Birth and career profile:
Born on 23rd June, the British economist Sir William Arthur Lewis received his B.Sc. and doctorate (Ph.D.) degrees in 1937 and 1940 respectively, from the famous London School of Economics. Prior to being appointed as the Vice Chancellor of the University of the West Indies in 1959, he temporarily served as a lecturer in the University of Manchester. In 1963, 'Knighthood' was conferred upon him and he received appointment as the University Professor as well. He also served as the Director of the Caribbean Development Bank in 1970.
The researches of this Nobel-winning economist mainly deal with 2 models which depict and clarify various problems faced by developing countries in the economic spheres.
The two-tier Dual Sector model: This simple model defines the economy of country with respect to 2 sectors, namely the Traditional and Modern Sectors. While the Traditional sector is characterized by unemployment and low wages, the Modern Sector is where there is a major accumulation of capital or wealth. It is due to the low wages in the Traditional sectors that labors are often compelled to migrate to the contemporary capitalistic sectors in search of relatively high wages. Owing to lowering of wages in the contemporary sectors due to competitions, high profits are incurred, and this money is utilized for further economic expansions.
This is how this model goes on describing the reason as to why there exists high capital rents and low wages in developing countries, in spite of rapid economic developments.
The Trade Model terms: This model followed the Dual Sector model, laying down the terms and conditions of determining commercial activities between developed and developing countries across the globe. The determinants of the trading terms include comparative labor productivities in the agricultural sector. According to Lewis, the comparison between the agricultural sectors of rich and poor nations goes on to decide the trading terms between them.
Books by Sir Arthur Lewis