Robinson: Toward and Adequate Long-Run Model of Income Distribution and Economic Development

Robinson, Sherman. (1976). Toward an Adequate Long-Run Model of Income Distribution and Economic Development (Vol. 66, 122-127): JSTOR.

“This paper has two purposes. The first is to present a strategy for constructing long-run, economy-wide models of developing countries. Second, the paper will outline the components of one possible long-run model which includes the distribution of income” (122).

Long-run models should be, “…multi-sector planning models” (123). Wages and prices should be endogenously determined (123). A long-term model must also determine distribution in greater detail than simply functional distribution. Additionally, an economic model must not model year-to-year equilibrium, as there is little evidence that markets clear efficiently.

Proposed structure for a long-run model:

Robinson’s model has two distinct stages. The first stage gives production, employment, wage, prices and the distribution of income. The second stage is a number of different sub-models which take Stage 1 inputs and produce supplies, and all of the inputs needed for stage 1 in the subsequent year.

Equilibrium is sought in stage one in the short-term: it is defined as, “…zero excess demand in product and factor markets subject to a number of constraints on factor mobility” (125). Secondly, neo-classical equilibrium approaches can be seen in stage 1, but are never achieved. The final form of equilibrium is that of long-term equilibrium in which the first two types of equilibrium can be seen as realized.

This model did not exist at the time of this article’s writing, though much of this can be seen as foundational for other models that appeared subsequently.