Huang, Zongye (2011): The Decline of the U.S. Manufacturing: An Explanation from Structural Change.
Download (410kB) | Preview
In this paper, I develop a three-sector model that is able to fully explain the postwar structural transformation process experienced by the United States from 1950 to 2005. The model have multiple consumption goods which are produced using dierent factor intensities. The closed economy version of the model estimates the trends from 1950 to 1980 very well, but is not able to traces the labor movements since 1980s. An intuitive idea that would improves the performance of the model is to connect the soaring trade decits with the decline of manufacture sector since then. The modification to the model is simple: keeping the trade balance/GDP ratio as in the data, I evaluate the model to estimate the labor allocations. The results of this trade balance augmented model replicate the structural change over the whole sample period at great accuracy. This result might support the argument that trade imbalances have a substantial eect on the labor markets.
|Item Type:||MPRA Paper|
|Original Title:||The Decline of the U.S. Manufacturing: An Explanation from Structural Change|
|English Title:||The Decline of the U.S. Manufacturing: An Explanation from Structural Change|
|Keywords:||Structural Change, Trade Balance, Labor Allocation|
|Subjects:||F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S. ; Canada
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology
|Depositing User:||Zongye Huang|
|Date Deposited:||04 Apr 2011 02:15|
|Last Modified:||24 Jul 2016 15:40|
Alvarez-Cuadrado, F., and M. Poschke (2011): Structural change out of agriculture: labor push versus labor pull, American Economic Journal: Macroeconomics.
Bah, E.-h. (2009): A Three-Sector Model of Structural Transformation and Economic Development, MPRA Working Paper, (10654).
Branson, W. H. (1971): The Balance of Payments in 1970, Brookings Papers on Economic Activity, 1971(1), 219225.
Brauer, D. (2004): What Accounts for the Decline in Manufacturing Employment?, Economic and Budget Issue Brief, the Congressional Budget Office.
Buera, F. J., and J. P. Kaboski (2008): Scale and the origins of structural change, papers.ssrn.com, (i).
Duarte, M., and D. Restuccia (2010): The role of the structural transformation in aggregate productivity, Quarterly Journal of Economics, 129(February).
Echevarria, C. (1995): Agricultural development vs. industrialization: Effects of trade, Canadian Journal of Economics, 28(3), 631647.
Echevarria, C. (1997): Changes in sectoral composition associated with economic growth, International Economic Review, 38(2), 431452.
Englander, A., and A. Mittelstadt (1988): Total factor productivity: macroeconomic and structural aspects of the slowdown, OECD Economic Studies, 10,756.
Gollin, D., S. Parente, and R. Rogerson (2007): The food problem and the evolution of international income levels, Journal of Monetary Economics, 54(4),12301255.
Kongsamut, P., S. Rebelo, and D. Xie (2001): Beyond balanced growth, Review of Economic Studies, 68(4), 869882.
Krugman, P. (1994): The Myth of Asia’s Miracle, Foreign Aairs, 73(6), 6278.
Krugman, P., and R. Lawrence (1994): Trade, jobs, and wages, Scientic American,, pp. 4449.
Kuznets, S. (1966): Modern Economic Growth. New Haven, CT: Yale Univ. Press.
Laitner, J. (2000): Structural Change and Economic Growth, Review of Economic Studies, 67(3), 545561.
Lawrence, R. Z., M. J. Slaughter, R. E. Hall, S. J. Davis, and R. H. Topel (1993): International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?, Brookings Papers on Economic Activity. Microeconomics, 1993(2), 161.
Maddison, A. (1991): Dynamic forces in capitalist development: A long-run comparative view. Oxford University Press, USA.
Mankiw, N. G., D. Romer, and D. N. Weil (1992): A Contribution to the Empirics of Economic Growth.
McQuinn, K., and K. Whelan (2007): Conditional convergence and the dynamics of the capital-output ratio, Journal of Economic Growth, 12(2), 159184.
Ngai, L. R., and C. a. Pissarides (2007): Structural Change in a Multisector Model of Growth, American Economic Review, 97(1), 429443.
Rogerson, R. (2008): Structural Transformation and the Deterioration of European Labor Market Outcomes, Journal of Political Economy, 116(2), 235259.
Sachs, J., and H. Shatz (1994): Trade and jobs in US manufacturing, Brookings Papers on Economic Activity, 1994(1), 184.
Valentinyi, a., and B. Herrendorf (2008): Measuring factor income shares at the sectoral level, Review of Economic Dynamics, 11(4), 820835.
Yi, K.-m., and J. Zhang (2010): Structural Change in an Open Economy, Working Papers.
Available Versions of this Item
- The Decline of the U.S. Manufacturing: An Explanation from Structural Change. (deposited 04 Apr 2011 02:15) [Currently Displayed]