A Revisit to the Forgotten Debate after Half-Century: Balanced Versus Unbalanced Growth

Xiao Jiang () and Chau Nguyen ()
Additional contact information
Xiao Jiang: Denison University
Chau Nguyen: Oxford University

No 1817, Working Papers from New School for Social Research, Department of Economics

Abstract: The debate between balanced and unbalanced growth doctrines has generated much heat since the publication of Rosenstein-Rodan’s seminal work in 1943 but vanished in early 1980s. This paper intends to empirically revisit the forgotten debate by first compiling a harmonized international dataset that contains sectoral value-added data for up to 175 countries over 45 years. This dataset enables us to construct the index of sectoral imbalance for each country, which further allows us to update the key empirical tests for the balanced and unbalance growth hypotheses that appeared in the literature. Moreover, we also conduct cross-country growth regression analysis to systematically examine the effects of sectorial balance (or imbalance) on growth. Overall, we have found empirical support for the balanced growth hypothesis.

Keywords: Growth; sectorial balance; development; cross-country regression (search for similar items in EconPapers)
JEL-codes: B29 C12 O25 O40 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2018-11
New Economics Papers: this item is included in nep-gro and nep-his
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http://www.economicpolicyresearch.org/econ/2018/NSSR_WP_172018.pdf First version, 2018 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:new:wpaper:1817

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