ABSTRACT
This chapter considers an interesting model of the primary sector in an underdeveloped economy put forward by Bent Hansen. Hansen's model is of a primary producing economy with a dualistic structure. He envisages a limited quantity of specially fertile or productive land that is owned by a privileged group of colonial settlers. The chapter explains a dynamic Ricardian model of primary exports and the manufacturing sector. It incorporates capital into production in the primary sector, and dynamises the analysis in Ricardian fashion by linking capital accumulation to profits and income distribution. The objective is to construct the time path of a stylised economy that begins as a typical monocultural primary exporter. The chapter explores a simple diagrammatic model of resource-based industrialisation in an open economy. It deals with a two-sector economy but instead of two final goods, it considers one raw material and one final good, both of which can be traded on world markets at a fixed relative price.
