Structural Transformation in China and India: The Role of Macroeconomic Policies
AbstractThis paper explores macroeconomic policies that can sustain structural change in China and India. A two--sector open--economy model with endogenous productivity growth, demand driven output and income distribution as an important determinant of economic activity is calibrated to a 2000 SAM for China and a 1999/2000 SAM for India. Short-- run analysis concerns temporary equilibria for output, productivity and employment growth rates in the formal sector. In the long--run, the model allows for multiple equilibria which can describe cases of (a) underdevelopment and structural heterogeneity or (b) sustained growth and development. Several simulation exercises are conducted. Specifically, we consider how changes in investment, wages, labor productivity trend and a depreciation of currency affect the macroeconomy and job creation in the formal sector.
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Bibliographic InfoPaper provided by University of Utah, Department of Economics in its series Working Paper Series, Department of Economics, University of Utah with number 2011_05.
Length: 25 pages
Date of creation: 2011
Date of revision:
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Structural change; endogenous productivity; dual economy; China; India JEL Classification: O11; O41; E26;
Find related papers by JEL classification:
- Ind - Health, Education, and Welfare - - - - -
- JEL - Labor and Demographic Economics - - - - -
- Cla - Mathematical and Quantitative Methods - - - - -
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-MAC-2011-02-26 (Macroeconomics)
- NEP-TRA-2011-02-26 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rudiger von Arnim & Steve Bannister & Nathan Perry, 2013. "A global model of recovery and rebalancing," Cambridge Journal of Economics, Oxford University Press, vol. 37(4), pages 889-920.
- Codrina Rada & Rüdiger von Arnim, 2012.
"India’s structural transformation and role in the world economy,"
Working Paper Series, Department of Economics, University of Utah
2012_05, University of Utah, Department of Economics.
- Rada, Codrina & von Arnim, Rudiger, 2014. "India's structural transformation and role in the world economy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 1-23.
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