Key sectors in economic development: a perspective from input-output linkages and cross-sector misallocation
Leal-Ordoñez Julio C.
Authors registered in the RePEc Author Service: Julio César Leal Ordóñez
No 2015-23, Working Papers from Banco de México
For a typical developing country, this paper shows that once inter-sectoral linkages are taken into account, closing the productivity gap in a number of services gives bigger gains in aggregate productivity than closing it in agriculture or in manufacturing. This is performed in the context of an input-output economy and general equilibrium. Also, the importance of sector-specific distortions that produce cross-sector misallocation is addressed. I compute the effect of the removal of these distortions on aggregate productivity using the input-output model and find that this could increase productivity up to 68%, depending on whether the rents from distortions stay in the economy or not.
Keywords: sectors; economic development; input-output linkages; cross-sector misallocation. (search for similar items in EconPapers)
JEL-codes: O1 O41 C67 (search for similar items in EconPapers)
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