Abstract

ORTIZ, Carlos Humberto; JIMENEZ, Diana Marcela  and  JARAMILLO, María Liliam. The fiscal expenditure of the war against possessors of illicit drugs: an approximation for Colombia Diversification. Lect. Econ. [online]. 2019, n.91, pp.11-39. ISSN 0120-2596.  https://doi.org/10.17533/udea.le.n91a01.

Productive diversification has been the main determinant of structural change of the economies. This hypothesis is analysed for nine countries under a relatively closed trade regime, and for nine Latin American countries under a relatively open trade regime with the United States. The equations of structural change that are tested are derived from a multisector dynamic general equilibrium model. The negative impact of productive diversification on the relative allocation of resources to the primary sector cannot be rejected for closed economies: greater diversification increases the relative productivity of manufacturing activities. The impact of a country’s comparative advantages on the allocation of resources to agriculture cannot be rejected: the relative agricultural productivity has a positive impact; the relative capital endowment has a negative impact; and the real exchange rate has a positive impact. In the last case, it is argued that low diversification induces a deterioration in the terms of trade, which favours specialization in primary activities.

Clasificación JEL: F41, F63, 011, 030, 040, 054.

Keywords : productive diversification; structural change; economic development; economic growth; trade regime.

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