Growth, Trade, and Deindustrialization
April 1, 1998
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Summary
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.
Subject: Economic sectors, Employment, Labor, Labor productivity, Manufacturing, National accounts, Personal income, Production, Productivity
Keywords: Deindustrialization, demand-creating effect, dependent variable, East Asia, Employment, income coefficient, income elasticity, Labor productivity, labor-saving impact, Manufacturing, North-South trade, output equation, per capita income, Personal income, Productivity, productivity change, productivity growth, productivity trend, trade balance, WP
Pages:
28
Volume:
1998
DOI:
Issue:
060
Series:
Working Paper No. 1998/060
Stock No:
WPIEA0601998
ISBN:
9781451848021
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 46, No. 1, March 1999.
