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The Dual Sector model, or the Lewis model, is a model in developmental economics that explains the growth of a developing economy in terms of a labour transition between two sectors, the subsistence or traditional agricultural sector and the capitalist or modern industrial sector.
A dual economy is the existence of two separate economic sectors within one country, divided by different levels of development, technology, and different patterns of demand. The concept was originally created by Julius Herman Boeke to describe the coexistence of modern and traditional economic sectors in a colonial economy.
Depiction of Phase1, Phase2 and Phase3 of the dual economy model using average output. One of the biggest drawbacks of the Lewis model was the undermining of the role of agriculture in boosting the growth of the industrial sector.
There is a low degree of mechanisation coupled with rain dependence. So while a large proportion of the population (70–80%) may be actively employed in the agriculture sector, the contribution to the Gross Domestic Product may be as low as 40%. [7] This points to the need to increase output per unit input and output per head.
Agricultural productivity decreases, lowering marginal productivity and wages in the agricultural sector (w A), decreasing the expected rural income. However, even though this migration creates unemployment and induces informal sector growth, this behavior is economically rational and utility-maximizing in the context of the Harris–Todaro model.
Lewis model may refer to: William Arthur Lewis's model of economic development i.e. the dual-sector model; Richard D. Lewis's Lewis Model of Cross-Cultural Communication; Lewis acids and bases, a model proposed by Gilbert N. Lewis; John Lewis Partnership, a British public limited company owned by a trust on behalf of its employees
The company’s Western Distribution Center headquarters is a $70 million, 631,465 square-foot building that sits on 45 acres of previously owned city land on Grant Line Road. It officially opened ...
Davis and Goldberg favored corporate-driven agriculture or large-scale farming to revolutionize the agriculture sector, lessening the dependency on state power and politics. [9] They explained in the book that vertically integrated firms within the agricultural value chains have the ability to control prices and where they are distributed. [9]