A Model of Crisis in a Peasant Economy

Pat McGregor

Oxford Economic Papers, 1990, vol. 42, issue 4, 793-811

Abstract: The principal asset of many poor peasants is their labor power. Despite a basic level of development, a rural economy can experience famine alongside a competitive labor market. The model constructed to explain this distinguishes peasants by the level of their endowment. A peasant with insufficient resources to survive in isolation will accept a wage rate that will leave him destitute, but alive, at the end of the agricultural year. A poorer peasant will be unable to match such a wage offer, having less assets to realize. Thus, the poorest strata are left unemployed and starving despite the labor market clearing. Copyright 1990 by Royal Economic Society.

Date: 1990
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