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Development progeria: the role of institutions and the exchange rate

Philippine Review of Economics

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Title Development progeria: the role of institutions and the exchange rate
 
Creator Daway, Sarah Lynne S.; University of the Philippines School of Economics
Fabella, Raul V.; University of the Philippines School of Economics
 
Subject Development progeria, institutions, real exchange rate, low-income economies
 
Description Convergence is more the exception than the rule in the development landscape. As a possible explanation, we posit development progeria: the phenomenon where a low-income country exhibits the industrial share dynamics of high-income mature economies where the Non-traded Goods Sector outgrows the Traded Goods Sector and the share of the non-traded goods sector outstrips the share of the traded goods sector. We argue that this seems to be the case of the Philippines in the last 25 years. We then inquire into the drivers of this phenomenon. One possibility is the Rodrik hypothesis: that market and institutional distortions hamstring the Tradable goods sector more than they do the Non-tradable goods sector. The other possibility is the exchange rate policy being favorable or unfavorable to the Tradable goods sector. Using cross-country data for countries with per capita income of us$10,000 or less, we show that these two factors cannot be rejected as drivers of development progeria.JEL classification: 014, 043, F31
 
Publisher Philippine Review of Economics
 
Contributor —
 
Date 2015-12-31
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Identifier http://www.econ.upd.edu.ph/pre/index.php/pre/article/view/925
 
Source Philippine Review of Economics; Vol 52, No 2 (2015); 84-99
1655-1516
 
Language en
 
Rights Copyright (c) 2017 Philippine Review of Economics