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What is the Lewis Model?
The Lewis Model argues economic growth needs structural change into the economy whereby surplus labour within traditional agricultural sector along with zero marginal product that migrate to the modern industrial sector where their each marginal product is more much higher.
Transferring surplus labour through rural to urban regions has no effect onto agricultural productivity like MP of rural employees = 0. Additional workers within urban areas raise output thus incomes and profits. Further incomes increase demand for domestic products when increased profits fund increased investment. Therefore rural urban migration gives self generating growth.
What are the predictions of dependency theory? The predictions of dependency theory: • DCs exploit LDCs (Less Developed Countries) by extracting their surplus value. Surplu
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What are the assumptions of dependency theory? The assumptions of dependency theory: Dependency theory extends Marx is theory of surplus value to international relationship
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