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Activation of a Modern Industry

  • Danyang Xie
  • Ping Wang

This paper constructs an integrated framework to disentangle the underlying economic mechanism of industrial transformation. We consider three essential elements for the analysis: skill requirements, industry-wide spillovers, and degrees of consumption subsistence. We find that human and nonhuman resources, production factor matching, and industrial coordination are all important for activating a modern industry. In the process of industrial transformation, job destruction may exceed job creation, and income distribution may get worse immediately following the activation of a modern industry. An array of policy prescriptions for advancing a poor country is provided.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/15.

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Length: 17
Date of creation: 01 Jan 2002
Date of revision:
Handle: RePEc:imf:imfwpa:02/15
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