China＇s Changing Trade Elasticities

China ＇s sectoral trade composition, product quality mix, and the import content of processing exports have all changed substantially during the past decade. This has rendered trade elasticities estimated using aggregate data highly unstable, with more recent data pointing to significantly higher demand and price elasticities. Sectoral differences in these parameters are also very wide. All this suggests greater caution should be exercised when using historical data to simulate the response of China＇s economy to external shocks and exchange rate changes. Analyses based on models with estimated coefficients largely representative of China in the 1980s and 1990s are likely to turn out to be wrong, perhaps even dramatically.     

Labor productivity in the United States and the United Kingdom during the nineteenth century

A number of writers have recently questioned whether labor productivity or per capita incomes were ever higher in the United Kingdom than in the United States. This paper focuses on aggregate and sectoral labor productivity in the two countries during the nineteenth century. We build on earlier work by Broadberry to push comparative productivity estimates back to 1840 based on a time series projection from a 1910 benchmark and checked against a benchmark estimate for 1850. The results indicate that labor productivity in agriculture was broadly equal in the two countries, and that the United States had a substantial labor productivity lead in industry as early as 1840, while the United Kingdom was ahead in services. Hence aggregate labor productivity and per capita incomes were higher in the United Kingdom in the mid-nineteenth century, particularly since the United States had a larger share of the labor force in low value-added agriculture and a smaller share of the population in the labor force.     

Output and Productivity Performance of Hong Kong and Singapore's Transport and Communications Sector, 1990 to 2005*

This paper uses the industry of origin approach to analyze value added and labor productivity outcomes arising from progressive liberalization of government and from statutory board control of transport and communications in Singapore. The paper compares these outcomes with those from the market‐orientated, more privatized transport and communications sector in Hong Kong, for the benchmark year 2004 and a review period from 1990 to 2005. The study is among the first to carefully compare labor productivity in specific sectors between the two countries. Although Singapore generally recorded higher levels of labor productivity, there was some catch‐up by Hong Kong in the later part of the review period. There was also substantial variation in labor productivity performance within sectoral branches in the two sectors. The study suggests there is some evidence that the different political–economic structures and policy approaches to deregulation and liberalization played a role in determining productivity performance in the transport and communications sectors in Singapore and Hong Kong. The analysis infers a potential, increasing focus on privatization as the driving force for further liberalization of the transport and communications sector in Singapore.     

What explains the recent fluctuations in Japan’s output? A structural factor analysis of Japan’s industrial production

By applying the structural factor analysis developed by Foerster et al. (2011), we decompose the fluctuations of Japan’s industrial production (IP) into sectoral shocks and aggregate shocks, taking input–output relationships between sectors into account. Our results show that, except for the global financial crisis period, sectoral shocks explain, on an average, nearly half of the quarterly variations in Japan’s IP. Although the relative importance of sectoral shocks declined during the global financial crisis period, it increased again in the recent post-crisis period and, at this time, it contributes to the increased volatility of Japan’s IP. Specifically, our analysis suggests that the intersectoral spillovers brought about by disruptions of supply chain networks in the wake of the Great East Japan Earthquake, the declines in domestic production (or production capacity) in some sectors, as a result of a deterioration in global competitiveness, and a shift to overseas production have contributed to the recent increase in fluctuations of Japan’s IP.     

最终需求与增加值的传导机制——基于D-N转化矩阵

伴随着经济的快速增长,我国最终需求结构和增加值结构失衡的矛盾日益突出,对国民经济协调可持续发展构成一定制约。本文利用投入产出技术推导阐释最终需求与增加值传导机制的D-N转化矩阵,并基于我国不变价投入产出表进行实证研究。研究结论表明,最终需求结构失衡和技术进步共同导致了我国增加值结构的失衡。此外,D-N转化矩阵还有助于拓展产业关联的研究,对于政府合理配置劳动、资本等初级生产要素提供了依据,因此具有十分重要的理论和现实意义。     

The impact of intersectoral labour reallocation on economic growth

This paper explains economic growth differences in an aggregateproduction function framework, where labor reallocation fromagriculture to modern sectors influences labor efficiency growth.The econometric analysis uses a panel of 65 developing and industrialcountries over 1960-90. The results highlight: (i) differencesin the impact of labor reallocation on growth, resulting fromvariations in the intersectoral wedge in labor productivities;(ii) the significance of labor reallocation effects, even aftercontrolling for capital accumulation, initial conditions andcountry effects, and adjusting for endogeneity; (iii) theirrole in explaining slow productivity growth in Africa; and (iv)the role of initial conditions and capital accumulation in explainingdifferences in labor reallocation rates.     

