A price endogenous computable planning model for a dual economy

This paper examines the nature of linkages between growth, employment and functional distribution of income in a dual economy. The analysis is carried out in terms of a dual economy general equilibrium model which is implicitly based on a social accounting matrix (SAM) type of information system. The parameter values and the structure of the model are based on Iranian data and the selection of policy packages is inspired by those undertaken in Iran during the 1970s. The model sheds some light on the consequences of the policies by quantifying their potential impact on the sectoral growth of output, levels of employment and functional distribution of income in the rural and urban areas.