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Most recessions are a result of some shock to the economic system, typically amplified by financial accelerators, and leading to large balance sheet effects of households and firms, which result in the effects persisting. But, over time, the balance sheets get restored. Even banks recover. But episodically, the "shock" is deeper. It is structural. Among advanced countries, the movement from agricultural to manufacturing in the last century, and the more recent movement from manufacturing to the service sector reflect such a large economic transformation. The associated downturns are longer lasting. The usual responses, in particular, monetary policy, are only of limited efficacy. Policies have to be designed to facilitate such transformations: markets on their own typically do not do well. This paper explains why such transformations are associated with persistently high unemployment, and describes the effects of particular government policies. It looks at the lessons of the Great Depression both for the advanced countries and the developing countries as they go through their structural transformations.

We assess the empirical importance of changes in income and relative prices for structural transformation in the postwar United States. We explain two natural approaches to the data: sectors may be categories of final expenditure or value added; e.g., the service sector may be the final expenditure on services or the value added from service industries. We estimate preferences for each approach and find that with final expenditure income effects are the dominant force behind structural transformation, whereas with value-added categories price effects are more important. We show how the input-output structure of the United States can reconcile these findings. (JEL E21, L16)

This article accounts for the structural transformation of the Indian economy over the recent decades. Empirical estimates imply a relatively higher elasticity of substitution in services than in manufacturing, while the growth rates of labour-augmenting productivity in both of these sectors are of similar magnitude, in contrary to what previous growth accounting exercises suggest. Simulation of a multi-sectoral growth model with these estimates succeeds in replicating the trends of sectoral value-added shares as well as the declining labour shares of value added in manufacturing and services sectors during the sample period. The model improves on previous studies in matching the trends of sectoral shares of employment. Thus, the services sector's flexibility in factor substitution compared to that of manufacturing can explain, at least in part, the rapid growth of services in the recent period.JEL Classification: O11, O41, O53

The institutional problems that accompany the process of structural reforms in the railway transport of Ukraine are consider at the article. Purpose of the article. The main institutional problems of the Ukrainian railways at the sectoral, national and еuropean levels in the context of structural changes and to reveal the importance of state regulation of these processes in the industry are consider. Objectives of the research. The main tasks are: 1) to analyze the formal institutions that were adopted with the purpose of structural transformation in the industry; 2) to determine the role of the state in the implementation of structural transformations; 3) to summarize the institutional problems of the reform process and institutional adaptation of EU legislation. Methods of research. The structural-logical, economic and statistical, comparative methods are used in Article. Results of research. The main institutional problems of railway transport at the sectoral, national and European levels are generalized. The need of the updating of the institutional environment for structural reforms, including in terms of implementation of European directives and regulations are accelerate. An active position and support of the state is necessary. The field of application of results. The obtained results can be used by the Ministry of Infrastructure, implementing the state policy in the field of railway transport, in the process of developing and adapting formal institutions for the implementation of structural reforms in railway transports. Conclusions. The institutional problems make the dynamic process of structural changes in railway impossible. It creates a threat to the implementation of structural reforms in the long run. The elimination of the contradictions between the functioning institutional environment and the market structure will ensure the effective formation and organization of relations between actors in the process of developing the transportation market.This is due to the transformational changes in ...

This article examines how infrastructure development may best support structural transformation in developing countries. It critiques ongoing emphasis by multilateral financial institutions and other actors on infrastructure as an asset class and their focus on bankable projects. The article considers this approach too narrow for real economic transformation and argues development requires a more holistic approach, one that includes project assessment based on developmental criteria. Drawing on the pioneers of development and more recent literature on infrastructure systems, the article proposes development planning as a more promising approach and assesses how developing countries are faring regarding infrastructure planning for growth and transformation.JEL Classification: H54, O21, O40, P11

One aspiration of the Agricultural Fisheries Modernization Act (AFMA) is the promotion of industry dispersal and rural industrialization. This involves a policy of structural transformation, which attempts to transition the economy from a low productivity sector, such as agriculture, to a high productivity sector, such as industry. This study shows that despite the efforts of AFMA, this process has not been accomplished. Previous literature has attributed this failure to many factors, including policy failure and lack of investments. However, the paper argues that the role of technological change has not been given considerable attention. Empirical analysis demonstrates that policy formulation and capital accumulation are not sufficient in achieving structural transformation. Even if the correct policies are implemented and adequate investments are available, the sustainable transition from agriculture to industrialization will require the adoption of appropriate technology that utilizes local resources, including labor. To do this, the government must set up not only an environment for research and development and extension but also provide incentives in the form of transfers to the private sector to invest in technology.

ABSTRACTThis article examines gendered employment implications of structural transformation and technological upgrading in manufacturing. It focuses on 14 countries that relied heavily on exports of labour‐intensive and assembly industries that have long provided strategic entry points onto global markets. The study uses accounting decomposition methods to identify the drivers of changes in female shares of manufacturing employment as well as econometric analysis to assess the gendered impacts of technological upgrading. This study is the first to apply either of these methods at a detailed industry level as well as the first to estimate long‐run relationships between women's representation in manufacturing employment and technological upgrading. The main findings are that within‐industry effects on female shares of employment are generally more important than employment reallocation effects and that there is more often a negative than positive relationship between technological upgrading and female shares of employment at the country and industry levels. These negative effects of technological upgrading are found in four of the five strategic export‐oriented industries — food, beverages and tobacco products; textiles; apparel, leather products and footwear; and motor vehicles. The article discusses the policy implications of these findings and of the defeminization of manufacturing employment more generally.

This book identifies the key sources of growth that have played a significant role in Africa's recent robust growth as well as its efforts towards economic transformation. The chapters assess to what extent the existing macroeconomic frameworks among African countries have been streamlined to the countries' development priorities in order to achieve long-term growth and economic transformation. Taking into account the diversity of African countries, the authors establish the economic linkages between relevant macroeconomic policy variables and the key sources of growth and development among the selected African economies, based on both theoretical and empirical underpinnings. Following this, the authors suggest an outline of a macroeconomic framework for Africa's long-term growth and economic transformation.

This paper evaluates structural change, inequality dynamics, and industrial policy in South Africa between 1960 and the present day. We find that South Africa experienced growth-enhancing structural transformation until the early 1970s, before entering a period of premature deindustrialization. Today, the services sector has become the primary driver of growth and employment in the country, while the agriculture, mining, and manufacturing sectors have declined in relative importance. While the post-apartheid government has systematically strengthened its pro-poor policies, the high levels of poverty, unemployment, and inequality forged under the past race-based colonial and apartheid regimes remain stagnant. The future of South Africa's structural transformation and inclusive growth path rests on the ability of the country to move into more skills-intensive and higher value-added manufacturing, while also promoting employment-enhancing services subsectors.