[OPE-L:3255] one-sector models

Gerald Lev (glevy@pratt.edu)
Thu, 3 Oct 1996 10:39:38 -0700 (PDT)

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A word or two (more) in opposition to one-sector models. Duncan wrote
in [OPE-L:3251]:

> 1) Analytically 1-sector models are a special case of the general model, so
> they are a legitimate place to start thinking about the properties of the
> general model. Conjectures that are false in the one-sector model are
> surely false in general, for example.

I don't see this point. Is it the case that 1-sector models are a special
case of a general (multi-sectoral) model? I don't think that is
necessarily the case and it depends on *what* one is modelling and what
the level of abstraction is.

> 2) Empirically we depend a lot on national income data, which is most
> easily interpretable in terms of a one-sector model. There is a tremendous
> amount to be learned from comparative growth data at the aggregated level
> (for example about the gross patterns of technical change, which links up
> with the FRP.)

(Pace Andrew T), I don't think we can let our desire to find
empirically-useful measures drive our analytical considerations in terms
of the appropriateness of different theoretical models.

> 3) If the structure of production in different sectors (that is the
> proportions in the input-output table) are not very different, the
> one-sector model is a good approximation. To put this another way, you
> could consider an economy with lots of different commodities, but if they
> were all produced with the same input proportions, the economy would behave
> like a 1-sector economy anyway.

Why should we assume that this is the case empirically?

> 4) Pedagogically it is almost impossible to start with a multi-sector
> model, and most students aren't going to make the mathematical investment
> required to grasp multi-sector models completely, so it is helpful for us
> to have a very clear understanding of the 1-sector model.

We can't allow the desire for "pedagogically" simple models to take
precedence over developing theoretical models that are inherently more
complex but better mirror the subject under investigation.

In Solidarity,