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Productivity, Structural Change and Latin A merican Development
Author(s) -
Saravia Antonio,
Machicado Carlos Gustavo,
Rioja Felix
Publication year - 2014
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12106
Subject(s) - industrialisation , economics , gross domestic product , productivity , per capita , latin americans , ranking (information retrieval) , convergence (economics) , agriculture , order (exchange) , econometrics , agricultural economics , macroeconomics , geography , demography , population , linguistics , philosophy , archaeology , finance , machine learning , sociology , computer science , market economy
We calibrate a simple neoclassical growth model adapted to illustrate a process of structural transformation or industrialization to a group of nine S outh A merican countries. The paper shows that low levels of agricultural productivity can substantially delay the process of industrialization, which, together with low levels of non‐agricultural productivity observed in recent decades, satisfactorily explains the significant differences in gross domestic product ( GDP ) per capita levels among the countries in our sample. The results suggest that A rgentina underwent the process of industrialization first followed by U ruguay, C hile, B razil, C olombia, E cuador, P eru, P araguay and B olivia. The model predicts that the ranking of these countries in terms of GDP per capita would follow this order until convergence occurs. The empirical evidence confirms the prediction of the model with the exceptions of U ruguay and C hile which caught up with A rgentina in terms of GDP per capita levels in the late 1980s.