Dual Economy Models: A Primer for Growth Economists

44 Pages Posted: 13 Jul 2005

See all articles by Jonathan R.W. Temple

Jonathan R.W. Temple

Centre for Economic Policy Research (CEPR)

Abstract

This paper argues that dual economy models deserve a central place in the analysis of growth in developing countries. The paper shows how these models can be used to analyse the output losses associated with factor misallocation, aggregate growth in the presence of factor market distortions, international differences in sectoral productivity and the potential role of increasing returns to scale. Above all, small-scale general equilibrium models can be used to investigate the interactions between growth and labour markets, to shed new light on the origins of pro-poor and labour-intensive growth, and to explore the role of the informal sector.

Suggested Citation

Temple, Jonathan R.W., Dual Economy Models: A Primer for Growth Economists. Manchester School, Vol. 73, No. 4, pp. 435-478, July 2005. Available at SSRN: https://ssrn.com/abstract=758572

Jonathan R.W. Temple (Contact Author)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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