Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115307
Authors: 
Lee, Jong-Wha
McKibbin, Warwick J.
Year of Publication: 
2014
Series/Report no.: 
ADBI Working Paper Series 490
Abstract: 
This paper explores the impacts of more rapid growth in labor productivity in the service sector in Asia based on an empirical general equilibrium model. The model allows for input-output linkages and capital movements across industries and economies, and consumption and investment dynamics. We find that faster productivity growth in the service sector in Asia benefits all sectors eventually, and contributes to the sustained and balanced growth of Asian economies, but the dynamic adjustment is different across economies. This adjustment depends on the sectoral composition of each economy, the capital intensity of each sector, and the openness of each sector to international trade. In particular, during the adjustment to higher services productivity growth, there is a significant expansion of the durable manufacturing sector that is required to provide the capital stock that accompanies the higher aggregate economic growth rate.
JEL: 
J21
O11
O14
O41
O53
Document Type: 
Working Paper

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