By Dr. Thorsten Wichmann (auth.)
A two-sector version of a constructing state such as agriculture and is gifted. development and structural swap are mentioned in editions with exogenous in addition to endogenous technical growth, algebraically and by way of numerical simulations. outcomes from bearing in mind peculiarities of nutrition construction and intake are analyzed. those comprise know-how adoption in agriculture, Engel's legislations and a dating among the extent of foodstuff and productivity.
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Additional resources for Agricultural Technical Progress and the Development of a Dual Economy
Both are also highlighted by the endogenous growth literature. Schultz (1988,345) emphasizes increasing returns to technology on the micro level: "It is helpful to think of each increasing returns occurrence as an economic event. " To him increasing returns from technology adoption are internal, they occur only in the moment of adoption. The new technique, when adopted, is again subject to diminishing returns. However, increasing returns in agriculture are not confined to the micro level as presumed by Schultz.
Land is of (almost) no importance. Output in this sector is produced by labor and capital under (usually) constant returns. Thus, capital accumulation to overcome diminishing returns to labor only takes place in manufacturing. These asymmetries describe the core of dual economy models. Additional assumptions about production in both sectors are made which, however, vary from model to model. For example, it is often assumed that labor is paid its average product in agriculture but its marginal product in industry.
6 As usual the output can be either consumed or invested. 2) . I-a a K = MK «I-n)L) -LcM where eM denotes per-capita consumption of widgets. As in the agricultural sector the state of technology in manufacturing. l. Note that the output elasticity of labor is the same in both sectors. This assumption is not crucial for most of the results obtained below but simplifies the analysis. 4. This might seem a strong assumption if agriculture is equated with rural areas and manufacturing with urban areas.
Agricultural Technical Progress and the Development of a Dual Economy by Dr. Thorsten Wichmann (auth.)