KALDOR-VERDOORN LAWS IN THE LATIN AMERICAN COUNTRIES, 1992-2021

Abstract

The effect of manufacturing production on Gross Domestic Product (GDP) growth and on total and manufacturing productivity, as well as the dynamic effect created in the economy by the industrial sector, under Kaldor’s view, is a topic under debate due to the patterns presented in deindustrialisation and industrial productivity in developed countries. However, developing countries such as some in the Latin American region have presented different patterns. This article aims to study the validity of Kaldor’s Laws in the largest economies in Latin America and compare results with the case of European economies. For this, an econometric methodology of static and dynamic panel data is used in a sample of 12 countries in the time period between 1992 and 2021. The study yields particular results such as a small coefficient between the growth of manufacturing and its productivity, but a dynamic effect among the two variables.