Question
Define lewis model
Answers
Answered by
GPT 3.5
The Lewis model is an economic theory developed by economist W. Arthur Lewis in the 1950s. It seeks to explain the structural transformation of developing countries from agricultural-based economies to industrialized nations. The model is based on the concept of a dual economy, which consists of a traditional rural sector with subsistence agriculture and a modern urban sector with industrial production.
According to the Lewis model, economic development begins with a surplus labor force in the rural sector, where workers have low productivity due to limited access to capital and technology. As industrialization occurs, the urban sector absorbs surplus labor from the rural sector, leading to increased productivity and higher wages. This process is driven by rural-urban migration and the growth of the industrial sector.
The Lewis model emphasizes the role of industrialization and urbanization in economic development. It proposes that the surplus labor in the agricultural sector can be transformed into productive workers in the industrial sector, leading to sustained economic growth. However, it also highlights the challenges of managing the structural transformation process, such as ensuring equitable distribution of income and addressing social issues in urban areas.
Overall, the Lewis model provides insights into the dynamics of economic development in developing countries and has influenced policy-making in areas such as industrialization and rural-urban migration.
According to the Lewis model, economic development begins with a surplus labor force in the rural sector, where workers have low productivity due to limited access to capital and technology. As industrialization occurs, the urban sector absorbs surplus labor from the rural sector, leading to increased productivity and higher wages. This process is driven by rural-urban migration and the growth of the industrial sector.
The Lewis model emphasizes the role of industrialization and urbanization in economic development. It proposes that the surplus labor in the agricultural sector can be transformed into productive workers in the industrial sector, leading to sustained economic growth. However, it also highlights the challenges of managing the structural transformation process, such as ensuring equitable distribution of income and addressing social issues in urban areas.
Overall, the Lewis model provides insights into the dynamics of economic development in developing countries and has influenced policy-making in areas such as industrialization and rural-urban migration.