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De-industrialization and Emerging Market Economies

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  • Joshua Aizenman

    (Economics Department, Social Science I, University of California)

Abstract

This paper identifies a non-linear pattern of industrialization. A panel regression suggests that the manufacturing/GDP share reaches its peak when the developing country¡¯s GDP/capita reaches about 60% of the US GDP/capita, and that financial depth is associated with a higher manufacturing share. We provide an interpretation for the above findings in a global economy characterized by a traded manufacturing industry, where the number of varieties is endogenously determined, and non traded services. While de-industrialization would have occurred even in the absence of the emerging markets, their presence magnifies this process for the high-income countries.

Suggested Citation

  • Joshua Aizenman, 2001. "De-industrialization and Emerging Market Economies," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 26(1), pages 25-36, June.
    • Handle: RePEc:jed:journl:v:26:y:2001:i:1:p:25-36
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    References listed on IDEAS

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    1. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, April.
    2. Patrick K. Asea, 1994. "The Balassa-Samuelson Model: A General Equilibrium Appraisal," UCLA Economics Working Papers 709, UCLA Department of Economics.
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