Industrialization And Technological Progress With Many Countries Under A Non-homothetic Preference
This paper examines industrialization in each country by using a model with a continuum of countries. The model is mainly based on Yanagawa's (1996) model. However, unlike Yanagawa's model, the model adopts the Stone-Geary utility function of a non-homothetic preference. The main results are as follows. First, the authors find that an increase in agricultural productivity leads to industrialization under the non-homothetic preference, whereas it leads to deindustrialization under the homothetic preference. Second, the widening disparity of manufacturing productivity among countries leads to an increase in the number of agricultural countries in the world, even if it is under the non-homothetic preference.