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Dual economy models: a primer for growth economists

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  • Jonathan Temple

Abstract

This paper argues that dual economy models deserve a central place in the analysis of growth in developing countries. The paper shows how these models can be used to analyze the output losses associated with factor mis-allocation, aggregate growth in the presence of factor market distortions, international differences in sectoral productivity, and the potential role of increasing returns to scale. Above all, small-scale general equilibrium models can be used to investigate the interactions between growth and labour markets, to shed new light on the origins of pro-poor and labour-intensive growth, and to explore the role of the informal sector.

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  • Jonathan Temple, 2005. "Dual economy models: a primer for growth economists," Bristol Economics Discussion Papers 05/574, School of Economics, University of Bristol, UK.
    • Handle: RePEc:bri:uobdis:05/574
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    More about this item

    Keywords

    dual economies; factor market distortions; wage differentials; informal sector.;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General

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