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Structural transformation and productivity in Latin America

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  • Ferreira, Pedro Cavalcanti
  • Silva, Leonardo Fonseca da

Abstract

This article examines the e¤ects of sectorial shifts and structural transformation on the recent productivity path of Latin America. We use a four-sector (agriculture, industry, modern services and traditional services) general equilibrium model calibrated to the main economies in the region. The model very closely replicates labor reallocations across sectors and the growth of aggregate labor productivity from 1950 to 2005. Structural transformation explains a sizeable portion of the region s convergence in the rst decades. In most cases, the poor performance of the traditional services sector is the main cause of the slowdown in productivity growth observed in the region after the mid-1970s and is a key factor in explaining the divergence during this period.

Suggested Citation

  • Ferreira, Pedro Cavalcanti & Silva, Leonardo Fonseca da, 2014. "Structural transformation and productivity in Latin America," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 754, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:epgewp:754
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    References listed on IDEAS

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    1. Berthold Herrendorf & Ákos Valentinyi, 2012. "Which Sectors Make Poor Countries So Unproductive?," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 323-341, April.
    2. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 129-173.
    3. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    4. Marcel P. Timmer & Gaaitzen J. de Vries, 2009. "Structural change and growth accelerations in Asia and Latin America: a new sectoral data set," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 165-190, June.
    5. Norman Loayza & Pablo Fajnzylber & César Calderón, 2005. "Economic Growth in Latin America and the Caribbean : Stylized Facts, Explanations, and Forecasts," World Bank Publications, The World Bank, number 7315.
    6. Pedro Cavalcanti Ferreira & Samuel De Abreu Pessôa & Fernando A. Veloso, 2013. "On The Evolution Of Total Factor Productivity In Latin America," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 16-30, January.
    7. repec:idb:idbbks:279 is not listed on IDEAS
    8. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
    9. Eduardo Fernández-Arias & Juan S. Blyde & Indermit S. Gill & Alexander Monge Naranjo & Pablo A. Neumeyer & Carlos G. Fernández Valdovinos & Armando Castelar Pinheiro & J. Rodrigo Fuentes & Hugo A. Hop, 2005. "Sources of Growth in Latin America: What Is Missing?," IDB Publications (Books), Inter-American Development Bank, number 33798 edited by Eduardo Fernández-Arias & Juan S. Blyde & Rodolfo E. Manuelli, February.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Transformação estrutural, serviços e política industrial
      by Pedro Cavalcanti Ferreira in Economista X on 2014-10-08 00:09:00

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    Cited by:

    1. Murat Ungor, 2017. "Productivity Growth and Labor Reallocation: Latin America versus East Asia," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 25-42, March.
    2. repec:kap:jtecht:v:42:y:2017:i:6:d:10.1007_s10961-016-9528-x is not listed on IDEAS
    3. repec:eee:wdevel:v:98:y:2017:i:c:p:360-380 is not listed on IDEAS

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