Structural change and unbalanced economic growth in open developing economies
- Resource Type
- Original Paper
- Authors
- Sengupta, Anirban; Chattopadhyay, Subhasankar; Serletis, Apostolos
- Source
- Journal of Economics and Finance. 47(4):844-858
- Subject
- Supply side asymmetries
Unbalanced economic growth
Structural change
F41
F43
- Language
- English
- ISSN
- 1055-0925
1938-9744
In this paper we study the impact of international capital flows on the real exchange rate and sector allocation of labour and capital in open developing economies having demand side asymmetries (non-homothetic preferences) and supply side asymmetries (differences in capital intensities and productivity growth rates across sectors). We propose new channels, namely structural change and unbalanced growth, through which international capital flows can cause real exchange rate changes and sector reallocations of capital and labor in open developing economies.