Seminar: Lidia Smitkova, "Dissecting Structural Change in an Open Economy"

Lidia Smitkova, University of Oxford.
Titel: Dissecting Structural Change in an Open Economy
Abstract:This paper studies the role of trade and international borrowing in driving structural change. I decompose the change in manufacturing shares into contributions by sectoral expenditure shares, trade shares, and aggregate trade imbalances, and map these into structural primitives in a quantitative trade model with endogenous borrowing.
Using data from twenty economies, I show that trade specialization and international borrowing explain 40% of the average change in the manufacturing share, half of the cross-country heterogeneity in the patterns of industrialization, half the dynamics in high-technology subsectors of manufacturing, and much of the China-driven deindustrialization and ‘miracle’ industrialization in South Korea.