Structural Change, Global Imbalances, and Employment in the Least Developed Countries

This paper addresses the effects of changes in the level and composition of global demand, and especially of global rebalancing, on trade flows and employment from a demand perspective. It emphasizes that these effects depend on the relative importance of rich and poor countries, as well as of different components of aggregate demand, in global growth. These effects, in turn, affect export opportunities of all countries, including the LDCs, as well as structural change and employment opportunities in their economies. The paper finally draws policy implications to ensure adequate and balanced global demand, which are indispensable for sustained income growth in all countries and especially in LDCs.