Measuring progress towards structural adjustment

Abstract

While structural maladjustments have long been the distressing prerogative of less developed countries, they have now emerged in all their vigour in industrial countries as well. Indeed, after a decade in which cyclical imbalances were the focus of economists attention, structural disequilibria is now enjoying a new lease on life. This work argues for non-traditional ways of measuring, statistically, the progress of an industrial country on the road to structural adjustment. The author proposes an analysis based on the “income-share” or “resource-share” approach, offered as an alternative to to or complement of the more commonly used - but cyclically oriented - approach, generally focused on the rate of change of such variables as prices, money supply and domestic credit. An application to the Italian case is presented as an illustration of this unfamiliar type of analysis.

JEL: F32, F34, E63