The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Two-Sector Models

  • H. Uzawa
Reference work entry


Problems of interest in economic theory, from both the theoretical and policy points of view, occur only when there exists a multitude of goods and services, each of which is either produced by different technologies or utilized for different purposes in consumption. However, it is often the case that an economic system with a multitude of goods and services is too complicated to analyse effectively and to derive conclusions of any practical use. two-sector models enable us to bring forth essential elements of the economic mechanisms in a more complicated real world while still making it possible to analyse graphically the basic structure of equilibrium and to understand the policy implications within the framework of the two-sector analysis. The two-sector analysis plays a particularly important role in trade theory and in growth theory.


Marginal rate of substitution Rybczynski theorem Two-sector models 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • H. Uzawa
    • 1
  1. 1.