Photo by SKopp – Own work, Government of Saint Lucia, Public Domain
2015 marks the 100th anniversary of Sir William Arthur Lewis’ birth. Who was Arthur Lewis? He was a Saint Lucian born economist who in 1979 won the only Nobel Prize in Economics by a native Caribbean for his contributions in the field of economic development. In his most influential publication entitled “Economic Development with Unlimited Supplies of Labour”, Sir Arthur Lewis introduced the Dual Sector Model commonly known as the “Lewis Model”. In this model, when an economy first becomes industrialized it grows very fast by importing foreign technology and employing capital and plentiful, cheap, unskilled labor from the farm. But after a while the extra agricultural labor is put to work and wages start to rise. This makes firms less profitable and they have to come up with their own technology to keep growing. This shift is known as the Lewis Turning Point.
The “Lewis Model” has been useful in explaining the growth paths observed within “the Asian economic miracle”. As highlighted by Prof. Paul Krugman (winner of the 2008 Nobel Memorial Prize in Economics), the once impressive growth of economies like Hong Kong, Singapore, Taiwan and South Korea resulted from a mobilization of resources consistent with the Lewis Model. In an initial stage, they took foreign technology and used cheap labor and capital. Eventually they ran out of cheap labor and reached a point of diminishing returns to adding more capital, and growth slowed. Though living standards are much higher than they were before, these countries will no longer grow as fast. More recently, the “Lewis Model” has regained relevance in relation to China’s economy as research from the International Monetary Fund estimates that if things stay as they are, China will reach the Lewis Turning Point between 2020 and 2025.
In honor of such a prominent Caribbean Economist, the Caribbean Country Department at the Inter-American Development Bank, the International Economic Association, and the Research Institute for Development, Growth and Economics will launch a roundtable entitled “Arthur Lewis – 100th Anniversary”. The event will take place at the Centro de Formación of the Spanish Agency for International Development Cooperation (AECID) in Santa Cruz (Bolivia), October 14, 2015 prior to the annual meeting of the Latin-American and the Caribbean Economic Association (LACEA). In the roundtable, Prof. Mark Figueroa (University of the West Indies) and Luis Bertola (Universidad de la República) will discuss Sir Arthur Lewis’ historical perspectives and legacy. Professors Damien King and Andre Haughton from the University of the West Indies will discuss development issues in the Caribbean with special emphasis on growth and debt. Prof. Rafael di Tella (Harvard University) will speak about state capacity and beliefs. Prof. Hugo Hopenhayn (UCLA) will discuss issues on resource misallocation and firm level productivity. The roundtable will be closed by Prof. Benjamin Olken (MIT) and Prof. Michael Kremer (Harvard University) who will discuss new perspectives in development economics.
Please join us in person or via LiveStream in this path breaking event!!
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