Industrialization and technological progress with many countries under a non-homothetic preference.

Keita, Kamei (2011): Industrialization and technological progress with many countries under a non-homothetic preference.

Abstract

This paper examines industrialization in each country by using a model with a continuum of countries. Our model is mainly based on Yanagawa’s (1996) model. However, unlike Yanagawa’s model, our model adopts the Stone-Geary utility function of a non-homothetic preference. The main results are as follows. First, we find that an increase in agricultural productivity leads to industrialization under the nonhomothetic preference, whereas it leads to deindustrialization under the homothetic preference. Second, the widening disparity of manufacturing productivity among countries leads to an increase in the number of agricultural countries in the world, even if it is under the non-homothetic preference.

• Item Type: MPRA Paper
• Language: English
• Keywords: Industrialization, multi-countries, Stone-Geary utility function
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology

References

[1] Dornbush, R., S. Fischer, and P. Samuelson (1977), “Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods,” American Economic Review, 67 (5), pp. 823.839.

[2] Kongsamut, P., S. Rebelo, and D. Xie (2001), “Beyond Balanced Growth,” Review of Economic Studies, 68 (4), pp. 869.882.

[3] Matsuyama, K. (1992), “Agricultural Productivity, Comparative Advantage, and Economic Growth,” Journal of Economic Theory, 58 (2), pp. 317.334.

[4] Spilimbergo, A. (2000), “Growth and Trade: The North Can Lose,” Journal of Economic Growth, 5 (2), pp. 131.146.

[5] Yanagawa, N. (1996), “Economic Development in aWorld with Many Countries,” Journal of Development Economics, 49 (2), pp. 271.288.