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A Two-Sector Growth Model with Endogenous Human Capital and Amenities

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  • Wei-Bin Zhang

    (College of Asia Pacific Management, Ritsumeikan Asia Pacific University)

Abstract

This paper examines issues related to urbanization with labour migration. The main departures from the traditional approaches to dynamics of economic structures are that the paper uses an alternative approach to consumer behaviour and introduces human capital accumulation via learning by doing. The model describes dynamic interactions among agricultural and industrial production, rural and urban amenities, distribution of production factors and preferences with endogenous capital and human capital accumulation. We show that the dynamic system may have either a single or multiple equilibrium points, depending upon returns to scale in the two sectors. We also examined effects of changes in some parameters.

Suggested Citation

  • Wei-Bin Zhang, 2008. "A Two-Sector Growth Model with Endogenous Human Capital and Amenities," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 6(2), pages 95-116.
    • Handle: RePEc:zna:indecs:v:6:y:2008:i:2:p:95-116
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    References listed on IDEAS

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    3. Todaro, Michael P, 1969. "A Model for Labor Migration and Urban Unemployment in Less Developed Countries," American Economic Review, American Economic Association, vol. 59(1), pages 138-148, March.
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    7. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    9. Kanemoto, Yoshitsugu, 1980. "Theories of urban externalities," MPRA Paper 24614, University Library of Munich, Germany.
    10. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
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    16. Gerlagh, Reyer & Keyzer, Michiel A., 2004. "Path-dependence in a Ramsey model with resource amenities and limited regeneration," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1159-1184, March.
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    Cited by:

    1. Wei-bin Zhang, 2011. "Elastic Labour Supply and Home Production in a Monetary Growth Model," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 9(2), pages 87-100.

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    More about this item

    Keywords

    two-sector model; agricultural sector; industrial sector; physical capital accumulation; human capital accumulation; rural and urban amenities;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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