Intersectoral dynamics and economic growth in Ecuador

Resumen

The authors analyze sectoral growth in
\n Ecuador, using multivariate co-integration analysis. They
\n find significant long-run relationships between the
\n agricultural, industrial, and service sectors. Moreover,
\n they are able to derive dynamic sector models that combine
\n the short-run links between the three sectors with long-run
\n dynamics. When disaggregate the three sectors into their
\n intra-sectoral components, they discover many interesting
\n relationships that contribute to a better understanding of
\n inter- and intra-sectoral dynamics in the context of
\n Ecuadorian economic growth. Their findings suggest that more
\n attention should be paid to inter-dependencies in sectoral
\n growth, since an improved understanding of inter-sectoral
\n dynamics may facilitate the implementation of policy aimed
\n at increasing economic growth in Ecuador. There appears to
\n be no direct link between the oil sector, and the non-oil
\n industrial sectors. But strong evidence supports
\n co-integration between the oil industry, and financial
\n services, as well as between the oil industry, and public
\n services. This means, among other things, that the oil
\n industry is likely to affect other sectors through the
\n financial sector, the public sector, or both.