Structural change and inter-sectoral mobility in a two-sector economy. (October 2015)

• Record Type: Journal Article
• Authors: Antoci, Angelo; Galeotti, Marcello; Iannucci, Gianluca; Russu, Paolo
• Is Part Of: Chaos, solitons and fractals. Volume 79(2015)
• Page Start: 18
• Page End: 29
• Publication Date: 2015-10
• Subjects: Structural change -- Environmental externalities -- Two-sector growth model; Chaotic behavior in systems -- Periodicals; Solitons -- Periodicals; Fractals -- Periodicals; Chaotic behavior in systems; Fractals; Solitons; Periodicals; 003.7
• DOI: 10.1016/j.chaos.2015.05.015
• Languages: English
• ISSNs: 0960-0779

Abstract

Abstract: This paper studies the dynamics of a two-sector economy (with a natural resource-dependent sector and an industrial sector ) characterized by free inter-sectoral labor mobility and heterogeneity of agents ( workers and entrepreneurs ). In such a context, we analyze the effects of the deterioration of natural resources, caused by the production activity of both sectors, on inter-sectoral movements of the labor force ( structural changes ), on ecological dynamics and on the revenues of workers and entrepreneurs. As in the seminal work by Matsuyama (1992), we obtain that a low productivity of labor in the resource-dependent sector can fuel the industrialization process. However, differently from Matsuyama, in our model the industrialization process may give rise to a reduction in workers' revenues if the contribution to environmental depletion of the industrial sector, per unit of product, is higher than that of the resource-dependent one.