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On the Organization of Rural Markets and the Process of Economic Development

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  • Drazen, Allan
  • Eckstein, Zvi

Abstract

The authors consider how the organization of rural markets will affect capital accumul ation and long-run aggregate income in the development process. They show that in a simple, dual economy, overlapping-generations model, c apital accumulation and aggregate income will be lowest when both fac tor markets in the agricultural sector are fully competitive. Both ca pital and aggregate income will be higher when land is not traded but the labor market is competitive, and highest in the absence of compe titive markets in both factors in the agricultural sector, when incom e distribution favors rural workers over landlords. Copyright 1988 by American Economic Association.

Suggested Citation

  • Drazen, Allan & Eckstein, Zvi, 1988. "On the Organization of Rural Markets and the Process of Economic Development," American Economic Review, American Economic Association, vol. 78(3), pages 431-443, June.
  • Handle: RePEc:aea:aecrev:v:78:y:1988:i:3:p:431-43
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    3. Peter Rangazas & Alexandros Mourmouras, 2013. "Wage and Fertility Gaps in Dual Economies," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 59-83, June.
    4. Ho, Chi Pui, 2016. "Rise of Women in Unified Growth Theory: French Development Process and Policy Implications," MPRA Paper 73864, University Library of Munich, Germany.
    5. Yu Chen & Haiwen Zhou, 2017. "An Overlapping-Generations Model of Firm Heterogeneity in Economic Development," Frontiers of Economics in China, Higher Education Press, vol. 12(4), pages 660-676, December.
    6. Haiwen Zhou & Ruhai Zhou, 2016. "A Dynamic Model of the Choice of Technology in Economic Development," Frontiers of Economics in China, Higher Education Press, vol. 11(3), pages 498-518, September.
    7. Rodriguez Acosta, Mauricio, 2016. "Essays in political economy and resource economic : A macroeconomic approach," Other publications TiSEM 1e39ef1b-43a2-4f95-892c-6, Tilburg University, School of Economics and Management.
    8. Monchuk, Daniel C. & Miranowski, John A., 2002. "The Effect Of Innovative Behavior And Technological Spillovers On Employment Growth In The Us Midwest," 2002 Annual meeting, July 28-31, Long Beach, CA 19773, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Claudio Araujo & Catherine Araujo Bonjean & Jean-Louis Combes & Pascale Combes-Motel, 2006. "Insécurité foncière et croissance économique au Brésil," Revue d’économie du développement, De Boeck Université, vol. 14(1), pages 79-97.
    10. Gersbach, Hans & Siemers, Lars-H. R., 2010. "Land Reforms And Economic Development," Macroeconomic Dynamics, Cambridge University Press, vol. 14(04), pages 527-547, September.
    11. Love, David R. F., 1997. "A dynamic general equilibrium model of industrialization when manufactures are unnecessary," Journal of Development Economics, Elsevier, pages 357-385.
    12. Skinner, Jonathan, 1996. "The dynamic efficiency cost of not taxing housing," Journal of Public Economics, Elsevier, pages 397-417.
    13. Bencivenga, Valerie R & Smith, Bruce D, 1997. "Unemployment, Migration, and Growth," Journal of Political Economy, University of Chicago Press, pages 582-608.
    14. Graziella Bertocchi, 2006. "The Law of Primogeniture and the Transition from Landed Aristocracy to Industrial Democracy," Journal of Economic Growth, Springer, vol. 11(1), pages 43-70, March.
    15. Alessio Moro & Solmaz Moslehi & Satoshi Tanaka, 2017. "Does Home Production Drive Structural Transformation?," American Economic Journal: Macroeconomics, American Economic Association, pages 116-146.
    16. Raymond Riezman & Ping Wang & Eric Bond, 2012. "Trade, Urbanization and Capital Accumulation in a Labor Surplus Economy," 2012 Meeting Papers 776, Society for Economic Dynamics.
    17. Ho, Chi Pui, 2016. "Industrious Selection: Explaining Five Revolutions and Two Divergences in Eurasian Economic History within a Unified Growth Framework," MPRA Paper 73862, University Library of Munich, Germany.
    18. Jordan Rappaport & Jeffrey D. Sachs, 2001. "The U.S. as a coastal nation," Research Working Paper RWP 01-11, Federal Reserve Bank of Kansas City.
    19. Peter Stauvermann, 2002. "Endogenous growth, land and intemporal efficiency," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 10(1), pages 63-77.
    20. Skinner, Jonathan, 1989. "Housing wealth and aggregate saving," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 305-324, May.
    21. ZHANG Wei-Bin, 2015. "Values Of Land And Renewable Resources In A Three-Sector Economic Growth Model," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 156-186, April.
    22. Raymond Riezman & Ping Wang & Eric Bond, 2015. "Urbanization and Economic Development: A Tale of Two Barriers," 2015 Meeting Papers 566, Society for Economic Dynamics.

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