Seminar in Applied Economics: Linda Tesar

OCT 05, 2021 | 12:00 PM

Linda Tesar



The Graduate Center


October 05, 2021: 12:00 PM




PhD in Economics


Fall 2021 Seminar in Applied Economics will feature Linda Tesar. Professor Tesar will be presenting on "A North-South Model of Structural Change and Growth".

Please feel free to register and attend the event using the zoom link below:

Please note: Students, faculty, staff, alumni, and others who participate in any of the following seminars with their camera on or use a profile image are agreeing to have their video or image recorded solely for the purpose of creating a record for participants in this seminar to refer to, including those enrolled students who are unable to attend live.  If you are unwilling to consent to have your profile or video image recorded, be sure to keep your camera off and do not use a profile image. Likewise, participants who un-mute during the seminar or class and participate orally are agreeing to have their voices recorded.  If you are not willing to consent to have your voice recorded, you will need to keep your mute button activated and communicate exclusively using the "chat" feature, which allows participants to type questions and comments live. ‚Äč

"Our paper is motivated by a set of cross-country observations on economic growth, structural transformation, and investment rates in a large sample of countries. We observe a hump-shaped relationship between a country’s investment rate and its level of development, both within countries over time and across countries. Advanced economies reach their investment peak at a higher level of income and at an earlier point in time relative to emerging markets. We also observe the familiar patterns of structural change (a decline in the agricultural share and an increase in the services share, both relative to manufacturing). The pace of change observed in the 1960 to 1980 period in advanced economies is remarkably similar to that in emerging markets since 1995. Motivated by these facts, we develop a two-region model of the world economy that captures the dynamics of investment and structural change. The regions are isolated from each other up to the point of capital market liberalization in the early 1990s. At that point, capital flows from advanced economies to emerging markets and accelerates the process of structural change in emerging markets. Both regions gain from the liberalization of financial markets, but the majority of the gains accrue to the emerging economies. The overall magnitude of gains depends on the date of liberalization, the relative sizes of the two regions and the degree of asymmetry between the two regions at the point of liberalization. Finally, we consider the impact of a ”second wave” of liberalization when China fully opens its economy to capital inflows."