Structural change in an open economy

Timothy Uy, Kei-Mu Yi and Jing Zhang

Journal of Monetary Economics, 2013, vol. 60, issue 6, 667-682

Abstract: We study the importance of international trade in structural change. Our framework has both productivity and trade cost shocks, and allows for non-unitary income and substitution elasticities. We calibrate our model to investigate South Korea's structural change between 1971 and 2005. We find that the shock processes, propagated through the model's two main transmission mechanisms, non-homothetic preferences and the open economy, explain virtually all of the evolution of agriculture and services labor shares, and the rising part of the hump-shape in manufacturing. Counterfactual exercises show that the role of the open economy is quantitatively important for explaining South Korea's structural change.

Keywords: Structural transformation; International trade; Sectoral labor reallocation (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (135)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030439321300086X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Structural change in an open economy (2013)
Working Paper: Structural change in an open economy (2011)
Working Paper: Structural Change in an Open Economy (2010)
Working Paper: Structural Change in an Open Economy (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:60:y:2013:i:6:p:667-682

DOI: 10.1016/j.jmoneco.2013.06.002

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().