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.
Explore why prosperity differs across countries through the roles of productivity, structural change, and the allocation of workers across sectors. Quantitative comparisons examine how physical capital, human capital, and aggregate efficiency contribute to differences in income and productivity. Evidence from Latin America and East Asia shows how the movement of labor between sectors can shape economy-wide performance.