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Kenya’s Development Path and Factor Prices 1964-2000

  • Bigsten, Arne


    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Durevall, Dick


    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

This study analyses how changes in factor abundance and trade policy have affected factor prices in Kenya since 1964. First there was a period of capital deepening, but this was reversed from 1982. As a result, there has been a shift of production towards the labour-intensive informal sector. The econometric analysis shows that in the long run factor proportions determined relative factor returns; for instance, an increase in the capital-labour ratio raised the wage-capital rental ratio. We did not find any significant impact of changes in goods prices, due to among other things changes in trade policy, on factor returns.

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Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 142.

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Length: 41 pages
Date of creation: 16 Aug 2004
Date of revision:
Handle: RePEc:hhs:gunwpe:0142
Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
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  1. Justin Yifu Lin, 2001. "Development Strategy, Viability, and Economic Convergence," William Davidson Institute Working Papers Series 409, William Davidson Institute at the University of Michigan.
  2. Leamer, Edward E. & Maul, Hugo & Rodriguez, Sergio & Schott, Peter K., 1999. "Does natural resource abundance increase Latin American income inequality?," Journal of Development Economics, Elsevier, vol. 59(1), pages 3-42, June.
  3. Leamer, Edward E, 1987. "Paths of Development in the Three-Factor, n-Good General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 961-99, October.
  4. Arne Bigsten & Jörgen Levin, 2010. "Growth, Income Distribution, and Poverty: A Review," Working Papers id:3296, eSocialSciences.
  5. Wacziarg, Romain & Welch, Karen Horn, 2003. "Trade Liberalization and Growth: New Evidence," Research Papers 1826, Stanford University, Graduate School of Business.
  6. John G. Fernald & Brent Neiman, 2010. "Growth accounting with misallocation: Or, doing less with more in Singapore," Working Paper Series 2010-18, Federal Reserve Bank of San Francisco.
  7. Neil R. Ericsson & James G. MacKinnon, 1999. "Distributions of error correction tests for cointegration," International Finance Discussion Papers 655, Board of Governors of the Federal Reserve System (U.S.).
  8. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  9. Phillips, P C B, 1988. "Reflections on Econometric Methodology," The Economic Record, The Economic Society of Australia, vol. 64(187), pages 344-59, December.
  10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  11. Michael Sarel, 1997. "Growth and Productivity in Asean Countries," IMF Working Papers 97/97, International Monetary Fund.
  12. Peter C.B. Phillips & Bruce E. Hansen, 1988. "Statistical Inference in Instrumental Variables," Cowles Foundation Discussion Papers 869R, Cowles Foundation for Research in Economics, Yale University, revised Apr 1989.
  13. Bruce E. Hansen, 2001. "The New Econometrics of Structural Change: Dating Breaks in U.S. Labour Productivity," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 117-128, Fall.
  14. Jones, Ronald W, 1974. "The Small Country in a Many-Commodity World," Australian Economic Papers, Wiley Blackwell, vol. 13(23), pages 225-36, December.
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