Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129963
Authors: 
Leal, Julio
Year of Publication: 
2015
Series/Report no.: 
Working Papers, Banco de México 2015-23
Abstract: 
For a typical developing country, this paper shows that once inter-sectoral linkages are taken into account, closing the productivity gap in a number of services gives bigger gains in aggregate productivity than closing it in agriculture or in manufacturing. This is performed in the context of an input-output economy and general equilibrium. Also, the importance of sector-specific distortions that produce cross-sector misallocation is addressed. I compute the effect of the removal of these distortions on aggregate productivity using the input-output model and find that this could increase productivity up to 68%, depending on whether the rents from distortions stay in the economy or not.
Subjects: 
key sectors
economic development
input-output linkages
cross-sector misallocation
JEL: 
O1
O41
C67
Document Type: 
Working Paper
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