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Impacts of Intermediate Trade on Structural Change

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  • Stijepic, Denis
  • Wagner, Helmut

Abstract

Traditional structural change theories study the dynamics of inter-sector labour-reallocation in autarky models. We analyse how model-results change if open economy setting is assumed, where we focus on the impacts of intermediate trade in a multi-sector growth model with capital accumulation. We show that, when controlling for specialisation-effects, open economy features a relatively high employment share of capital/manufacturing sector and a relatively low rate of labour-reallocation across consumption industries in comparison to autarky. The process of tertiarisation (transition to a services economy) is relatively slow in the intermediate trade model in comparison to the autarky model.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40841.

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Date of creation: Feb 2008
Date of revision: 23 Aug 2012
Handle: RePEc:pra:mprapa:40841

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Keywords: structural change; factor reallocation; labour; multi-sector growth modelling; neoclassical growth theory; trade; intermediates; offshoring;

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