Development of domestic markets and poverty reduction for poor developing economies
AbstractConstructing a model of structural change with household production, this paper finds two equilibrium paths: one path leads to a low-income steady state and the other to a high-income steady state. This paper shows that as long as the relative marginal productivity of manufactured goods in household production is high enough, a poor country may transform from a home-producing economy to a firm-producing one and eventually reaches a high standard of living. Is it empirically acceptable for us to claim that when a country starts with poorer pro-market infrastructures and institutions, she will be less likely to escape from poverty later on? This paper provides an empirical evidence of positive relationship between pro-market infrastructures and poverty reduction for poor developing countries.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 28 (2011)
Issue (Month): 1-2 (January)
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Web page: http://www.elsevier.com/locate/inca/30411
Household production Pro-market infrastructures Generalized balanced growth Cross-country analysis;
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