Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215123 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12727
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper examines the drivers of the long-run structural transformation in Japan. We use a dynamic input-output framework that decomposes the reallocation of the total output across sectors into two components: the Engel effect (demand side) and the Baumol effect (supply side). To perform this task, we employ 13 seven-sector input-output tables spanning 100 years (1885 to 1985). The results show that the Engel effect was the key explanatory factor in more than 60% of the sector-period cases in the pre-WWII period, while the Baumol effect drove structural transformation in more than 75% of such cases in the post-WWII period. Detailed decomposition results suggest that in most of the sectors (agriculture, commerce and services, food, textiles and transport, communication and utilities), changes in private consumption were the dominant force behind the demand-side explanations. The Engel effect was found to be the strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the 20th century.
Subjects: 
long-run structural transformation
the Engel effect
Baumol's cost disease effect
sectoral productivity growth
JEL: 
O40
O10
Document Type: 
Working Paper

Files in This Item:
File
Size
720.72 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.