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THREE ESSAYS on GROWTH and DISTRIBUTION in DUAL ECONOMIES

Abstract
This dissertation is composed of three essays on growth and distribution in dual economies. The first of the essays explores short run implications of the relationship between hierarchical consumption preferences, redistribution, and structural change for the robustness of conclusions from neo-Kaleckian models. Integrating class-based heterogeneity to consumption patterns, inspired by notions of a hierarchy of wants, into a dual-sector model of a semi-industrialized economy generates qualitatively distinct results from those that typically follow from contemporary Kaleckian models, even when retaining the core features of the latter class of models. The results depend on the shock to income distribution emphasized and the specification of pricing. The second essay investigates a puzzle of South Africa’s economy after apartheid: how the extension of democratic franchise was compatible with growing inequality. Testing for theories related to trade openness, ‘financialization’, unemployment, demand conditions, and relative price movements with time series methods, the paper emphasizes the role of the 2000s commodity price boom, an underexplored aspect in the literature on South Africa’s inequality. The third essay, co-authored with Esra Nur Uğurlu, considers limitations to the application of Modern Money Theory (MMT) to underdevelopment problems, considering the long history of development thought emphasizing the relevance of capacity constraints and the consumption-investment trade-off. On the back of these classical development theories, this essay argues that considerably stimulating (government) consumption might be neither desirable nor feasible in contexts where a target for a high share of investment in output is necessitated by structural transformation objectives.
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