A growth model for a two-sector economy with endogenous productivity
نویسنده
چکیده
A growth model is developed for an open dual economy. Th e economy expands due to a higher growth rate of labour productivity in the modern sector through the Kaldor-Verdoorn channel and higher eff ective demand through a Keynesian channel. Th e model incorporates a retardation mechanism aff ecting the slopes of productivity and output growth schedules as labour surplus and economies of scale diminish. A wage or profi t-led regime and initial conditions may give rise to: de-industrialization in terms of both output and employment; a growth trap sustaining a situation of structural heterogeneity; or sustainable employment and adequate output and productivity growth. JEL Classifi cation: O11; O41; O47
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