Assessing the Impact of Structural Reforms Through a Supply-side Framework: The Case of Argentina

August 3, 2018

Preview Citation

Format: Chicago

Lusine Lusinyan. Assessing the Impact of Structural Reforms Through a Supply-side Framework: The Case of Argentina, (USA: International Monetary Fund, 2018) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The paper uses a supply-side framework based on a production function approach to assess the role of structural reforms in boosting long-term GDP growth in Argentina. The impact of product, labor, trade, and tax reforms on each supply-side channel—capital accumulation, labor utilization, and total factor productivity, proxied with an efficiency estimate—is assessed separately and then combined to derive the total impact on growth. The largest effect of structural reforms, involving regulatory changes that promote competition and facilitate flexible forms of employment, comes through the productivity/efficiency channel. Pro-competition regulation also improves labor utilization, while lower entry barriers and trade tariffs are important for capital accumulation. Structural reforms could have substantial effects on Argentina’s long-term GDP growth; for example, an ambitious reform effort to improve business regulatory environment would add 1–1½ percent to average annual growth of GDP.

Subject: Capital productivity, Commodity markets, Financial markets, Labor, Macrostructural analysis, Production, Structural reforms, Total factor productivity

Keywords: Argentina, Australia and New Zealand, Capital productivity, Commodity markets, Economic growth, Employment, Employment rate, Labor market indicator, Labor market reforms, Product market, Product market competition, Product market reform, Productivity, Structural reforms, Technical efficiency, Total factor productivity, Trade openness, Trade tariff, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/183
Stock No:

WPIEA2018183
ISBN:

9781484362990
ISSN:

1018-5941

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