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Abstract

This paper provides a dynamic model of the dual economy inwhich 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 demonstrates how a dual economy will originate, persist, and eventually disappear within aunified growth framework. It is also shown that agriculturalproductivity growth will exacerbate the inefficiencies of a dual economy and slow down long-run growth.



Item Type: MPRA Paper -

Original Title: The Dual Economy in Long-run Development-

Language: English-

Keywords: Dual economy, unified growth, endogenous fertility-

Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic DevelopmentO - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth ModelsO - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional ArrangementsO - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary ProductsQ - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q10 - General-





Author: Vollrath, Dietrich

Source: https://mpra.ub.uni-muenchen.de/12293/







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