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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 analyse the output losses associated with factor misallocation, 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," Manchester School, University of Manchester, vol. 73(4), pages 435-478, July.
    • Handle: RePEc:bla:manchs:v:73:y:2005:i:4:p:435-478
    DOI: 10.1111/j.1467-9957.2005.00454.x
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    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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