Answer to Question #4705 in Macroeconomics for ruchika

Question #4705
Can the stagnant employment structure in india during the early part of the 20th century be construed as symptomatic of deindustrialization?
Expert's answer
Answer: yes, we can
Deindustrialization - the process of social and economic changes caused by reduction or complete cessation of industrial activities in the region or country, especially in heavy industry and in industrial production. Deindustrialization is opposed to industrialization.
China and India had a special degree of deindustrialization
There are several different symptoms of de-industrialization. Kainkross (1982) and Lever (1991) offer four possible definitions of symptoms of de-industrialization:
- A steady decline in industrial production and employment in the manufacturing sector. It is necessary to distinguish such processes from the symptoms of prolonged cyclical recessions of the economy;
- The migration process from the production of goods to the production of services, which in the final product decreases the share of industrial production and the share of services. The same applies to a change in the ratio of the employed in the production of goods and services production population. It should be borne in mind that the absolute increase in the production of services (or the number of people employed in this sector) in the absence of reducing the volume of production does not mean the process of de-industrialization;
- Decline in industrial production in the export structure of the country or region;
- Long-term persistence of the trade deficit will lead to inability to pay for imports, and thus lead to a new spiral of decline in industrial production..

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