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Structural economic dynamics: an alternative approach to North--South models

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  • Ricardo Azevedo Araujo
  • Joanílio Rodolpho Teixeira

Abstract

This paper isolates the mechanisms responsible for the difficulties facing poor regions in growing faster than rich ones. The analysis of uneven development is carried out in a framework where changes in demand composition are consistent with Engel's Law. The standpoint of the analysis is the interaction between technical progress--which produces responses in per capita income--and changes of per capita consumption. The paper focuses on one case in which preferences are homothetic and there is capital dependence, showing that the latter assumption is sufficient to explain the inequalities between poor and rich regions. When dealing with the case of non-homothetic tastes, adverse movements in the terms of trade and the international demonstration effect, which are both due to the inelastic demand for goods produced by poor regions, are the mechanisms responsible for uneven development. Copyright 2004, Oxford University Press.

Suggested Citation

  • Ricardo Azevedo Araujo & Joanílio Rodolpho Teixeira, 2004. "Structural economic dynamics: an alternative approach to North--South models," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 705-717, September.
  • Handle: RePEc:oup:cambje:v:28:y:2004:i:5:p:705-717
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    File URL: http://hdl.handle.net/10.1093/cje/beh031
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    Cited by:

    1. Michael Peneder, 2017. "Competitiveness and industrial policy: from rationalities of failure towards the ability to evolve," Cambridge Journal of Economics, Oxford University Press, vol. 41(3), pages 829-858.
    2. Gianpaolo Mariutti, 2007. "Production of commodities by means of labour. A theory of international relations," Working Papers 44/2007, University of Verona, Department of Economics.
    3. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2007. "A structural economic dynamics approach to balance-of-payments-constrained growth," Cambridge Journal of Economics, Oxford University Press, vol. 31(5), pages 755-774, September.
    4. André Varella Mollick & João Ricardo Faria & Pedro H. Albuquerque & Miguel A. León-Ledesma, 2008. "Can globalisation stop the decline in commodities' terms of trade?," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 683-701, September.
    5. Andre Varella Mollick & Joao Ricardo Faria & Pedro H. Albuquerque & Miguel A. Leon-Ledesma, 2005. "Can Globalisation Stop the Decline in Commodities' Terms of Trade? The Prebisch-Singer Hypothesis Revisited"," Studies in Economics 0510, School of Economics, University of Kent.
    6. Ricardo Azevedo, Araujo & Joanilio Rodolpho, Teixeira, 2010. "Investment Specific Technological Progress and Structural Change," MPRA Paper 53672, University Library of Munich, Germany.
    7. Dietmar Meyer & Jörg Lackenbauer, 2005. "EU cohesion policy and the equity-efficiency trade-off - Adding dynamics to Martin's model," ERSA conference papers ersa05p564, European Regional Science Association.
    8. Araujo, Ricardo Azevedo & Teixeira, Joanilio Rodolpho, 2010. "Structural Change and Macrodynamic Capabilities," MPRA Paper 30381, University Library of Munich, Germany.

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