The Dual Economy in Long-run Development

Dietrich Vollrath

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a dynamic model of the dual economy in which 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 a unified growth framework. It is also shown that agricultural productivity growth will exacerbate the inefficiencies of a dual economy and slow down long-run growth.

Keywords: Dual economy; unified growth; endogenous fertility (search for similar items in EconPapers)
JEL-codes: O11 O13 O17 O41 Q10 (search for similar items in EconPapers)
Date: 2008-12-18
New Economics Papers: this item is included in nep-dev
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Journal Article: The dual economy in long-run development (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:12293

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