Countries that have maintained competitive exchange rates and flexible labour markets have been more likely to exhibit growth enhancing structural change. The authors find that differences in the pattern of structural change can explain the differences in economic performance between many Asian countries (where structural change has been increased productivity), and countries in Latin America and Africa (where structural change has led to decreased productivity). However structural change in the context of intensified import competition caused by trade liberalisation can also cause displaced labour to move from high productivity to low productivity activities, as the least productive firms exit industries and others shed surplus workers. Using sectoral and aggregate labour productivity statistics for 38 countries, the paper confirms that growth-enhancing structural change – the movement of labour and other resources from less productive to more productive activities – is a key driver of growth and development. Cambridge, Massachusetts: National Bureau of Economic Research. Globalization, Structural Change, and Productivity Growth. Finally, national economic transformations may also require global coordination on macroeconomic and financial policies, as highlighted in the paper by Martins and Lucci below (2013). The literature also emphasises that shifting household livelihoods from subsistence agriculture to individual wage and salary employment takes generations, and the role of the non-agricultural informal economy as an intermediate stage in the process of economic transformation should not be overlooked (Fox and Pimhidzai, 2011). Among these are the need for policy experimentation, a focus on outcomes that favour the poor, and the need for stability and smooth transitions when implementing policies for economic transformation. The Growth Commission report (2008) highlights several factors that policymakers should take into account to ensure structural transformations lead to inclusive outcomes. However, there is mixed evidence that the conventional route of trade openness and financial liberalisation leads to an economic transformation that benefits the poor ( CAFOD, 2014). There is some consensus that policies that enable developing countries to maintain competitive exchange rates and flexible labour markets are likely to lead to structural transformations that increase productivity (McMillan and Rodrik, 2011 Martins and Lucci, 2013). Yet structural change can also hinder productivity and growth in developing countries, particularly in the context of an increasingly globalised world economy.įor example, McMillan and Rodrik (2011) find that structural change in developing country economies that have focused on exporting natural resources often reduces labour productivity, and intensified import competition as a result of trade liberalisation can result in displacement of workers and reduced growth. This course does not offer certificate at the moment.Studies agree that productivity enhancing structural transformations, which shift labour and resources from agriculture to more productive economic activities, are necessary components for sustained economic growth. critically assess the economic and policy challenges facing China going forward. explain the importance of different sources of economic growth during different periods since 1978 and assess the extent to which China has integrated itself into the global economy and the consequences of such integration for China and other countries explain how features of China’s fiscal and financial systems have impacted development outcomes describe the origin and consequences of China’s key economic reforms since 1978 After completing this course, you will be able to: This course will examine in detail the reforms that have contributed to China’s economic development and the current challenges facing the Chinese economy. How could such a remarkable transformation take place? Today, China is an upper-middle income country and the world’s largest trading nation, contributing more to global economic growth than any other nation. In 1978, after nearly 30 years of socialist planning under Mao Zedong, China was one of the world’s poorest countries, saddled with an inefficient, inward-looking economy.
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