Wednesday , May 22 2019
Home / Naked Keynesianism / Structural Change in China and India: External Sustainability and the Middle-Income Trap

Structural Change in China and India: External Sustainability and the Middle-Income Trap

Summary:
Shouldn't listen to the IMF anyway New working paper co-authored with Suranjana Nabar-Bhaduri, and published by the Political Economy Research Institute (PERI) from UMass-Amherst. From the abstract:This paper focuses on the different development strategies of China and India, particularly regarding the role of manufacturing and services for long-run productivity growth, external competitiveness and financial fragility. The findings appear to support the argument that productivity improvements in manufacturing drive productivity improvements in other sectors. They also substantiate previous findings that the Indian services-led growth trajectory has had limited success in transferring surplus labor from agriculture to other sectors. Furthermore, the trajectories have affected the

Topics:
Matias Vernengo considers the following as important: , ,

This could be interesting, too:

Edward Harrison writes China’s ‘weaponising’ Treasuries, automatic stabilizers, and investing versus losing money at WeWork

Edward Harrison writes The hardening trade war and the pause in IPO easy money

Jeff Mosenkis (IPA) writes IPA’s weekly links

Mike Norman writes Sharmini Peries — Russia-China Alignment Challenges U.S. Hegemony

Structural Change in China and India: External Sustainability and the Middle-Income Trap
Shouldn't listen to the IMF anyway

New working paper co-authored with Suranjana Nabar-Bhaduri, and published by the Political Economy Research Institute (PERI) from UMass-Amherst. From the abstract:

This paper focuses on the different development strategies of China and India, particularly regarding the role of manufacturing and services for long-run productivity growth, external competitiveness and financial fragility. The findings appear to support the argument that productivity improvements in manufacturing drive productivity improvements in other sectors. They also substantiate previous findings that the Indian services-led growth trajectory has had limited success in transferring surplus labor from agriculture to other sectors. Furthermore, the trajectories have affected the export performances of the two countries with the Indian trade balance and current account revealing persistent deficits, compared to China's surpluses. The paper also argues that the way in which India has sought to sustain these deficits entails elements of financial fragility, and that the Chinese struggles with the internationalization of the renminbi also imply a possibility of financial instability.


Download paper here.
Matias Vernengo
Econ Prof at @BucknellU Co-editor of ROKE & Co-Editor in Chief of the New Palgrave Dictionary of Economics

Leave a Reply

Your email address will not be published. Required fields are marked *