Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297161 
Year of Publication: 
2024
Series/Report no.: 
LEM Working Paper Series No. 2024/06
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
This paper investigates the deindustrialization process in Germany and Spain from 1995 to 2018. It is argued that the deindustrialization trajectories of each country are partially related to their growth models. An analysis in two steps is conducted. First, using the OECD input-output tables, a Hierarchical Structural Decomposition Analysis is applied, and the variation in the manufacturing value-added share is decomposed into five deindustrialization drivers: income, investment, relative prices, outsourcing and globalization. Second, building on the growth model perspective, an interpretative framework to analyze the evolution of the five abovementioned drivers is presented. The interaction between institutions, aggregate demand and the economic structure is explicitly considered in this framework. The comparative study of the German and Spanish cases and the distinction between the pre- and post-crisis periods illustrates the consequences of the distinct growth models (and the economic policies on which they are grounded) on structural change. The results suggest that the evolution of the deindustrialization drivers (and thus the manufacturing value-added share) in both countries is well-explained by their specific fiscal, labor, and industrial policies.
Subjects: 
deindustrialization
growth models
input-output analysis
macroeconomic policies
industrial policy
JEL: 
E12
E25
P16
C67
O14
Document Type: 
Working Paper

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