Economic Integration, Sectoral Diversification, and Exchange Rate Policy in a Developing Economy

April 1, 2004

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Format: Chicago

Gabriel Srour. Economic Integration, Sectoral Diversification, and Exchange Rate Policy in a Developing Economy, (USA: International Monetary Fund, 2004) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper develops a simple three-sector model of a developing country with nominal wage rigidity, in which one sector is thought of as the primary sector and the other two are sectors in which the country can diversify. The paper then analyzes the relationship between the market structure of the nonprimary sectors and equilibrium adjustments to shocks in the primary sector. In particular, the paper examines under what conditions the country should promote one nonprimary sector over another. Among other things, it argues that developing countries should promote those sectors that are more integrated with the outside world

Subject: Exports, Income, Labor, Real wages, Wages

Keywords: Developing country, Primary sector, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/060
Stock No:

WPIEA0602004
ISBN:

9781451848083
ISSN:

1018-5941

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