)
Issue (Month): 2-3 (04-05)
Pages: 478-486

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Handle: RePEc:tpr:jeurec:v:7:y:2009:i:2-3:p:478-486

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  1. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
  2. Acemoglu, Daron & Ventura, Jaume, 2001. "The World Income Distribution," CEPR Discussion Papers 2973, C.E.P.R. Discussion Papers.
  3. L. Rachel Ngai & Christopher Pissarides, 2007. "Structural change in a multi-sector model of growth," LSE Research Online Documents on Economics 4468, London School of Economics and Political Science, LSE Library.
  4. repec:fth:stanho:e-92-3 is not listed on IDEAS
  5. Daron Acemoglu & Veronica Guerrieri, 2006. "Capital Deepening and Non-Balanced Economic Growth," 2006 Meeting Papers 207, Society for Economic Dynamics.
  6. Francisco J. Buera & Joseph P. Kaboski, 2012. "The Rise of the Service Economy," American Economic Review, American Economic Association, vol. 102(6), pages 2540-69, October.
  7. Kiminori Matsuyama, 1999. "The Rise of Mass Consumption Societies," Discussion Papers 1289, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Buera, Francisco J. & Kaboski, Joseph P., 2012. "Scale and the origins of structural change," Journal of Economic Theory, Elsevier, vol. 147(2), pages 684-712.
  9. Francisco J. Buera & Joseph P. Kaboski, 2009. "Can Traditional Theories of Structural Change Fit The Data?," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 469-477, 04-05.
  10. Ventura, Jaume, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 57-84, February.
  11. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476.
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Citations

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Cited by:
  1. Francisco Alvarez-Cuadrado & Markus Poschke, 2009. "Structural Change Out Of Agriculture: Labor Push Versus Labor Pull," Departmental Working Papers 2009-08, McGill University, Department of Economics.
  2. Fernando Alexandre & Pedro Bação, 2012. "Portugal before and after the European Union: Facts on Nontradables," NIPE Working Papers 15/2012, NIPE - Universidade do Minho.
  3. Uy, Timothy & Yi, Kei-Mu & Zhang, Jing, 2013. "Structural change in an open economy," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 667-682.
  4. Holger Breinlich & Alejandro Cuñat, 2012. "Geography, Non-Homotheticity, and Industrialization: A Quantitative Analysis," CESifo Working Paper Series 3927, CESifo Group Munich.
  5. Robert Dekle, 2013. "Real Exchange Rates in a Model of Structural Change: Applications to the Real Yen-Dollar and Chinese RMB-Dollar Exchange Rates," IMES Discussion Paper Series 13-E-02, Institute for Monetary and Economic Studies, Bank of Japan.
  6. Timothy J. Kehoe & Kim J. Ruhl & Joseph B. Steinberg, 2013. "Global imbalances and structural change in the United States," Staff Report 489, Federal Reserve Bank of Minneapolis.
  7. Taketo Kawagishi & Kazuo Mino, 2013. "Time Preference and Income Convergence in a Dynamic Heckscher-Ohlin Model," KIER Working Papers 880, Kyoto University, Institute of Economic Research.
  8. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941 Elsevier.
  9. Sasaki, Hiroaki, 2012. "Endogenous phase switch in Baumol's service paradox model," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 25-35.
  10. Stijepic, Denis & Wagner, Helmut, 2008. "Impacts of Intermediate Trade on Structural Change," MPRA Paper 40841, University Library of Munich, Germany, revised 23 Aug 2012.
  11. Betts, Caroline & Giri, Rahul & Verma, Rubina, 2013. "Trade, Reform, And Structural Transformation in South Korea," MPRA Paper 49540, University Library of Munich, Germany.
  12. Hiroaki Sasaki, 2010. "Endogenous Phase Switch in Baumol’s Service Paradox Model," Discussion papers e-10-010, Graduate School of Economics Project Center, Kyoto University.

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