The Partition of Production between Households and Markets

Christopher Colburn and Haiwen Zhou

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Household production; economic development; structural change; technology choice; increasing returns (search for similar items in EconPapers)
JEL-codes: F12 L13 O14 (search for similar items in EconPapers)
Date: 2021-04-12
New Economics Papers: this item is included in nep-cwa and nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:107158

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