On Industrialization, Human Resources Training, and Policy Coordination

This paper proposes a dynamic model using a general equilibrium approach and shows that the coordination of public policies with suitable human resources training is a key factor for an economy to industrialize. We analyze three public policy domains: innovation policies; policies regarding human resources training, including wages and employment; and push policies. The omission or implementation of public policies, as well as their coordination, defines whether an economy stagnates in a poverty trap, or on the contrary, whether the economy is activated through industrialization processes. Such outcomes depend on what the initial state of the economy is like: whether it is on the left or the right of the industrialization frontier. The viability of crossing the industrialization frontier will depend on how these types of policies are coordinated.