Cover IMF Working Papers
Activation of a Modern Industry
Author: Danyang Xie and Mr. Ping Wang
Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 015
Language:
English
Publication Date:
01 Jan 2002
DOI:
https://doi.org/10.5089/9781451843279.001
ISBN:
9781451843279
ISSN:
1018-5941
Pages:
17
Keywords:
WP; developing country; luxury good; economic development; full employment; utility function; industrial transformation; spillovers; subsistence; capital allocation constraint; labor reallocation; capital funding; reallocation constraint; cost differential; capital-labor complementarity; capital input; labor input; Unemployment; Skilled labor; Wages; Employment; East Asia
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper constructs an integrated framework to disentangle the underlying economic mechanism of industrial transformation. We consider three essential elements for the analysis: skill requirements, industry-wide spillovers, and degrees of consumption subsistence. We find that human and nonhuman resources, production factor matching, and industrial coordination are all important for activating a modern industry. In the process of industrial transformation, job destruction may exceed job creation, and income distribution may get worse immediately following the activation of a modern industry. An array of policy prescriptions for advancing a poor country is provided.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund