Economics Seminar Series- Ying Chen
Tuesday, March 26, 2019 at 4:00 pm to 6:00 pm
Albert and Vera List Academic Center, #1009 6 East 16th Street , New York, NY 10003
NSSR Economics Assistant Professor Ying Chen will present her paper:" Before Defying Comparative Advantage: Ha-Joon Chang and Justin Lin’s Debate Revisited."
One of the critical debates in the field of development economics, as exemplified by Chang and Lin (2009), is whether underdeveloped countries should follow or defy comparative advantage in the global trade. The implication of this debate can be misleading because it leaves out capital accumulation, and in turn the discussion of the possible methods of capital accumulation as a crucial step before any country can defy its comparative advantage. In fact, both scholars share the same implicit assumption that the only possible development path for a country is to participate in the hierarchical framework of today's global capitalism.
In this paper, we first highlight that there is no existing consensus regarding a quantitative threshold of comparative advantage. We then show that the income measure used by Chang and Lin is biased in its evaluation of a country's development status. Specifically, the three countries that Chang cited, Finland, Japan and South Korea, had completed their initial physical and human capital accumulation before they started to move up to capital-intensive industries. This finding suggests that these exemplary countries had little resemblance to today's underdeveloped countries.
On the other hand, China in the 1950s resembled today’s underdeveloped countries in many ways when it started to defy comparative advantage and launch industrialization. Therefore, this paper calls for a development policy discussion that goes beyond referring only to the models of capitalist development success."
Hosted by the NSSR/Economics Department, the seminar series features lectures, paper and book presentations from prominent Economists.
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