Faculty Publications

Title

Structural change and the intersectoral terms of trade: Southeast Asian experience

Document Type

Article

Keywords

Deindustrialization, Dualism, Intersectoral terms of trade, Southeast asia

Journal/Book/Conference Title

Journal of Economic Development

Volume

44

Issue

2

First Page

29

Last Page

47

Abstract

In this paper it is hypothesized that premature deindustrialization is related to the intersectoral terms of trade between agriculture and manufacturing. Using a dualistic model it is shown that factors which raise the price of agricultural goods relative to manufactured goods slow the rate of structural change from agriculture to manufacturing. Data from a number of Southeast Asian countries is used to create a panel data set to test the hypothesis. Indeed a rise in the relative price of agricultural goods does indeed slow structural change and that on important factor raising this relative price ratio has been the elimination of policies which indirectly tax agriculture. The policy implication is that in order to avoid this unexpected consequence of policy reform government policy must be aimed at dramatically increasing productivity growth in agriculture.

Department

Department of Economics

Department

Department of Finance

Original Publication Date

6-1-2019

DOI of published version

10.35866/caujed.2019.44.2.002

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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