Trade, Structural Transformation and Development: Evidence from Argentina 1869-1914

52 Pages Posted: 16 Jun 2014 Last revised: 7 Oct 2021

See all articles by Pablo D. Fajgelbaum

Pablo D. Fajgelbaum

University of California, Los Angeles (UCLA)

Stephen J. Redding

Princeton University

Multiple version iconThere are 2 versions of this paper

Date Written: June 2014

Abstract

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-19th 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 non-traded goods, and land prices relative to wages, and specialize in transport-cost-sensitive traded goods. 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.

Suggested Citation

Fajgelbaum, Pablo D. and Redding, Stephen J., Trade, Structural Transformation and Development: Evidence from Argentina 1869-1914 (June 2014). NBER Working Paper No. w20217, Available at SSRN: https://ssrn.com/abstract=2450917

Pablo D. Fajgelbaum (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

Stephen J. Redding

Princeton University ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~reddings/

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