DUAL ECONOMY MODELS: RETROSPECT AND PROSPECT

ABSTRACT The paper surveys recent work on dual economy models starting from the famous 1961 Jorgenson paper and ending with some of the new contributions to the literature on North‐South trade which have the same analytical structure as the dual economy model. Various models are compared with respect to assumptions about asymmetries, speeds of adjustment and factor immobilities. Two important conclusions are noted: dynamic behaviour is often quite sensitive to the ranking of adjustment speeds and the direction of further research should be toward further disaggregation.