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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.
The economic rationale behind this idea of labor reallocation is that of faster economic development. The essence of labor reallocation lies in Engel's Law , which states that the proportion of income being spent on food decreases with increase in the income-level of an individual, even if there is a rise in the actual expenditure on food.
Though the economics guiding which of the two is used to finance the government deficit can get more complicated than what is shown above, the essence of it is that if foreigners' savings pay for the budget deficit, the current account deficit grows. [3]
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.
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
The dual labour market (also referred to as the segmented labour market) theory aims at introducing a broader range of factors into economic research, such as institutional aspects, race and gender. [1] [citation needed] It divides the economy into two parts, called the "primary" and "secondary" sectors. The distinction may also be drawn ...
Labor market segmentation is the division of the labor market according to a principle such as occupation, geography and industry. [1]One type of segmentation is to define groups "with little or no crossover capability", such that members of one segment cannot easily join another segment. [2]
Marx says this leads to the reification (thingification or Verdinglichung) of economic relations, of which commodity fetishism is a prime example. The community of men, or the manifestation of the nature of men, their mutual complementing the result of which is species-life, truly human life—this community is conceived by political economy in ...