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International Conference - Lille, France (3-5 July 2019)

Envisioning the Economy of the Future, and the Future of Political Economy

AN ESTIMATION OF STRUCTURAL CHANGE TOWARDS THE SOPHISTICATION
Nelson Marconi  1@  
1 : Fundação Getulio Vargas [São Paulo] FGV

There is a reasonable consensus in the literature about the definition that the process of economic development occurs when there is capital accumulation associated with increased productivity, which implies raising per capita income and improving the living standards of the population. This increase in productivity occurs when production and employment are directed to the sectors that generate the highest value added per worker, a process that can be called "productive sophistication" (Bresser-Pereira, Oreiro and Marconi, 2016).

Therefore, to create an index that reflects the composition of the productive structure, as well as its changes over time, is relevant to analyse if the countries are going through the process of sophistication described above. The index will be unprecedented, since it will adopt a calculation methodology that will assign greater importance in the process of structural change to those sectors that generate greater value added per capita, unlike those currently calculated, such as those adopted by Dietrich (2012) and Vu (2017). The indicator will consider the changes in the composition of employment towards the sectors that show productivity growth and it will attribute greater weight in the composition of the index to the sectors that generate the highest value added per capita, starting from the productivity decomposition methodology adopted by de Vries, Timmer and de Vries (2015).

This article will aim to present the methodology for calculating this indicator, to estimate it for a number of countries for which data are available, in addition to its evolution over time, and to discuss some factors that may be contributing to the behaviour observed in the several countries. There will be a contribution to the debate about the motivations that lead to the structural change, towards its sophistication, of an economy.


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