TY - JOUR
T1 - Trade, Structural Transformation, and Development
T2 - Evidence from Argentina 1869–1914
AU - Fajgelbaum, Pablo
AU - Redding, Stephen J.
N1 - Funding Information:
We would like to thank Princeton University and UCLA (University of California Los Angeles) for research support. Fajgelbaum thanks the UCLA Ziman Center for Real Estate for financial support. We are grateful to the editor and four anonymous referees for extremely helpful comments. We would like to thank Stephan Heblich and Ferdinand Rauch for
Publisher Copyright:
© 2022 The University of Chicago. All rights reserved. Published by The University of Chicago Press.
PY - 2022/5
Y1 - 2022/5
N2 - We provide new theory and evidence on the role of external and internal integration in structural transformation and economic development, using Argentina’s integration into the world economy in the late nineteenth century. Our theoretical model provides microfoundations for a spatial Balassa-Samuelson effect, in which locations closer to world markets have higher population densities, urban population shares, relative prices of nontraded goods, and land prices relative to wages, as well as specializing in traded goods that are transport-cost sensitive. We estimate the model’s parameters, provide evidence in support of this spatial Balassa-Samuelson mechanism, and find substantial effects of both external and internal integration on economic development.
AB - We provide new theory and evidence on the role of external and internal integration in structural transformation and economic development, using Argentina’s integration into the world economy in the late nineteenth century. Our theoretical model provides microfoundations for a spatial Balassa-Samuelson effect, in which locations closer to world markets have higher population densities, urban population shares, relative prices of nontraded goods, and land prices relative to wages, as well as specializing in traded goods that are transport-cost sensitive. We estimate the model’s parameters, provide evidence in support of this spatial Balassa-Samuelson mechanism, and find substantial effects of both external and internal integration on economic development.
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U2 - 10.1086/718915
DO - 10.1086/718915
M3 - Article
AN - SCOPUS:85128688074
SN - 0022-3808
VL - 130
SP - 1249
EP - 1318
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 5
ER -