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Evolving comparative advantage, sectoral linkages, and structural change

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  • Sposi, Michael

Abstract

Intermediate-input intensities vary systematically with economic development across countries. These cross-country differences in input–output linkages account for 74% of the curvature in the hump shape in industry’s share in value added across levels of income per capita. This is twice as much as can be accounted for by variation in the composition of final demand. Using a three-sector, open-economy model of structural change I find that this result is robust to general equilibrium effects.

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  • Sposi, Michael, 2019. "Evolving comparative advantage, sectoral linkages, and structural change," Journal of Monetary Economics, Elsevier, vol. 103(C), pages 75-87.
  • Handle: RePEc:eee:moneco:v:103:y:2019:i:c:p:75-87
    DOI: 10.1016/j.jmoneco.2018.08.003
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    Cited by:

    1. Ana Maria Santacreu & Jing Zhang & Michael Sposi, 2019. "A Quantitative Analysis of Tariffs across U.S. States," 2019 Meeting Papers 259, Society for Economic Dynamics.
    2. Ricardo Reyes-Heroles, 2018. "Globalization and Structural Change in the United States: A Quantitative Assessment," 2018 Meeting Papers 1027, Society for Economic Dynamics.
    3. Logan T. Lewis & Ryan Monarch & Michael Sposi & Jing Zhang, 2018. "Structural Change and Global Trade," International Finance Discussion Papers 1225, Board of Governors of the Federal Reserve System (U.S.).
    4. Lidia Smitkova, 2018. "Does Openness Matter for Structural Change?," 2018 Meeting Papers 257, Society for Economic Dynamics.
    5. Michael Sposi & Jing Zhang & Kei-Mu Yi, 2018. "Accounting for Structural Change Over Time: A Case Study of Three Middle-Income Countries," 2018 Meeting Papers 1141, Society for Economic Dynamics.
    6. Rodrigo Adão & Costas Arkolakis & Federico Esposito, 2019. "General Equilibrium Effects in Space: Theory and Measurement," NBER Working Papers 25544, National Bureau of Economic Research, Inc.
    7. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    8. Michael Sposi & Jing Zhang & Kei-Mu Yi, 2019. "Structural Change and Deindustrialization," 2019 Meeting Papers 1328, Society for Economic Dynamics.
    9. Atolia, Manoj & Loungani, Prakash & Marquis, Milton & Papageorgiou, Chris, 2020. "Rethinking development policy: What remains of structural transformation?," World Development, Elsevier, vol. 128(C).
    10. Michael Peneder & Gerhard Streicher, 2018. "De-industrialization and comparative advantage in the global value chain," Economic Systems Research, Taylor & Francis Journals, vol. 30(1), pages 85-104, January.
    11. Diao, Xinshen & McMillan, Margaret, 2018. "Toward an Understanding of Economic Growth in Africa: A Reinterpretation of the Lewis Model," World Development, Elsevier, vol. 109(C), pages 511-522.
    12. Jaime Alonso-Carrera & Giulia Felice & Xavier Raurich, 2018. "Inequality and Structural Change under Non-Linear Engels' Curve," UB Economics Working Papers 2018/374, Universitat de Barcelona, Facultat d'Economia i Empresa, UB School of Economics.
    13. John C. Anyanwu & Joanna C. Anyanwu, 2018. "Accounting for the Rising Value Added in Services Compared to That in Agriculture in African Economies," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 476-500, December.
    14. Tomasz Swiecki, 2017. "Determinants of Structural Change," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 95-131, March.
    15. Seung Mo Choi & Hwagyun Kim & Xiaohan Ma, 2021. "Trade policies and growth in emerging economies: policy experiments," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(3), pages 603-629, August.
    16. Ryan Monarch & Jing Zhang & Logan Lewis, 2017. "Structural Change and Slowdown of International Trade," 2017 Meeting Papers 1542, Society for Economic Dynamics.
    17. Duernecker, Georg & Herrendorf, Berthold & Valentinyi, Akos, 2017. "Structural Change within the Service Sector and the Future of Baumol's Disease," CEPR Discussion Papers 12467, C.E.P.R. Discussion Papers.
    18. Akos Valentinyi & Georg Duernecker, 2017. "Unbalanced Growth Slowdown," 2017 Meeting Papers 822, Society for Economic Dynamics.
    19. Rodrigo Ad�o & Costas Arkolakis & Federico Esp�sito, 2019. "Spatial Linkages, Global Shocks, and Local Labor Markets: Theory and Evidence," Cowles Foundation Discussion Papers 2163, Cowles Foundation for Research in Economics, Yale University.
    20. Mariarosaria Comunale & Giulia Felice, 2019. "An empirical investigation of the relationship between trade and structural change," Bank of Lithuania Working Paper Series 62, Bank of Lithuania.
    21. Michael Sposi, 2015. "Navigating the Structure of the Global Economy," Annual Report, Globalization and Monetary Policy Institute, Federal Reserve Bank of Dallas, pages 10-17.

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    More about this item

    Keywords

    Input-output; Structural change; International trade;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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