Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227902
Authors: 
Skott, Peter
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 2020-11
Abstract: 
Developing economies with high levels of open or hidden unemployment face structural transformation problems. Unlike in mature economies there are no structural aggregate demand problems, and sustained aggregate demand stimulus can lead to a profit squeeze in the modern sector and deindustrialization. Adaptations of functional finance to developing economies should aim to stabilize the level and composition of demand at values that are consistent with a target rate of growth of the modern sector. Populist temptations, however, may lead to deindustrialization.
Subjects: 
Sectoral transformation
Dutch disease
functional finance
JEL: 
E62
O11
O23
Document Type: 
Working Paper

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