ECONOMIC-DEVELOPMENT IN A WORLD WITH MANY COUNTRIES

This paper examines economic development and growth within a model of a continuum of countries. We can show the industrialization process of less developed countries endogenously. The necessary conditions for i ndustrialization depend on the relative position of the country in the world economy. Hence, not only the domestic conditions, but also the performances of other countries are important for industrialization. B y using this result, we also consider the relation between agricultura l productivity and industrialization. This relation is dependent on th e situation of the world economy. If an agricultural country has high industrial productivity, high agricultural productivity may enhance in dustrialization, but this relation may become inverse by changing the performance of other less developed countries. Furthermore, we examine the effects of less productive industrialized countries. Those countr ies deter industrialization of less developed countries and developmen t of other industrialized countries. This result is important to consi der the infant industry protection policy.