Structural change in an open economy

Arbeitspapier

We study the importance of international trade in structural change. Our framework has both productivity and trade cost shocks, and allows for non-unitary income and substitution elasticities. We calibrate our model to investigate South Korea's structural change between 1971 and 2005. We find that the shock processes, propagated through the model's two main transmission mechanisms, non-homothetic preferences and the open economy, explain virtually all of the evolution of agriculture and services labor shares, and the rising part of the hump-shape in manufacturing. Counterfactual exercises show that the role of the open economy is quantitatively important for explaining South Korea's structural change.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013-09

Classification and Topics

• Classification: Wirtschaft ; International Factor Movements and International Business: General ; Macroeconomic Aspects of International Trade and Finance: General ; Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products ; One, Two, and Multisector Growth Models
• Subject: structural transformation ; international trade ; sectoral labor reallocation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Uy, Timothy ; Yi, Kei-Mu ; Zhang, Jing
• Event: Veröffentlichung
• (who): Federal Reserve Bank of Chicago
• (where): Chicago, IL
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/96638
• Last update: 10.03.2025, 11:42 AM CET