Price formation and the inflationary process in a small open economy (The Netherlands)

Summary Price formation in the manufacturing, services, building and agricultural sectors is analysed by estimating price equations in which unit labour costs, import prices, capacity utilization and the structure of the sellers market (sheltered or competitive) play a part. These equations have been included in a model in which sectoral wages and social security premiums are endogenous as well. This model, which is still partial since it considerse.g. labour productivity and capacity utilization as exogenous, allows a study of the intersectoral multiplier effects which were found to be quite considerable.A large number of simulation results are presented showing the effects of both domestic and foreign exogenous shocks.Finally, an analysis of the relative importance of the factors determining the rise in consumer prices during 1954–1972 has been carried out.     

Explaining the size differences of exporter premia: theory and evidence

Two decades of research have established pronounced exporter productivity premia (EPP) and exporter size premia (ESP). Yet, we do not know why such exporter premia differ so widely in magnitude across countries or sectors? We take this question to the theory and to the data. We derive the sectoral EPP and ESP in a standard heterogeneous firms trade model and apply the insights from the model to guide our empirical investigation of detailed Danish firm-level data. We show that a significant share of the observed variation in EPP and ESP across sectors can be accounted for by sector differences in the underlying variation in productivity dispersion, variable trade costs, the ratio of fixed export costs to fixed costs of production, and the elasticity of demand.     

Engel versus Baumol: Accounting for structural change using two centuries of U.S. data

In the last two centuries, the reallocation of labor out of agriculture has been a dominant feature of structural change and economic growth in the United States. This paper uses an accounting framework founded in economic theory to decompose this reallocation into three components: a demand-side effect due to the low income elasticity of demand for agricultural goods (Engel effect), and two supply-side effects, one due to differential sectoral productivity growth rates (Baumol effect), and the other to differential capital deepening. The results show that the Engel effect accounts for almost all labor reallocation until the 1950s, after which the Baumol effect becomes a key determinant. Our framework provides a unified account of long-run structural change, and demonstrates that historical interpretations and theoretical models that emphasize only one dimension of this process cannot properly account for the dramatic history of labor reallocation in the United States.     

The link between macroeconomic adjustment and sectoral output in post-reform China

We construct a two-part model of the Chinese economy. The first part consists of a money supply equation, a real money demand equation, and a savings equation. The second part comprises a set of sectoral equations. The model estimated is then used to generate a dynamic simulation of the paths of real national income, the aggregate price level, sectoral output, and sectoral prices. The model tracks quite well within sample, thus indicating that it may be used to analyze the future effects of policy changes. We therefore carry out counterfactual policy simulations based on monetary changes.     

The changing role of agriculture with economic structural change – The case of China

We analyze the implication of structural change to the evolving role of agriculture using China as an example. By combining a growth decomposition exercise with Input-Output (IO) and CGE model analyses using China's seven input-output tables (IOTs) in 1987–2017, the evolving role of the agriculture is quantitatively measured. The growth decomposition analysis shows that between 1978 and 2017, China doubled the size of its total labor force, while the absolute number of agricultural workers falls in this period. Rising labor productivity in agriculture has led to rapid agricultural growth without increasing agricultural employment, allowing agriculture to indirectly contribute to the economywide productivity growth through structural change.The measurement of economic integration using an IO approach helps to explain why China's rapid structural change has been accompanied by similar rapid productivity growth within each sector. The general equilibrium effect of structural change on the evolving role of agriculture is further assessed using two CGE models representing the initial (1987) and end (2017) years of a period of 30 years. Similar agricultural productivity shock induces a smaller economywide gain in 2017 than in 1987 in the CGE models, while the gap in the general equilibrium gain between these two years is much smaller than the difference in agriculture's size of the economy in the two years because of stronger linkages between agriculture and the rest of the economy in 2017. About 0.5 unit additional nonagricultural value-added is associated with a unit agricultural value-added increase in 1987, while additional gains in nonagricultural value-added rise to 2.7 unit in 2017.Our analysis of economic integration and implication of structural change to the evolving role of agriculture emphasizes the supply side role for sustainable growth in which agriculture continues to play an important but different role from the past when the demand side effects were stronger. Policies to strengthen supply side linkages have been emphasized in the recent years in China. Exploring further integration between agriculture and the rest of the economy should be part of the new growth strategy.     

Wage and employment effects in the EU of international trade with the emerging economies

The paper investigates whether significant HOS effects are present in the EU from trade liberalization with the emerging economies. Regarding wage inequality, there is only evidence of a trade-induced technological change, but biased towards thelower-skilled-labor-intensive sectors. Relative wages in the EU member states are not affected differently. Trade liberalization under ‘European assumptions’, however, could affect primarily relative factor demand. A flexible cost function approach shows that import competition from the emerging economies influenced relative labor demand in favor of the higher skilled, implying an intrasectoral rather than an intersectoral specialization in skill-intensive activities. JEL no. F11, F14     

Structural Change and Industrial Policy in Taiwan, 1966–91: An Extended Input-Output Analysis

This paper studies the structural changes in Taiwan from an input-output perspective for 1966–91, a period marked by rapid economic growth. The analysis has been performed by examining the coefficient changes of both demand- and supply-side IO models through the use of the rowscaler-cum-columnscaler method. Empirical results based on the deflated data with shifting-base scenario show that significant changes exist in interindustry transaction, final demand and value-added coefficients for the majority of industries. Extensive variations in industrial pattern are detected across various developmental stages.     

