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Unified Growth Based on the Specific Factors Model

Caspari, Volker ; Pertz, Klaus (2009)
Unified Growth Based on the Specific Factors Model.
Report, Primary publication

Abstract

The two-sector specific factor model is typically used in the theory of international trade where it helps to clarify the principle of comparative advantage. Instead, we use this model as explicit theoretical framework to explain major trends of long-run economic development. Combined with endogenous technical progress functions which assume that knowledge accumulates as a by-product of agricultural and manufacturing experience, the two-sector specific factors model can explain major historical trends and structural turnarounds. The technical progress functions establish the link between the agricultural and the manufacturing sector through the land-labour ratio, which is determined by the savings propensities of wage-earners, landlords and capitalists. This result is achieved by making use of the traditional investment = savings condition, without reference to complicated micro-based models of human capital accumulation.

Item Type: Report
Erschienen: 2009
Creators: Caspari, Volker ; Pertz, Klaus
Type of entry: Primary publication
Title: Unified Growth Based on the Specific Factors Model
Language: English
Date: 2009
Place of Publication: Darmstadt
Series: Darmstadt Discussion Papers in Economics
Series Volume: 193
URL / URN: http://tuprints.ulb.tu-darmstadt.de/4733
Abstract:

The two-sector specific factor model is typically used in the theory of international trade where it helps to clarify the principle of comparative advantage. Instead, we use this model as explicit theoretical framework to explain major trends of long-run economic development. Combined with endogenous technical progress functions which assume that knowledge accumulates as a by-product of agricultural and manufacturing experience, the two-sector specific factors model can explain major historical trends and structural turnarounds. The technical progress functions establish the link between the agricultural and the manufacturing sector through the land-labour ratio, which is determined by the savings propensities of wage-earners, landlords and capitalists. This result is achieved by making use of the traditional investment = savings condition, without reference to complicated micro-based models of human capital accumulation.

Uncontrolled Keywords: Economic development, growth, Industrial Revolution, income distribution
URN: urn:nbn:de:tuda-tuprints-47332
Additional Information:

JEL - Classification : E13, N1, O4; Erstellt August 2008

Classification DDC: 300 Social sciences > 330 Economics
Divisions: 01 Department of Law and Economics
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete
01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Economic Theory
Date Deposited: 31 Jan 2016 20:59
Last Modified: 25 Oct 2023 09:54
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