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Deconstructing The BRICs: Structural Transformation And Aggregate Productivity Growth

  • Gaaitzen J. de Vries

    ()

    (Groningen Growth and Development Centre, Faculty of Economics and Business, University of Groningen)

  • Abdul A. Erumban

    (Groningen Growth and Development Centre, Faculty of Economics and Business, University of Groningen)

  • Marcel P. Timmer

    (Groningen Growth and Development Centre, Faculty of Economics and Business, University of Groningen)

  • Ilya B. Voskoboynikov

    ()

    (Groningen Growth and Development Centre, Faculty of Economics and Business, University of Groningen; Laboratory of Inflation and Economic Growth, National research university `Higher school of economics?, Moscow)

  • Harry X. Wu

    (Institute of Economic Research, Hitotsubashi University, Tokyo; The Conference Board China Centre, Beijing; Professor)

This paper studies structural transformation and its implications for productivity growth in the BRIC countries based on a new database that provides trends in value added and employment at a detailed 35-sector level. We find that for China, India and Russia reallocation of labour across sectors is contributing to aggregate productivity growth, whereas in Brazil it is not. However, this result is overturned when a distinction is made between formal and informal activities. Increasing formalization of the Brazilian economy since 2000 appears to be growth-enhancing, while in India the increase in informality after the reforms is growth-reducing

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Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 04/EC/2011.

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Length: 46 pages
Date of creation: 2011
Date of revision:
Publication status: Published in WP BRP Series: Economics / EC, December 2011, pages 1-46
Handle: RePEc:hig:wpaper:04/ec/2011
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