IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

The Dual Economy in Long-run Development

  • Dietz Vollrath


    (Department of Economics, University of Houston)

This paper provides a dynamic model of the dual economy in which differences in productivity across sectors arise endogenously. Rather than relying on exogenous price distortions, duality arises because of differences between sectors in the separability of their fertility and labor decisions. The model demon- strates how a dual economy will originate, persist, and eventually disappear within a unified growth framework. It is also shown that agricultural productivity growth will exacerbate the ine±ciencies of a dual economy and slow down long-run growth.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Department of Economics, University of Houston in its series Working Papers with number 2008-03.

in new window

Length: 28 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:hou:wpaper:2008-03
Contact details of provider: Postal: Houston TX 77023
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Graham, Bryan S. & Jonathan Temple, 2002. "Rich Nations, Poor Nations: How much can multiple equilibria explain?," Royal Economic Society Annual Conference 2002 91, Royal Economic Society.
  2. Fumio Hayashi & Edward C. Prescott, 2008. "The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 573-632, 08.
  3. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997. "Beyond Balanced Growth," NBER Working Papers 6159, National Bureau of Economic Research, Inc.
  4. Dahan, Momi & Tsiddon, Daniel, 1998. " Demographic Transition, Income Distribution, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 29-52, March.
  5. David de la Croix & Matthias Doepke, 2001. "Inequality and Growth: Why Differential Fertility Matters," UCLA Economics Working Papers 803, UCLA Department of Economics.
  6. Jones, Charles I, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 495-525, May.
  7. Douglas Gollin & Stephen Parente & Richard Rogerson, 2001. "Farm Work, Home Work and International Productivity Differences," Department of Economics Working Papers 2002-08, Department of Economics, Williams College.
  8. Kiminori Matsuyama, 1991. "Agricultural Productivity, Comparative Advantage and Economic Growth," NBER Working Papers 3606, National Bureau of Economic Research, Inc.
  9. Kogel, Tomas & Prskawetz, Alexia, 2001. " Agricultural Productivity Growth and Escape from the Malthusian Trap," Journal of Economic Growth, Springer, vol. 6(4), pages 337-57, December.
  10. Oded Galor, 2004. "From Stagnation to Growth: Unified Growth Theory," GE, Growth, Math methods 0409003, EconWPA.
  11. Areendam Chanda & Carl-Johan Dalgaard, . "Dual Economies and International Total Factor Productivity Differences," Departmental Working Papers 2005-11, Department of Economics, Louisiana State University.
  12. Galor, Oded & Moav, Omer & Vollrath, Dietrich, 2008. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions and the Great Divergence," CEPR Discussion Papers 6751, C.E.P.R. Discussion Papers.
  13. Jonathan Temple & Ludger Woessmann, 2004. "Dualism and Cross-Country Growth Regressions," CESifo Working Paper Series 1290, CESifo Group Munich.
  14. Douglas Gollin & Stephen Parente & Richard Rogerson, 2002. "The Role of Agriculture in Development," Department of Economics Working Papers 2002-09, Department of Economics, Williams College.
  15. Galor, Oded & Moav, Omer, 2001. "Natural Selection and the Origin of Economic Growth," CEPR Discussion Papers 2727, C.E.P.R. Discussion Papers.
  16. Francesco Caselli, 2005. "Accounting for Cross-Country Income Differences," CEP Discussion Papers dp0667, Centre for Economic Performance, LSE.
  17. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
  18. Jonathan Temple, 2005. "Dual Economy Models: A Primer For Growth Economists," Manchester School, University of Manchester, vol. 73(4), pages 435-478, 07.
  19. Holger Strulik & Jacob Weisdorf, 2008. "Population, food, and knowledge: a simple unified growth theory," Journal of Economic Growth, Springer, vol. 13(3), pages 195-216, September.
  20. Restuccia, Diego & Yang, Dennis Tao & Zhu, Xiaodong, 2008. "Agriculture and aggregate productivity: A quantitative cross-country analysis," Journal of Monetary Economics, Elsevier, vol. 55(2), pages 234-250, March.
  21. Galor, Oded & Mountford, Andrew, 2008. "Trading Population for Productivity: Theory and Evidence," CEPR Discussion Papers 6678, C.E.P.R. Discussion Papers.
  22. Ranis, Gustav, 1988. "Analytics of development: Dualism," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 4, pages 73-92 Elsevier.
  23. Eswaran, Mukesh & Kotwal, Ashok, 1985. "A Theory of Contractual Structure in Agriculture," American Economic Review, American Economic Association, vol. 75(3), pages 352-67, June.
  24. Laitner, John, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Wiley Blackwell, vol. 67(3), pages 545-61, July.
  25. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  26. Rosenzweig, Mark R., 1988. "Labor markets in low-income countries," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 15, pages 713-762 Elsevier.
  27. Jacob L. Weisdorf, 2004. "From Domestic Manufacture to Industrial Revolution: Long-Run Growth and Agrucultural Development," Discussion Papers 04-06, University of Copenhagen. Department of Economics.
  28. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
  29. Kremer, Michael, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 681-716, August.
  30. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
  31. Bertrand, Trent J & Squire, Lyn, 1980. "The Relevance of the Dual Economy Model: A Case Study of Thailand," Oxford Economic Papers, Oxford University Press, vol. 32(3), pages 480-511, November.
  32. Proto, Eugenio, 2007. "Land and the transition from a dual to a modern economy," Journal of Development Economics, Elsevier, vol. 83(1), pages 88-108, May.
  33. Areendam Chanda & Carl-Johan Dalgaard, 2008. "Dual Economies and International Total Factor Productivity Differences: Channelling the Impact from Institutions, Trade, and Geography," Economica, London School of Economics and Political Science, vol. 75(300), pages 629-661, November.
  34. Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442, June.
  35. Stephen L. Parente & Richard Rogerson & Randall Wright, 2000. "Homework in Development Economics: Household Production and the Wealth of Nations," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 680-687, August.
  36. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March.
  37. Banerjee, Abhijit V. & Duflo, Esther, 2005. "Growth Theory through the Lens of Development Economics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 7, pages 473-552 Elsevier.
  38. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  39. Juan Carlos Cordoba & Marla Ripoll, 2004. "Development Accounting," 2004 Meeting Papers 325, Society for Economic Dynamics.
  40. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
  41. James A. Roumasset, 1993. "The Nature of the Agricultural Firm," Working Papers 199317, University of Hawaii at Manoa, Department of Economics.
  42. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hou:wpaper:2008-03. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dietrich Vollrath)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.