Growth, Trade, and Deindustrialization


Ramana Ramaswamy ; Bob Rowthorn

Publication Date:

April 1, 1998

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate


This paper shows that deindustrialization is explained primarily by trends internal to the advanced economies. These include the combined effects on manufacturing employment of a relatively faster growth of productivity in manufacturing, the associated relative price changes, and shifts in the structure of demand between manufactures and services. North-South trade explains less than one fifth of deindustrialization in the advanced economies. Moreover, the contribution of North-South trade to deindustrialization has been mainly through its effects in stimulating labor productivity in Northern manufacturing. It has had little enduring effect on total manufacturing output in the advanced economies.


Working Paper No. 1998/060



Also published in Staff Papers, Vol. 46, No. 1, March 1999.


Publication Date:

April 1, 1998



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