Hymer-Resnick and East Asian Industries in Open Rural Economies: Delineation by Seasonal Responses

Abstract

We model the differential responses of rural industries in a Dutch Disease framework. The farm sector, F, is subject to seasonal undulation, is exportable; the Z-goods sector is importable and G is either nontrade or exportable. Labor is quasi-surplus. We show that exogenous or season-induced expansion in F expands G if nontraded (East Asian response) and shrinks Z unambiguously (Hymer-Resnick response). When G is exportable, expansion in F leaves G output unchanged (season neutral), shrinks Z, while the export of G falls (Dutch Disease).