China's economy faces the daunting challenge of shifting from a manufacturing-based economy to a service-based economy. Reforms in the services sector are slated to continue to take place in the coming years, including in the financial sector. In this paper, we explore China's success and...

This study explores the relationship between inequality and structural transformation by constructing a theoretical model, developing analytical frameworks, and implementing a case study. The general equilibrium model we develop demonstrates that inequality exhibits an inverted U shape as...

In this paper, we investigate the evolution of the informal sector through structural transformation. We develop both a three-sector and a five-sector dynamic general equilibrium (DGE) model, which can simultaneously account for structural transformation between agriculture, industry and...

This study examines the impact of trade and financial integration on structural transformation relying on data from 28 countries in sub-Saharan Africa (SSA) over the period 1985–2015. Results from our system generalized method of moments (GMM) show that, trade and financial integration...

We study the role of multinationals (MNCs) in facilitating firm-level and aggregate structural transformation. Using a stylized model of multinational production and trade, we show that an inward multinational liberalization in the manufacturing sector raises employment in host country firms,...

We use a two-sector model of structural transformation and balanced growth to show that the real interest rate, measured as the return on capital in units of GDP or in units of aggregate consumption, declines as income grows. This is due to the differential TFP growth in the goods producing...

This paper analyzes the degree of structural transformation in the Kyrgyz Republic's economy by applying the new approach developed by Hausmann and Klinger (2007) and Hidalgo et al. (2007). We focus on the level of sophistication of the country's exports, and discuss policy options to transform...