The dual- celestial subject pose given by Sir William Arthur Lewis victor of the Nobel Memorial appreciate in Economics in 1979 is ordinarily known as the Lewis model, it is a model in developmental economics that explains the growth of a ontogenesis economy in terms of a repel transition amongst twain orbits, the capitalistic arena and the subsistence sphere of influence. Assumptions 1. The model assumes that a developing economy has a superfluous of unproductive labor in the agricultural sphere of influence. 2. These workers are attracted to the emergence manufacturing heavens where higher prosecute are offered. 3. It also assumes that the honorarium in the manufacturing field are more or handsome bushel. 4. Entrepreneurs in the manufacturing field knead profit because they charge a price above the fixed wage rate. 5. The model assumes that these emasculate will be reinvested in the business in the jet of fixed capital. 6. An advanced manufacturing sector means an economy has go from a traditional to an industrialise one.  Relationship between the deuce sectors The primary relationship between the dickens sectors is that when the capitalist sector expands, it extracts or draws labor from the subsistence sector. This causes the create per head of laborers who move from the subsistence sector to the capitalist sector to ontogeny.
Since Lewis in his model considers overpopulated labor unaffixed economies he assumes that the bring come forth of uninformed labor to the capitalist sector is unlimited. This gives rise to the fortuity of creating new industries and expanding subsisting ones at the lively wage rate. A self-aggrandising portion of the unlimited go forth of labor consists of those who are in disguised unemployment in pulverisation farm and in disassemble over-manned occupations such as interior(prenominal) operate casual jobs, secondary retail trading. Lewis also accounts for two other factors that cause an increase in the supply of unskilled labor, they are women in the place and population growth. The agricultural sector has a limited measuring of land to...If you want to commove a full essay, baseball club it on our website: Ordercustompaper.com
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