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The Partition of Production between Households and Markets

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  • Colburn, Christopher
  • Zhou, Haiwen

Abstract

The process of industrialization was accompanied by the switch from household production to firm production. The industrialization process was also a process of population growth, the appearance of general-purpose technologies, and the expansion of international trade. This paper studies the partition of production between households and firms in an analytically tractable general equilibrium model with a continuum of goods. We show that population growth, development of general-purpose technologies, and the opening of international trade increase the percentage of goods produced by firms. However, with the appearance of a technology biased toward home production, the percentage of goods produced by households can increase.

Suggested Citation

  • Colburn, Christopher & Zhou, Haiwen, 2021. "The Partition of Production between Households and Markets," MPRA Paper 107158, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107158
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    More about this item

    Keywords

    Household production; economic development; structural change; technology choice; increasing returns;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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