Deindustrialization: Causes and Implications

38 Pages Posted: 15 Feb 2006

See all articles by Robert Eric Rowthorn

Robert Eric Rowthorn

affiliation not provided to SSRN

Ramana Ramaswamy

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: April 1997


All advanced economies have experienced a secular decline in the share of manufacturing employmenta phenomenon referred to as deindustrialization. This paper argues that, contrary to popular perceptions, deindustrialization is not a negative phenomenon, but is the natural consequence of the industrial dynamism in an already developed economy, and that North-South trade has had very little to do with deindustrialization. The paper also discusses the implications of deindustrialization for the growth prospects and the nature of labor market arrangements in the advanced economies.

Keywords: Deindustrialization, North-South trade

JEL Classification: 01, 03, F1, F43

Suggested Citation

Rowthorn, Robert Eric and Ramaswamy, Ramana, Deindustrialization: Causes and Implications (April 1997). IMF Working Paper No. 97/42, Available at SSRN:

Robert Eric Rowthorn (Contact Author)

affiliation not provided to SSRN ( email )

Ramana Ramaswamy

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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