 Unified growth based on the specific factors modelVolker Caspari and Klaus Pertz No 193, Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics Abstract: The two-sector specific factor model is typically used in the theory of international trade where it helps to clarify the principle of comparative advantage. Instead, we use this model as explicit theoretical framework to explain major trends of long-run economic development. Combined with endogenous technical progress functions which assume that knowledge accumulates as a by-product of agricultural and manufacturing experience, the two-sector specific factors model can explain major historical trends and structural turnarounds. The technical progress functions establish the link between the agricultural and the manufacturing sector through the land-labour ratio, which is determined by the savings propensities of wage-earners, landlords and capitalists. This result is achieved by making use of the traditional investment = savings condition, without reference to complicated micro-based models of human capital accumulation. Keywords: Economic development; growth; Industrial Revolution; income distribution (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:zbw:darddp:dar_35697 Access Statistics for this paper More papers in Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics Contact information at EDIRC. |
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