Structural Change in an Open Economy

Kei-Mu Yi and Jing Zhang

No 595, Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: We develop a tractable, three-sector model to study structural change in an open economy. The model features an endogenous pattern of trade dictated by comparative advantage. We derive an intuitive expression linking sectoral employment shares to sectoral expenditure shares and to sectoral net export shares of total GDP. Changes in productivity and in trade barriers affect expenditure and net export shares, and thus, employment shares, across sectors. We show how these driving forces can generate the "hump" pattern that characterizes the manufacturing employment share as a country develops, even when manufacturing is the sector with the highest productivity growth.

Keywords: structural transformation; international trade; sectoral labor reallocation (search for similar items in EconPapers)
JEL-codes: F20 F40 O13 O41 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-04
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.fordschool.umich.edu/rsie/workingpapers/Papers576-600/r595.pdf

Related works:
Journal Article: Structural change in an open economy (2013)
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 (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:mie:wpaper:595

Access Statistics for this paper

More papers in Working Papers from Research Seminar in International Economics, University of Michigan Contact information at EDIRC.
Bibliographic data for series maintained by FSPP Webmaster ().