Structural transformation and productivity in Latin America

Pedro Ferreira and da Silva Leonardo Fonseca
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da Silva Leonardo Fonseca: FGV/EPGE – Escola Brasileira de Economia e Finanças, Praia de Botafogo 190, 1125, Rio de Janeiro, RJ, 22253-900, Brazil

The B.E. Journal of Macroeconomics, 2015, vol. 15, issue 2, 603-630

Abstract: This article examines the effects of sectorial shifts and structural transformation on the recent productivity path of Latin America. We use a four-sector (agriculture, industry, modern services and traditional services) general equilibrium model calibrated to the main economies in the region. The model very closely replicates labor reallocations across sectors and the growth of aggregate labor productivity from 1950 to 2005. Structural transformation explains a sizeable portion of the region’s convergence in the first decades. In most cases, the poor performance of the traditional services sector is the main cause of the slowdown in productivity growth observed in the region after the mid-1970s and is a key factor in explaining the divergence during this period.

Keywords: labor productivity; service sector; structural transformation (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (9)

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Working Paper: Structural transformation and productivity in Latin America (2014)
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DOI: 10.1515/bejm-2014-0020

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