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A Revisit to the Forgotten Debate after Half-Century: Balanced Versus Unbalanced Growth

Author

Listed:
  • Xiao Jiang

    (Denison University)

  • Chau Nguyen

    (Oxford University)

Abstract

The debate between balanced and unbalanced growth doctrines has generated much heat since the publication of Rosenstein-Rodan’s seminal work in 1943 but vanished in early 1980s. This paper intends to empirically revisit the forgotten debate by first compiling a harmonized international dataset that contains sectoral value-added data for up to 175 countries over 45 years. This dataset enables us to construct the index of sectoral imbalance for each country, which further allows us to update the key empirical tests for the balanced and unbalance growth hypotheses that appeared in the literature. Moreover, we also conduct cross-country growth regression analysis to systematically examine the effects of sectorial balance (or imbalance) on growth. Overall, we have found empirical support for the balanced growth hypothesis.

Suggested Citation

  • Xiao Jiang & Chau Nguyen, 2018. "A Revisit to the Forgotten Debate after Half-Century: Balanced Versus Unbalanced Growth," Working Papers 1817, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1817
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Growth; sectorial balance; development; cross-country regression;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other

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