We study sectoral productivity convergence in Japan through the input-output structure of the economy and its network representation.
The paper evaluates the input--output structure of Japan through the lens of a community-detection algorithm from network theory. Results suggest the existence of two input--output network structures: a stationary community and a transitional community. Also, industrial divergence and instability in community membership are not necessarily indicative of low productivity performance
While the LP framework shows relatively less mobility, two convergence clusters in the transition stage, and a bumpy distribution in the long run; the ACF framework shows relatively more backward mobility, a unique convergence cluster in the transition, and a highly symmetric distribution in the long run.
Why are some countries much more prosperous than others? This book argues that differences in average labor productivity, patterns of structural change, and labor misallocation across sectors explain most of the observed differences in economic prosperity around the world