The paper develops a two-sector model of economic growth, using agriculture and industry. The distinguishing feature in this analysis is that land is an essential input in the agricultural sector, but it is also used in the production process of industrial sector, which is assumed to be...

The empirical evidence on trade reforms suggests that these have a surprisingly small impact on the country's industrial configuration. This industrial structure inertia is difficult to rationalize in standard trade models. This paper develops a two-sector industry dynamics model in which...

We document empirical regularities of disaggregated inflation and consumption and study whether multisectoral New Keynesian models can explain them. We focus on higher moments of the inflation and consumption growth distributions as well as on the contemporaneous comovement of these two...

The fact that consumption and investment goods are perfect substitutes in discounted stochastic optimal growth theory, as represented by a one-sector neoclassical model, results in a smooth production-possibility-frontier (PPF) for which first-order Ramsey-Euler conditions can be fully...

Purpose This paper studies the political economy of the endogenous urban-rural divide in two dimensions: labor market and provision of public goods. Design/methodology/approach This paper gives a dual-sector model endogenously depending on the consumption of public goods (club goods), the number...