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Capital Accumulation and Structural Change in a Small Open Economy

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  • Yunfang Hu
  • Kazuo Mino

Abstract

This paper explores the relation between capital accumulation and transformation of industrial structure in a small open economy. Using a three-sector neoclassical growth model with non-homothetic preferences, we examine the dynamic behaviour of the small country in the alternative trade regimes. We show that capital accumulation plays a leading role in the process of structural transformation. It is also revealed that the trade pattern significantly affects structural change. We demonstrate that our model can mimic a typical pattern of change in industrial structure that has been observed in many developed economies.

Suggested Citation

  • Yunfang Hu & Kazuo Mino, 2014. "Capital Accumulation and Structural Change in a Small Open Economy," Pacific Economic Review, Wiley Blackwell, vol. 19(5), pages 634-656, December.
  • Handle: RePEc:bla:pacecr:v:19:y:2014:i:5:p:634-656
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    File URL: http://hdl.handle.net/10.1111/1468-0106.12087
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    Cited by:

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    3. Makoto Yano & Takashi Komatsubara, 2014. "Participation of Ordinary Investors and Stock Market Quality: A Comparison between Japanese and US Markets," Pacific Economic Review, Wiley Blackwell, vol. 19(5), pages 537-558, December.

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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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