Impacts of Intermediate Trade on Structural Change

Denis Stijepic and Helmut Wagner

MPRA Paper from University Library of Munich, Germany

Abstract: Traditional structural change theories study the dynamics of inter-sector labour-reallocation in autarky models. We analyse how model-results change if open economy setting is assumed, where we focus on the impacts of intermediate trade in a multi-sector growth model with capital accumulation. We show that, when controlling for specialisation-effects, open economy features a relatively high employment share of capital/manufacturing sector and a relatively low rate of labour-reallocation across consumption industries in comparison to autarky. The process of tertiarisation (transition to a services economy) is relatively slow in the intermediate trade model in comparison to the autarky model.

Keywords: structural change; factor reallocation; labour; multi-sector growth modelling; neoclassical growth theory; trade; intermediates; offshoring (search for similar items in EconPapers)
JEL-codes: F43 O14 O41 (search for similar items in EconPapers)
Date: 2008-02, Revised 2012-08-23
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40841

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