Advertisement

Overview

  • Sibabrata Das
  • Alex Mourmouras
  • Peter Rangazas
Chapter
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

We begin with a single, relatively simple, theoretical framework that augments the Solow model to include endogenous theories of saving, fertility, human capital, and policy formation. The analysis is then extended to include two sectors of production. We study the structural transformation of developing economies as they shift from traditional production in largely rural areas to modern production in largely urban areas during the early take-off period of modern growth. The two-sector growth model is used to explain the commonly observed differences in saving, worker productivity, and fertility across rural and urban sectors. We examine the effects of policies that reallocate resources across these sectors, such as taxation, migration restrictions, international trade, and an urban bias in the provision of public services. How policies affect the pace of the structural transformation is a critical feature of development as it plays an important causal role in determining an economy’s aggregate growth rate.

References

  1. Aghion P, Howitt P (2008) The economics of growth. Boston: MIT Press.Google Scholar
  2. Banerjee A, Duflo E (2011) Poor economics. Public Affairs, New York.Google Scholar
  3. Carter S, Ransom R, Sutch R (2003) Family matters: The life-cycle transition and the unparalleled fertility decline in antebellum America. In: Guinnane, T Sundstrom W, Whately W (eds) History matters: Essays on economic growth, technology, and demographic change. Stanford University Press, Stanford, California.Google Scholar
  4. Cordoba J, Ripoll M (2006) Agriculture, aggregation, wage caps, and cross-country income differences. Working paper 246, University of Pittsburgh Department of Economics.Google Scholar
  5. Diamond P (1965) National debt in a neoclassical growth model. American economic review 55(5):1126–1150.Google Scholar
  6. Doepke M (2004) Accounting for fertility decline during the transition to growth. Journal of economic growth 9(3):347–383.CrossRefGoogle Scholar
  7. Drazen A, Eckstein Z (1988) On the organization of rural markets and the process of development. American economic review 78(3):431–43.Google Scholar
  8. Eaton J (1987) A dynamic specific factors model of international trade. Review of Economic Studies 54:325–338.CrossRefGoogle Scholar
  9. Galor O (2005) From stagnation to growth: Unified growth theory. In: Aghion P, Durlauf S (eds) Handbook of economic growth. Amsterdam, North Holland.Google Scholar
  10. Galor O (2011) Unified growth theory. Princeton University Press, Princeton, New Jersey.Google Scholar
  11. Galor O, Moav O, Vollrath D (2009) Inequality in land ownership, the emergence of human capital promoting institutions, and the great divergence. Review of economic studies 76(1):143–179.CrossRefGoogle Scholar
  12. Galor O, Weil D (1996) The gender gap, fertility, and growth. American economic review 86: 374–387.Google Scholar
  13. Galor O, Weil D (2000) Population, technology, and growth: From Malthusian stagnation to modern economic growth. American economic review 90(4):806–828.CrossRefGoogle Scholar
  14. Gollin D, Lagakos D, Waugh M (2014) The agricultural productivity gap. Quarterly journal of economics 129(2):939–993.CrossRefGoogle Scholar
  15. Gollin D, Parente S, Rogerson R (2002) The role of agriculture in development. American economic review 92(2:160–164.CrossRefGoogle Scholar
  16. Gollin D, Parente S, Rogerson R (2004) Farmwork, homework, and international income differences. Review of economic dynamics 7(4):827–50.CrossRefGoogle Scholar
  17. Greenwood J, Seshadri A (2002) The US demographic transition. American economic review. 92(2):153–59.CrossRefGoogle Scholar
  18. Henderson V (2010) Cities and development. J Reg Sci 50(1):515–540.Google Scholar
  19. Jones, C and Vollrath, D (2013) Introduction to economic growth, New York: W.W. Norton.Google Scholar
  20. Lewis A (1954) Development with unlimited supplies of labor. The Manchester School 22:139–92.CrossRefGoogle Scholar
  21. Lucas, R (2002) Lectures on economic growth. Cambridge, MA: Harvard University Press.Google Scholar
  22. Mourmouras A, Rangazas P (2009a) Reconciling Kuznets and Habbakuk in a unified growth model. Journal of economic growth 14(2):149–181.CrossRefGoogle Scholar
  23. Mourmouras A, Rangazas P (2009b) Fiscal policy and economic development. Macroeconomic dynamics 13(4):450–476.CrossRefGoogle Scholar
  24. Mourmouras A, Rangazas P (2013) Efficient urban bias. Journal of economic geography 13(3):451–471.CrossRefGoogle Scholar
  25. Ranis G, Fei J (1961) A theory of economic development. American economic review 51(4):533–565.Google Scholar
  26. Schultz T (1964) Transforming traditional agriculture. New Haven: Yale University Press.Google Scholar
  27. Vollrath D (2009) How important are dual economy effects for aggregate productivity? Journal of development economics 88(2):325–334.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Sibabrata Das
    • 1
  • Alex Mourmouras
    • 2
  • Peter Rangazas
    • 3
  1. 1.Strategy, Policy & Review DepartmentInternational Monetary FundWashington, DCUSA
  2. 2.International Monetary FundWashington, DCUSA
  3. 3.Department of EconomicsIndiana University-Purdue UniversityIndianapolisUSA

Personalised recommendations