Industrialization and technological progress with many countries under a non-homothetic preference
This paper examines industrialization in each country by using a model with a continuum of countries. Our model is mainly based on Yanagawa’s (1996) model. However, unlike Yanagawa’s model, our model adopts the Stone-Geary utility function of a non-homothetic preference. The main results are as follows. First, we find that an increase in agricultural productivity leads to industrialization under the nonhomothetic preference, whereas it leads to deindustrialization under the homothetic preference. Second, the widening disparity of manufacturing productivity among countries leads to an increase in the number of agricultural countries in the world, even if it is under the non-homothetic preference.
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- Yanagawa, Noriyuki, 1996. "Economic development in a world with many countries," Journal of Development Economics, Elsevier, vol. 49(2), pages 271-288, May.
- Kongsamut, Piyabha & Rebelo, Sérgio & Xie, Danyang, 1997.
"Beyond Balanced Growth,"
CEPR Discussion Papers
1693, C.E.P.R. Discussion Papers.
- Kongsamut, P. & Rebelo, S. & Xie, D., 1997. "Beyong Balanced Growth," RCER Working Papers 438, University of Rochester - Center for Economic Research (RCER).
- Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 1997. "Beyond Balanced Growth," NBER Working Papers 6159, National Bureau of Economic Research, Inc.
- Spilimbergo, Antonio, 2000. " Growth and Trade: The North Can Lose," Journal of Economic Growth, Springer, vol. 5(2), pages 131-46, June.
- Sergio Rebelo & Piyabha Kongsamut & Danyang Xie, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
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