A description of mature and catching-up economies: A bottom-up approach from trade specialization data

Oriol Gisbert

Structural Change and Economic Dynamics, 2023, vol. 67, issue C, 193-210

Abstract: Using a novel methodology to relate traded products to aggregate country indicators, this paper identifies imported and exported goods that correlate with growth and income per capita, and based upon that, determines the productive and demand structure of mature and catching-up economies. The methodology in question first uses Principal Component Analysis on the products that countries specialize in importing and exporting, to reduce the number of variables that will, later, be linearly related to income and growth using Canonical Correlation Analysis. It is shown that fast growing or catching-up economies are characterized by the export of mass-produced manufactured goods, and the import of capital and intermediates – but not consumer goods. Frugality in consumption demand and congruence between exports and imports explain the high growth rates of catching-up or transitioning economies. In contrast, high income and slow growth mature economies are characterized by the export of goods whose production requires advanced technological capabilities. Their demand structure is characterized by the prominence of consumption rather than means of production.

Keywords: Structural change; Economic development; Economic convergence; Demand structure; Productive structure (search for similar items in EconPapers)
JEL-codes: L16 O14 O47 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:67:y:2023:i:c:p:193-210

DOI: 10.1016/j.strueco.2023.08.001

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