ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Labour Demand and High Development Theory

Errol D'Souza The role of economies of scale, an elastic supply of labour and imperfect competition are emphasised as essential elements of development theory by 'high development theory'. Whilst highlighting the role of history and expectations, it also suggests the possibility of industrialisation being unable to create new employment. We argue that this outcome depends on the strength of the increasing returns to scale in dominant firms, vis-a-vis the output elasticities of fringe firms and the elasticity of demand in the industry.

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