2018/33 | LEM Working Paper Series | ||||||||||||||||
The Role of Comparative Advantage, Endowments and Technology in Structural Transformation |
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Giovanni Dosi and Matteo Tranchero |
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Keywords | |||||||||||||||||
structural change; endowments and trade; technological gaps; catching-up
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JEL Classifications | |||||||||||||||||
O14 ,O33 , F43
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Abstract | |||||||||||||||||
In this chapter we discuss the role of natural resources and endowment structures on structural
change. Departing from theories of trade that stress specialization according to one’s comparative
advantages as the key route to development, we articulate an alternative point of view on the
role of technological learning and absolute advantages for structural transformation. Ricardian
adjustment processes relying on endowment-based comparative advantages are often times a misleading
driver of development; rather, competitiveness offers a better criterion to achieve sustained
economic well-being. This theoretical perspective provides useful guidance to interpret the effects
of unbridled globalization and the role of natural resources relative to industrial and trade policies
in shaping the process of structural change and economic development.
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