资本深化对中国制造业劳动生产率的影响:市场选择与政府行为

文章基于市场选择与政府行为的视角,将资本深化分解为工资上涨引致的资本深化和政府投资引致的资本深化,利用2000-2014年中国制造业28个分行业的面板数据,实证检验了资本深化对中国制造业劳动生产率提升的影响。研究结果表明,工资上涨引致的资本深化能显著的促进中国制造业劳动生产率的提升,而政府投资引致的资本深化却对中国制造业劳动生产率的提升产生了不利的影响。进一步的研究发现,政府投资引致的资本深化与中国制造业劳动生产率之间呈现出显著的"倒U型"关系,其临界值为政府投资引致的资本深化达到0.057左右,目前越过该临界值的制造业行业有20个,且主要集中在重化工业制造业。而未越过该临界值的制造业行业有8个,主要分布于轻工业制造业。这一研究结果为中国"去库存、去产能"的供给侧结构性改革提供必要的经验支持。     

The impact of compensation and productivity on the final consumption of households and GDP growth rates in the long term

A single-commodity model reflecting the material aspect of GDP reproduction, the balance between revenue and expenditure flows in key economic sectors, and labor dynamics is considered in terms of simulation models to analyze Russia’s long-term economic development options. Different levels of compensation and productivity were assumed as the model’s basic data in the scenario, and the growth rates of the GDP and the final consumption of households were examined on a 15-year horizon (2006 to 2020). The results show that under regulated inflation processes, compensation growth stimulates households’ final consumption with no increase in productivity because of the inflow of foreign labor resources. Growth is observed not only in imports but also in domestic production. The problem is to determine the boundaries of possible growth in labor migration and to find ways of restricting it by improving labor productivity.     

A disaggregated analysis of the export performance of some industrial and emerging countries

The paper describes the evolution of export shares and quantifies the contribution of geographical and sectoral specialization as well as that of “competitiveness” of some industrial and emerging market economies between 1985 and 2003. While the strong growth of emerging countries as world competitors has lowered the market shares of all industrial countries, the results of a constant-market-share analysis indicate that the latter have benefited from positive specialization effects. Specifically, industrial countries gained from being specialized in fast-growing sectors (high-tech) or destinations (Asia). The magnitude of these effects, however, has been quite diversified across the main countries. Among the emerging economies, the striking export growth of China was determined by a strong rise in competitiveness that allowed the country to gain market shares across all sectors and destinations.     

DETERMINANTS OF SECTORAL COMPOSITION IN A SMALL OPEN ECONOMY: THEORETICAL AND QUANTITATIVE INVESTIGATIONS OF THE PHILIPPINES

The Philippine economy since the 1980s has undergone shifts of production, employment, and consumption in the direction of the greater share of nontradable sectors, despite relatively stagnant economic growth. This paper examines sources of the sectoral shifts theoretically and quantitatively based on a dynamic model of a small open economy. The theoretical analysis identifies possible factors affecting the evolution of the sectoral composition: changes in sectoral total factor productivity (TFP), the tariff rate, and the terms of trade. Then, the relative importance of these factors is examined quantitatively by conducting simulations of the model calibrated to the Philippine economy.     

What＇s So Special about China＇s Producer Services？ An Input-output Analysis

In the present study, five stylized facts about China ＂s producer services are established through international, intersectoral and intertemporal comparisons based on input --output tables. First, the overall service input ratio is the lowest in all the sample economies. Second, most producer services are supplied by the traditional labor-intensive sectors. Third, manufacturing is the biggest user of producer services, and service industry is the second, while the opposite is true for most of the other sample economies. Fourth, unlike other economies, China ＂s ＂R＆D＂ is characterized more by consumer services than producer services. Fifth, China has fairly lower service input ratios in almost all the industries. The backward and forward linkages coefficients are both smaller for ＂real estate activities＂ and ＂finance and insurance. ＂＂ Policy reform should focus not only on specific producer services but also on reducing obstacles that are inhibiting the balanced development of diverse producer services that will help China to optimize its economic structure.     

Zambia at 50: The persisting challenges of economic structural transformation

This article examines the structural transformation trajectory in Zambia since independence. Drawing from sectoral analysis of the structure of output and the composition of labour over the last five decades, the article illustrates that although there have been shifts in the composition of output and labour in the economy, especially since 2000, these shifts have not contributed to positive structural transformation. Instead the economy has been experiencing widening productivity gaps between sectors, signalling perverse economic structural transformation. Although there have been some slight improvements in the overall productivity since 2000, productivity in the agriculture and informal sectors, where almost 85% of the labour works, has remained stagnantly low. This is compounded by the economy experiencing a net movement of labour from high to low-productivity employment, mainly the informal urban sector.