@article{Bekkers:333317,
      recid = {333317},
      author = {Bekkers, Eddy and Cariola, Gianmarco},
      title = {The determinants of structural change in the global  economy: An analysis based on historical simulations},
      address = {2021},
      year = {2021},
      note = {Presented during the 24th Annual Conference on Global  Economic Analysis (Virtual Conference)},
      abstract = {In this paper we analyse the determinants of structural  change based on historical simulations. We calibrate a  recursive dynamic Eaton-Kortum quantitative trade model  featuring multiple sectors, intermediate linkages and  non-homothetic CES preferences to WIOD data from 1995 until  2011. We conduct historical simulations imposing actual  growth rates of GDP, employment by skill type, population,  changes in trade balance, savings rates and trade costs,  estimated sectoral differences in productivity growth, and  changes in intermediate demand. Changes in trade costs are  based on actual changes in both tariffs and NTMs, instead  of inferring trade cost changes based on the rise in  international relative to intra-national trade. We use the  discrepancy between simulation outcomes and actual data to  estimate historical changes in the structure of  intermediate demand of firms. We use the model simulations  to identify the most important determinants of two  important changes in the structure of the global economy  between the 1990s and the 2010s: (i) structural change,  measured by the falling share of manufacturing and the  rising share of services in production; and (ii) the  increasing import competition from emerging economies. The  analysis compares the following determinants: (i) shifting  preferences because of rising incomes (non-homothetic  preferences); (ii) differential productivity growth; (iii)  changes in the intermediate demand structure; (iv) economic  growth in developing countries; (v) falling trade costs;  (vi) changes in the savings rate.},
      url = {http://ageconsearch.umn.edu/record/333317},
}