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Policy Making, Industrial Structure and Economic Growth in a Dual Economy

Author

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  • Li, Xun

Abstract

This paper discusses a new growth mode, a country with a dual economic structure in which each economic sector will receive different government policies such as financial and fiscal policies. Firstly It obtains the economic growth rate and the growth rate of per capita output in the balanced growth path. Secondly it shows how different policy allocations and current industrial structure influence the economic growth. This model also reveals several other factors such as technology progress and population flow which have effect on economic growth. More importantly, two types of "traps" which are often neglected by policymaker are pointed out and given names. They are “Policy Trap” and “Labor-force Flow Trap” which deserve the attentions of policymaker.

Suggested Citation

  • Li, Xun, 2009. "Policy Making, Industrial Structure and Economic Growth in a Dual Economy," MPRA Paper 16990, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:16990
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    File URL: https://mpra.ub.uni-muenchen.de/16990/1/MPRA_paper_16990.pdf
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    References listed on IDEAS

    as
    1. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    2. Lucas, Robert E B & Stark, Oded, 1985. "Motivations to Remit: Evidence from Botswana," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 901-918, October.
    3. Gerhard Glomm, 1992. "A Model of Growth and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 901-922, November.
    4. Bencivenga, Valerie R & Smith, Bruce D, 1997. "Unemployment, Migration, and Growth," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 582-608, June.
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    More about this item

    Keywords

    economic growth Policy Trap Labor-force Flow Trap industrial structure;

    JEL classification:

    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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