The two-sector specific factor model is typically used in the theory of international trade where it helps to clarify the principle of comparative advantage. Instead, we use this model as explicit theoretical framework to explain major trends of long-run economic development. Combined with...

Using census data (for 1991 and 2000) for more than 5.000 municipalities, we examine the relationship between income per capita and inequality at the municipal level in Brazil. We uncover the existence of an “inverted-U” relationship in 1991 that flipped into a “straight-U” relationship...