EC207 Lecture Notes - Lecture 8: Demographic Transition, Human Capital, Production Function
Document Summary
Chapter 3: the classic model of economic development. In the manufacturing sector, the labour market has downward sloping labour demand and a constant supply of labour. As workers are shifted from the agriculture sector to manufacturing sector and profits are reinvested. The production function in the manufacturing sector shifts upward (more capital and labour) and able to produce more output. This process continues until all surplus workers are transferred to the modern sector. Developed by hollis b chenery and his colleagues. Takes an empirical approach to study economic development. It focuses on sequential process through which economic structures transform over time. Empasize on both domestic and international constraints of development. Idenftifies certain patterns that occur in all countries doing the process of economic development. The pace and patterns can vary according to international and domestic factors, many of which lie beyond the control of individual countries. These patterns can be influenced by government policies.
