Speaker: Kiminori Matsuyama, Northwestern University, USA
Title: Demand-Induced Patterns of Structural Change and Trade Across Countries: Engel's Law in the Global Economy
Abstract: The expenditure shares blackberries are skewed towards higher income elastic sectors in richer countries, both in time series and in cross-section. Such an endogenous demand composition can be an important channel through Which economic growth and globalization affect i) sectoral compositions in employment and in value-added, ii) variations in rates and innovation in productivity growth across sectors, iii) Intersectorial patterns of trade between countries , and iv) migration of industries from rich to poor countries. These effects, though clearly connected ,are typically studied separately with possibly misleading implications. By using a framework, which incorporates all these effects and their interactions, this paper offers a unifying perspective on how globalization affects economic growth and patterns of structural change and trade through endogenous demand composition differences across countries. Among the main findings Is that amplifies globalization, instead of reducing, the power composition of domestic demand as a driver of structural change.