Industrialization Flashcards
According to Cypher and Dietz, what does industrialization require?
new technological processes, more skilled and productive labour force and the expansion of physical capital investment at the enterprise level and in the economy as a whole (including social infrastructure)
Which sector shrinks with economic growth?
Agricultural and primary sectors
What is the relationship between the share of the labour force in agriculture and the level of per capita income?
The higher the level of development, the smaller the share of the labour force engaged in agriculture
What is Lewis’ argument about the structural evolution that shifts labour from agriculture to industry?
If there is a surplus in agriculture, the it is possible for a more productive and higher-wage industrial sector to attract labour from the countryside without a decrease in agricultural prodection
What is import substitution industrialization (ISI)?
The establishment of firms within the local economy which can produce for local consumption some or all of the manufactured goods currently being imported
Which commodities are likely to be produced when initiating ISI?
Non-durable customer goods e.g. clothing beverages and furniture
What is the first stage of ISI, when the focus is on producing for the domestic market simple consumer non-durable goods called?
easy, primary or horizontal ISI
What are the benefits of the easy ISI stage?
Increasing employment opportunities, especially for those that shifted from agriculture to industry, by the pull of higher wages in ISI sector and push of more intensive, labour-saving methods in agriculture
How can you measure the success of the easy ISI stage?
Successful ISI shifts a country’s production possibilities frontier (PPF) outward both along the agricultural axis and along the manufactured goods axis
