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Growth and Inequality in the Dual Model of Development: The Role of Demand Factors

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Bourguignon, Francois

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Abstract

This paper relates growth and income distribution in the development of a dual economy. Its originality lies in the fact that the analysis of income inequality uses the whole Lorenz curve instead of some summary measures, and that the dual economy is represented through a fully specified general equilibrium model. Conditions for particular shifts in the Lorenz curve are derived. They mostly involve the income and price elasticities of demand faced by the traditional sector of the economy, and suggest that an unambiguous drop in income inequality is somewhat unlikely at the dual stage of development. Copyright 1990 by The Review of Economic Studies Limited.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 57 (1990)
Issue (Month): 2 (April)
Pages: 215-28
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Handle: RePEc:bla:restud:v:57:y:1990:i:2:p:215-28

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  1. Foellmi, Reto & Zweimüller, Josef, 2005. "Income Distribution and Demand-Induced Innovations," CEPR Discussion Papers 4985, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Azam, Jean-Paul & Bates, Robert & Biais, Bruno, 2009. "Political Predation and Economic Development," IDEI Working Papers 342, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  3. Lewis S. Davis, 2004. "Explaining the Evidence on Inequality and Growth: Informality and Redistribution," DEGIT Conference Papers c009_032, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
  4. Khan, M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," MPRA Paper 2201, University Library of Munich, Germany. [Downloadable!]
  5. Naude, Wim, 2008. "Entrepreneurship in Economic Development," Working Papers RP2008/20, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  6. François Facchini, 2007. "Inequalities and growth: Are there good and bad inequalities?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00270483_v1, HAL. [Downloadable!]
  7. Oliver Wavell Grant, 2002. "Does Industrialisation Push Up Inequality? New Evidence on the Kuznets Curve from Nineteenth-Century Prussian Tax Statistics," Oxford University Economic and Social History Series _048, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
  8. Juan Vicente-Perdiz & Luis M. Borge, 2000. "Desarrollo y desigualdad con progreso técnico," Investigaciones Economicas, Fundación SEPI, vol. 24(3), pages 709-726, September. [Downloadable!]
  9. Lewis S. Davis, 2007. "Explaining the Evidence on Inequality and Growth: Informality and Redistribution," The B.E. Journal of Macroeconomics, Berkeley Electronic Press, vol. 7(1). [Downloadable!]
  10. Fiszbein, Ariel, 1992. "Do workers in the informal sector benefit from cuts in the minimum wage?," Policy Research Working Paper Series 826, The World Bank. [Downloadable!]
  11. Jonathan Temple, 2002. "Wage Inequality in a Dual Economy," Bristol Economics Discussion Papers 02/531, Department of Economics, University of Bristol, UK. [Downloadable!]
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