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Activation of a Modern Industry

Author

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  • Ping Wang

    (Department of Economics, Vanderbilt University and NBER)

  • Danyang Xie

    (International Monetary Fund and Hong Kong University of Science and Technology)

Abstract

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 are provided.

Suggested Citation

  • Ping Wang & Danyang Xie, 2001. "Activation of a Modern Industry," Vanderbilt University Department of Economics Working Papers 0135, Vanderbilt University Department of Economics.
  • Handle: RePEc:van:wpaper:0135
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    References listed on IDEAS

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    Cited by:

    1. Yuki, Kazuhiro, 2008. "Sectoral Shift, Wealth Distribution, And Development," Macroeconomic Dynamics, Cambridge University Press, vol. 12(4), pages 527-559, September.
    2. Trindade, Vitor, 2005. "The big push, industrialization and international trade: The role of exports," Journal of Development Economics, Elsevier, vol. 78(1), pages 22-48, October.
    3. Elgin, Ceyhun, 2012. "A Theory Of Economic Development With Endogenous Fertility," Macroeconomic Dynamics, Cambridge University Press, vol. 16(5), pages 686-705, November.
    4. Yang, Dennis Tao & Zhu, Xiaodong, 2013. "Modernization of agriculture and long-term growth," Journal of Monetary Economics, Elsevier, vol. 60(3), pages 367-382.
    5. Chong-Kee Yip & Tsz-Nga Wong, 2014. "A Model of Technology Assimilation," 2014 Meeting Papers 144, Society for Economic Dynamics.
    6. Ming-Jen Chang & Ping Wang & Danyang Xie, 2016. "The Dynamic Process of Economic Takeoff and Industrial Transformation," Frontiers of Economics in China, IAR, Shanghai University of Finance and Economics, vol. 11(1), pages 60-87, March.
    7. Yuki, Kazuhiro, 2016. "Education, Inequality, And Development In A Dual Economy," Macroeconomic Dynamics, Cambridge University Press, vol. 20(1), pages 27-69, January.
    8. Daido, Kohei & Tabata, Ken, 2013. "Public infrastructure, production organization, and economic development," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 330-346.
    9. Been-Lon Chen & Shian-Yu Liao, 2015. "The Role of Agricultural Productivity on Structural Change," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 971-987, November.
    10. Armando J. Garcia Pires & José Pedro Pontes, 2021. "(De)Industrialization, Technology and Transportation," Open Economies Review, Springer, vol. 32(3), pages 527-538, July.
    11. Carmignani, Fabrizio & Mandeville, Thomas, 2014. "Never been industrialized: A tale of African structural change," Structural Change and Economic Dynamics, Elsevier, vol. 31(C), pages 124-137.
    12. Murata, Yasusada, 2008. "Engel's law, Petty's law, and agglomeration," Journal of Development Economics, Elsevier, vol. 87(1), pages 161-177, August.
    13. Chu, Angus C. & Furukawa, Yuichi & Wang, Xilin, 2022. "Rent-seeking government and endogenous takeoff in a Schumpeterian economy," Journal of Macroeconomics, Elsevier, vol. 72(C).
    14. Liao, Junmin, 2020. "The rise of the service sector in China," China Economic Review, Elsevier, vol. 59(C).
    15. Justin Yifu Lin & Yong Wang, 2020. "Structural Change, Industrial Upgrading, and Middle-Income Trap," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 359-394, June.
    16. Yunfang Hu & Kazuo Nishimura & Ping Wang & Takuma Kunieda, 2019. "Flying or Trapped?," 2019 Meeting Papers 362, Society for Economic Dynamics.
    17. Schiopu, Ioana, 2015. "Technology adoption, human capital formation and income differences," Journal of Macroeconomics, Elsevier, vol. 45(C), pages 318-335.

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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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