GTAP Resources: Resource Display
| GTAP Resource #4045 |
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"Structural Change in Argentina, 1935 – 1960: The Role of Import Substitution and Factor Endowments" by Debowicz, Dario and Paul Segal Abstract This paper investigates structural change in Argentina between 1935 and 1960, a period of rapid industrialization and of relative decline of the agricultural sector. It has been argued that this relative decline of agriculture was due to the policies of import-substituting industrialization (ISI). This was also the period, however, that directly followed the closing of the land frontier, resulting in a declining land-labor ratio as the population continued to grow. We use a stylized dynamic 3-sector computable general equilibrium (CGE) model of the period to analyze the respective effects of ISI policies and the observed changes in factor endowments on the structure of the economy. We find that the declining land-labor ratio was more important than ISI in explaining relative stagnation in agriculture. ISI gave a substantial boost to manufacturing, but primarily at the expense of non-traded services, rather than of agriculture. The process of economic growth is rarely uniform: as an economy gets richer, so its structure also changes. In Argentina, much of the national economic debate over the twentieth century has concerned the causes and desirability of structural change, as the country industrialized and the traditionally-dominant agricultural sector declined in relative importance. This paper formalizes one strand of this long-standing debate in an attempt to answer the question: what was the underlying cause of structural change in Argentina after the end of the Belle Epoque through the period of import-substituting industrialization (ISI)? The two obvious candidates are the policies of ISI themselves, and the decline in the land-labor ratio that occurred over the same period. Such a question can only be answered in a general equilibrium framework, which we provide in the form of a stylized CGE model. The rise of manufacturing has exercised Argentine economists at least since Bunge’s (1920) discussion of the implications of the closing of the land fro... |
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- Baseline development - Dynamic modeling - Economic development - South America |
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Last Modified: 9/15/2023 2:05:45 PM
