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Deindustrialization; Causes and Implications

Author

Listed:
  • Ramana Ramaswamy
  • Bob Rowthorn

Abstract

All advanced economies have experienced a secular decline in the share of manufacturing employment—a phenomenon referred to as deindustrialization. This paper argues that, contrary to popular perceptions, deindustrialization is not a negative phenomenon, but is the natural consequence of the industrial dynamism in an already developed economy, and that North-South trade has had very little to do with deindustrialization. The paper also discusses the implications of deindustrialization for the growth prospects and the nature of labor market arrangements in the advanced economies.

Suggested Citation

  • Ramana Ramaswamy & Bob Rowthorn, 1997. "Deindustrialization; Causes and Implications," IMF Working Papers 97/42, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:97/42
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    Cited by:

    1. Oulton, Nicholas, 2001. "Must the Growth Rate Decline? Baumol's Unbalanced Growth Revisited," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 605-627, October.
    2. Kaliappa Kalirajan, 2004. "Is the Manufacturing Sector in India an Engine of Growth?," Working Papers 151, Institute for Social and Economic Change, Bangalore.
    3. Lavopa, Alejandro & Szirmai, Adam, 2012. "Industrialization, employment and poverty," MERIT Working Papers 081, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Amat Adarov & Mario Holzner & Luka Sikic, 2016. "Backwardness, Industrialisation and Economic Development in Europe," wiiw Balkan Observatory Working Papers 123, The Vienna Institute for International Economic Studies, wiiw.
    5. Mesquita Moreira, Mauricio, 2007. "Fear of China: Is There a Future for Manufacturing in Latin America?," World Development, Elsevier, vol. 35(3), pages 355-376, March.
    6. Sasaki, Hiroaki, 2007. "The rise of service employment and its impact on aggregate productivity growth," Structural Change and Economic Dynamics, Elsevier, vol. 18(4), pages 438-459, December.
    7. Gui-Diby, Steve Loris & Renard, Mary-Françoise, 2015. "Foreign Direct Investment Inflows and the Industrialization of African Countries," World Development, Elsevier, vol. 74(C), pages 43-57.
    8. Weller, Jürgen, 2001. "Economic reforms, growth and employment: labour markets in Latin America and the Caribbean," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 66 edited by Eclac, May.
    9. Sandro Montresor & Giuseppe Vittucci Marzetti, 2011. "The deindustrialisation/tertiarisation hypothesis reconsidered: a subsystem application to the OECD7," Cambridge Journal of Economics, Oxford University Press, vol. 35(2), pages 401-421.
    10. Jan J. Rutkowski & Stefano Scarpetta, 2005. "Enhancing Job Opportunities : Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 7408.
    11. repec:eee:streco:v:42:y:2017:i:c:p:26-37 is not listed on IDEAS
    12. Felipe, Jesus & Mehta, Aashish & Rhee, Changyong, 2014. "Manufacturing Matters...but It’s the Jobs That Count," ADB Economics Working Paper Series 420, Asian Development Bank.
    13. Blum, Bernardo S., 2008. "Trade, technology, and the rise of the service sector: The effects on US wage inequality," Journal of International Economics, Elsevier, vol. 74(2), pages 441-458, March.
    14. Klodt, Henning, 2004. "Strukturwandel und Arbeitsmarktprobleme in Deutschland," Open Access Publications from Kiel Institute for the World Economy 3372, Kiel Institute for the World Economy (IfW).
    15. Jochen Hartwig, 2008. "Has Health Capital Formation Cured 'Baumol's Disease'? - Panel Granger Causality Evidence for OECD Countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich.
    16. Dodzin, Sergei & Vamvakidis, Athanasios, 2004. "Trade and industrialization in developing economies," Journal of Development Economics, Elsevier, vol. 75(1), pages 319-328, October.
    17. Grömling, Michael, 2005. "Sinn und Unsinn von Quoten auf Basis von preisbereinigten Werten," Thuenen-Series of Applied Economic Theory 50, University of Rostock, Institute of Economics.
    18. Berthold, Norbert & Stettes, Oliver, 2000. "Globalisierung und Strukturwandel - droht das Ende des Sozialstaates," Discussion Paper Series 35, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    19. Fiona Tregenna, 2008. "Quantifying The Outsourcing Of Jobs From Manufacturing To Services," South African Journal of Economics, Economic Society of South Africa, vol. 76(s2), pages 222-238, August.
    20. Cesaire, Chiatchoua & Santabárbara-Sabino, Alejandro Mario, 2015. "Inversión extranjera directa y empleo en el Estado de México: ¿Qué distribución sectorial?," eseconomía, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(42), pages 33-50, primer se.
    21. Mihkel Laan, 2003. "Industrial restructuring in transitional Baltic Sea Region countries (Baltic States, Kaliningrad oblast)," ERSA conference papers ersa03p505, European Regional Science Association.
    22. Tonus, Özgür, 2007. "Gümrük Birliği sonrasında Türkiye'de dışa açıklık ve sanayileşme
      [Openness and industrialization in Turkey after the Customs Union]
      ," MPRA Paper 7121, University Library of Munich, Germany.
    23. Maciej Grodzicki, 2014. "Structural Similarities Of The Economies Of The European Union," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 9(1), pages 91-117, March.
    24. Kurose, Kazuhiro, 2009. "The relation between the speed of demand saturation and the dynamism of the labour market," Structural Change and Economic Dynamics, Elsevier, vol. 20(2), pages 151-159, June.

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