Table of Contents

The Economies of Argentina and Brazil

The Economies of Argentina and Brazil

A Comparative Perspective

Edited by Werner Baer and David Fleischer

This book compares the successes and failures of the development and growth processes of Argentina and Brazil. It provides important insights into the different performances of these economies through a series of comparative essays written by Argentinian and Brazilian economists.

Chapter 7: General Facts About the Service Sector in Argentina

Ricardo Bebczuk

Subjects: development studies, development economics, economics and finance, development economics

Extract

Ricardo Bebczuk 7.1 INTRODUCTION In economies, the services sector gets a bad rap. Services have been accused of, among other things, causing slow economic growth, poor export performance, and increasing informality and poverty. Even though the services sector’s performance has been observed and studied since the 1950s, little work exists on the subject for Latin America and, to the best of our knowledge, none has focused on Argentina. This chapter aims to go over the technical arguments that lie behind this negative view, and assess their merits on the basis of statistical evidence for Argentina and selected economies around the world. The analysis has indisputable policy relevance in so far as this prejudice against the services sector – the largest productive sector in terms of output and employment around the world – may lead to flawed development strategies. In a nutshell, our review defies the usual stand on this matter by providing support to the claim that services do not jeopardize the attainment of key macroeconomic goals, including economic growth. 7.2 THE CONTRIBUTION OF SERVICES TO TOTAL OUTPUT AND EMPLOYMENT Far from a uniform sector, the services sector is a miscellaneous collection of industries whose one common feature is that services are not part of the primary or manufacturing sector. Services can be classified into five activities: Distribution services: Wholesale and retail trade, transport and storage, and communications (including IT). Social services: Health and education and government administration. Intermediation services: Real estate and financial. 133 809962 BAER PRINT (M2763).indd 133 27/09/2011...

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