## Growth, Trade, and Deindustrialization

_IMF Working Papers, April 1, 1998_

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## Bibliographic details
- Authors: Ramana Ramaswamy, Bob Rowthorn
- Published: April 1, 1998
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451848021.001

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### Main findings
- Deindustrialization in the advanced economies is explained primarily by trends internal to those economies.
- Key internal factors include:
  - Relatively faster growth of productivity in manufacturing.
  - Associated relative price changes.
  - Shifts in the structure of demand between manufactures and services.
- North-South trade explains less than one fifth of deindustrialization in the advanced economies.
- The contribution of North-South trade to deindustrialization has been mainly through its effects in stimulating labor productivity in Northern manufacturing.
- North-South trade has had little enduring effect on total manufacturing output in the advanced economies.

### Mechanisms and analysis
- Faster manufacturing productivity growth reduces manufacturing employment through labor-saving effects.
- Relative price changes linked to productivity differentials alter demand allocation between manufactures and services.
- Demand-structure shifts (between manufactures and services) amplify the employment and output effects of productivity changes.
- North-South trade operates largely by inducing productivity changes in Northern manufacturing rather than by reducing Northern manufacturing output persistently.

### Subject focus and keywords
- Subject areas: 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.

### Document identifiers and publication notes
- Pages: 28
- Series: Working Paper No. 1998/060
- Issue: 060
- Volume: 1998
- DOI: https://doi.org/10.5089/9781451848021.001
- ISBN: 9781451848021
- ISSN: 1018-5941

*Ramana Ramaswamy, and Bob Rowthorn. "Growth, Trade, and Deindustrialization", IMF Working Papers 1998, 060 (1998). DOI: https://doi.org/10.5089/9781451848021.001.*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/growth-trade-and-deindustrialization-2584_