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On the Organization of Rural Markets and the Process of Economic Development

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  • Drazen, Allan
  • Eckstein, Zvi

Abstract

The authors consider how the organization of rural markets will affect capital accumul ation and long-run aggregate income in the development process. They show that in a simple, dual economy, overlapping-generations model, c apital accumulation and aggregate income will be lowest when both fac tor markets in the agricultural sector are fully competitive. Both ca pital and aggregate income will be higher when land is not traded but the labor market is competitive, and highest in the absence of compe titive markets in both factors in the agricultural sector, when incom e distribution favors rural workers over landlords. Copyright 1988 by American Economic Association.

Suggested Citation

  • Drazen, Allan & Eckstein, Zvi, 1988. "On the Organization of Rural Markets and the Process of Economic Development," American Economic Review, American Economic Association, vol. 78(3), pages 431-443, June.
    • Handle: RePEc:aea:aecrev:v:78:y:1988:i:3:p:431-43
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    1. Jonathan Eaton, 1987. "A Dynamic Specific-Factors Model of International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(2), pages 325-338.
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