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Reconciling Kuznets and Habbakuk in a Unified Growth Theory

Author

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  • Alex Mourmouras
  • Peter Rangazad

    () (Department of Economics, Indiana Unviersity-Purdue University Indianapolis)

Abstract

Economic historians have debated the relative labor productivity of the United States agricultural sector during the 19th century. David (2005) offers a reconciliation of the opposing views by suggesting that while productivity per hour worked in agriculture was high, the number of hours worked per year was low. We model and extend a version of Davis’s reconciliation within a unified growth theory that connections the structural transformation away from traditional agriculture to several other features of United States development. Similar to David, our model predicts an almost two-fold annual workerproductivity advantage in the modern (industrial) sector of the economy, entirely due to greater hours worked per year. The dynamic general equilibrium model is consistent with the structural transformation having minor direct and indirect effects on aggregate labor productivity per hour, but substantial effects on aggregate labor productivity per worker. The model also provides a reasonable match to the trends in schooling, fertility, rates of return to physical capital, and labor productivity growth over the two centuries.

Suggested Citation

  • Alex Mourmouras & Peter Rangazad, 2007. "Reconciling Kuznets and Habbakuk in a Unified Growth Theory," Working Papers wp200704, Indiana University-Purdue University Indianapolis, Department of Economics.
  • Handle: RePEc:iup:wpaper:wp200704
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    Cited by:

    1. Galor, Oded, 2009. "2008 Lawrence R. Klein Lecture -- Comparative Economic Development: Insights from Unified Growth Theory," CEPR Discussion Papers 7519, C.E.P.R. Discussion Papers.
    2. 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.
    3. Dietrich Vollrath, 2013. "Measuring Aggregate Agricultural Labor Effort in Dual Economies," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 39-58, June.
    4. Salam Abdus & Peter Rangazas, 2011. "Adult Nutrition and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 636-649, October.
    5. Victor Court & Emmanuel Bovari, 2018. "Energy, knowledge, and demo-economic development in the long run: a unified growth model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01698755, HAL.
    6. Markus Eberhardt & Dietrich Vollrath, 2014. "Agricultural Technology and Structural Change," CSAE Working Paper Series 2014-21, Centre for the Study of African Economies, University of Oxford.
    7. Peter Rangazas, 2013. "Introduction: The Dual Economy Approach to Economic Growth and Development," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 1-7, June.
    8. Ho, Chi Pui, 2016. "GeoPopulation-Institution Hypothesis: Reconciling American Development Process and Reversal of Fortune within a Unified Growth Framework," MPRA Paper 73863, University Library of Munich, Germany.

    More about this item

    Keywords

    Wage Gaps; Human Capital; Fertility;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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