I. Introduction
Two traditions exist side‐by‐side within growth economics. One of them has its roots in development economics and is based on the dual economy approach first formalized by Lewis (1954) and Ranis and Fei (1961). The other has its roots in macroeconomics, and derives from the neoclassical growth model of Solow (1956). The dual economy tradition draws a sharp distinction between the traditional and modern sectors of the economy, typically characterized as agriculture and industry, respectively. The neoclassical model eschews such distinctions and presumes different types of economic activity are structurally similar enough to be aggregated into a single representative sector.
