A growth model for a two-sector economy with endogenous productivity
A growth model is developed for an open dual economy. The economy expands due to a higher growth rate of labour productivity in the modern sector through the Kaldor-Verdoorn channel and higher effective demand through a Keynesian channel. The model incorporates a retardation mechanism affecting the slopes of productivity and output growth schedules as labour surplus and economies of scale diminish. A wage or profit-led regime and initial conditions may give rise to: de-industrialization in terms of both output and employment; a growth trap sustaining a situation of structural heterogeneity; or sustainable employment and adequate output and productivity growth.
|Date of creation:||Jul 2007|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.un.org/en/development/desa/working-papers.html|
More information through EDIRC
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.:
- William Easterly & Michael Kremer & Lant Pritchett & Lawrence H. Summers, 1993.
"Good Policy or Good Luck? Country Growth Performance and Temporary Shocks,"
NBER Working Papers
4474, National Bureau of Economic Research, Inc.
- Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
- Lewis, W Arthur, 1980.
"The Slowing Down of the Engine of Growth,"
American Economic Review,
American Economic Association, vol. 70(4), pages 555-64, September.
- Lewis, W Arthur, 1979. "The Dual Economy Revisited," The Manchester School of Economic & Social Studies, University of Manchester, vol. 47(3), pages 211-29, September.
- Pritchett, Lant, 2000. "Understanding Patterns of Economic Growth: Searching for Hills among Plateaus, Mountains, and Plains," World Bank Economic Review, World Bank Group, vol. 14(2), pages 221-50, May.
- Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2-3), pages 208-262, 05.
- John S. L. McCombie, 1983. "Kaldor's Laws in Retrospect," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 5(3), pages 414-429, April.
- Ajit Singh & Sukti Dasgupta, 2005. "Will services be the new engine of economic growth in India?," ESRC Centre for Business Research - Working Papers wp310, ESRC Centre for Business Research.
- Morley, S. & Vos, R., 2004. "Bad luck or wrong policies? : external shocks, domestic adjustment, and the growth slowdown in Latin America and the Carribean," ISS Working Papers - General Series 19156, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
- Amartya K. Sen, 1966. "Peasants and Dualism with or without Surplus Labor," Journal of Political Economy, University of Chicago Press, vol. 74, pages 425.
- Roberto Frenkel & Lance Taylor, 2006. "Real Exchange Rate, Monetary Policy and Employment," Working Papers 19, United Nations, Department of Economics and Social Affairs.
- Krugman, Paul & Taylor, Lance, 1978.
"Contractionary effects of devaluation,"
Journal of International Economics,
Elsevier, vol. 8(3), pages 445-456, August.
- Thirlwall, A P, 1986. "A General Model of Growth and Development on Kaldorian Lines," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 199-219, July.
- Brown, Alan & Deaton, Angus S, 1972. "Surveys in Applied Economics: Models of Consumer Behaviour," Economic Journal, Royal Economic Society, vol. 82(328), pages 1145-1236, December.
- Codrina Rada & Lance Taylor, 2006. "Developing and Transition Economies in the Late 20th Century: Diverging Growth Rates, Economic Structures, and Sources of Demand," Working Papers 34, United Nations, Department of Economics and Social Affairs.
- Charles P. Blitch, 1983. "Allyn Young on Increasing Returns," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 5(3), pages 359-372, April.
- Canning, David J, 1988. "Increasing Returns in Industry and the Role of Agriculture in Growth," Oxford Economic Papers, Oxford University Press, vol. 40(3), pages 463-76, September.
When requesting a correction, please mention this item's handle: RePEc:une:wpaper:44. 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: (Aimee Gao)
If references are entirely missing, you can add them using this form.