Journal of Globalization and Development

Published by De Gruyter

Volume 12 Issue 1

June 2021

Issue of Journal of Globalization and Development

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Contents
Journal Overview

Publicly Available November 24, 2021

Frontmatter

Page range: i-ii

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Research Foundation

March 26, 2021

Rethinking Unconditional Convergence in Manufacturing in the Age of New Technologies

Bilge Erten, Oliver Schwank

Page range: 1-45

Abstract

We revisit unconditional convergence within manufacturing with a focus on differences in technology intensity across industries. For Latin American and Sub-Saharan African economies, we observe that low-technology and medium-technology intensive industries experience a significantly slower convergence in comparison to high-technology intensive ones. In contrast, we find no evidence of a significant differential for low-technology industries’ convergence in Asian economies, and if anything, we see that medium-technology intensive sectors experience a faster convergence than high-technology industries. In developed economies, we observe that while low-technology industries experience a slightly slower convergence, medium-technology industries converge at similar rates to high-technology industries. We also find that these differences emerge during the period of increased global integration, which exposed developing economies to increased competition both from advanced markets and fast industrializers within the developing world. Finally, we show that differential convergence patterns are stronger after the peak of manufacturing employment share has been reached. We discuss the implications of these trends for the future of development policy making.

Policy Analysis

May 27, 2021

Perfect Storm: Climate Change and Tourism

Serhan Cevik, Manuk Ghazanchyan

Page range: 47-61

Abstract

While the world’s attention is on dealing with the COVID-19 pandemic, climate change remains a greater existential threat to vulnerable countries that are highly dependent on a weather-sensitive sector like tourism. Using a multidimensional index, this study investigates the long-term impact of climate change vulnerability on international tourism in a panel of 15 Caribbean countries over the period 1995–2017. Empirical results show that climate vulnerability already has a statistically and economically significant negative effect on international tourism revenues across the region. As extreme weather events are becoming more frequent and severe over time, our findings indicate that the Caribbean countries need to invest more in adaptation and mitigation in order to reduce vulnerabilities.

Research Foundation

November 15, 2021

Does Premature Deindustrialization Matter? The Role of Manufacturing versus Services in Development

Gaurav Nayyar, Marcio Cruz, Linghui Zhu

Page range: 63-102

Abstract

“Premature deindustrialization” typically reflects the fact that the services sector has grown faster than manufacturing at lower levels of per capita income compared to the past. This paper, based on cross-country data, shows that the rising share of services is largely not driven by a statistical artifact whereby what was earlier subsumed in manufacturing value added is now accounted for as service sector contributions. Yet, this matters less for development opportunities because features of manufacturing that were thought of as uniquely special for productivity growth are also shared by some services. And the growth of these high-productivity services is not closely linked to a manufacturing base as it draws on both intermediate demand from other sectors as well as final demand from home and abroad. The prospect of services-led development in lower-income countries however, is limited by the fact that a given service subsector is unlikely to provide opportunities for productivity growth and job creation for unskilled labor simultaneously.

Policy Analysis

October 29, 2021

Carry Trade, Exchange Rates, and the Balance-of-Payments

Nelson H. Barbosa-Filho

Page range: 103-116

Abstract

This paper presents a partial equilibrium model that integrates interest rate arbitrage with the balance-of-payments constraint to determine the real exchange rate. The sequential logic is the following: (i) carry-trade determines the term premium, with the spot rate showing greater volatility than the forward rate, (ii) uncovered interest rate parity determines the spot rate based on the real exchange rate consistent with a financial constraint, defined as a stable ratio of foreign reserves to foreign debt; and (iii) the trade balance consistent with the financial constraint determines the long-run real exchange rate for a given ratio of domestic to foreign income.

About this journal

Objective
The Journal of Globalization and Development (JGD) publishes academic research and policy analysis on globalization, development, and in particular the complex interactions between them. The journal is dedicated to stimulating a creative dialogue between theoretical advances and rigorous empirical studies to push forward the frontiers of development analysis. It also seeks to combine innovative academic insights with the in-depth knowledge of practitioners to address important policy issues. JGD encourages diverse perspectives on all aspects of development and globalization, and attempts to integrate the best development research from across different fields with contributions from scholars in developing and developed countries.

Topics

Economic development
Financial investments
Development Aid
Development policies
Growth models
Sovereign debt

Article formats
Symposia Articles, Articles, Policy Analysis

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