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DUAL ECONOMY MODELS: A PRIMER FOR GROWTH ECONOMISTS
Author(s) -
TEMPLE JONATHAN
Publication year - 2005
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2005.00454.x
Subject(s) - economics , general equilibrium theory , dual (grammatical number) , dual economy , productivity , growth model , growth theory , macroeconomics , total factor productivity , scale (ratio) , returns to scale , production (economics) , economic system , neoclassical economics , physics , art , literature , quantum mechanics
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.