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al sector is characterized by surplus labor, refer to Athukorala et al. (2009) and Minami and Ma (2009, 2010) (2) When workers move from the primary sector to the manufacturing sector as the economy develops, they need to cope with higher living costs and the risk of unemployment in the modern sector. In a country like China, where, because of the family registration system, unskilled workers from rural areas face various forms of disadvantages, such as discriminatory treatment in education for their children, the costs of moving from the primary sector to the manufacturing sector are likely to be particularly high. To take this aspect into consideration, let us assume that the wage rate in the manufacturing sector needs to be (1 + δ) times as high as that in the primary sector for workers to work in the manufacturing sector. Further, with regard to the service sector, two alternative assumptions are possible: we could either assume that workers are farmers that are engaged in by-employments or work in small towns where they can find sufficient work to make ends meet; or we could assume that people engaged in the service sector work in large cities, where they face the same high costs as workers in the manufacturing sector. In the analysis below, we make the former assumption, which implies that workers move between the primary sector and service sector at the same wage rate. However, even if we were to assume that workers in the service sector need (1 + δ) times the wage rate in the primary sector, the results below remain essentially unchanged. Thus, in the analysis that follows, it is assumed that as a result of the inter-sectoral movement of labor, the wage rates in the primary, service, and manufacturing sectors are w, w, and (1 + δ) w, respectively. Next, let us consider the conditions for market equilibrium. First, we examine a situation in which, because of a relatively high wage rate in the primary sector, not condition

 

In China, domestic saving far exceeds domestic investment and the country is recording huge net exports of goods and services. To model this situation, we express the ratio of domestic absorption to GDP by 1 – η, where η is net exports of goods and services divided by GDP. Some developing countries export a great deal of services, including tourism. For the sake of simplicity, however, we assume that services are non-tradable and that if η increases, demand for domestic services declines. Nominal demand for services is expressed as γS (1 – η) Y. For goods market equilibrium, the following equality needs to hold: (6) We assume that the quantity of labor in the entire economy, N, is given in the short run. In a non-Lewisian situation, where condition (3) holds, labor input in each sector, NA, NS, and NM, and the wage rate w are determined by equilibrium conditions (4), (5), and (6), where K (capital), ΩM (manufacturing sector TFP), and N (workforce in the entire economy) are given in the short run. If the economy is in a Lewisian situation, where condition (1) holds, the wage rate is determined as follows: (10) In both sets of equilibrium conditions (the non-Lewisian case and the Lewisian case), there is no guarantee that domestic supply in the primary and manufacturing sectors is equal to domestic demand. The difference is adjusted through exports and imports. Finally, real GDP per worker is determined by the following equation, regardless of whether the economy is in a Lewi本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。