Three-sector hypothesis
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The Three-sector hypothesis is a macroeconomic theory. It says that there are three kinds of economic activities, which are very different from each other:
- The extraction of raw materials
- Manufacturing goods
- Providing services
These kinds of activities are named sectors. The theory speaks about the primary, secondary, and tertiary sector. The theory was developed by Alan Fisher,[1] Colin Clark[2] and Jean Fourastié[3] in the 1930s. Clark used a speech given by Sir William Petty, in 1690.[4] For this reason the theory is also known as Petty's Law.[5]
The theory also says that the main focus of the economy of a country will change, from the primary to the secondary, and from the secondary to the tertiary sector, as the country's economy develops.
References [change]
- ↑ Fisher A: The clash of progress and security. Macmillan, London 1935
- ↑ Clark C: The conditions of economic progress. Macmillan, London 1940
- ↑ Fourastié J: Le Grand Espoir du XXe siècle. Progrès technique, progrès économique, progrès social. Presses Universitaires de France, Paris 1949
- ↑ Petty W: Political Arithmetick or a Discourse Concerning, The Extent and Value of Lands, People, Buildings: Husbandry, Manufacture, Commerce, Fishery, Artizans, Seamen, Soldiers; Publick Revenues, Interest, Taxes, Superlucration, Registries, Banks, Valuation of Men, Increasing of Seamen, of Militia's, Harbours, Situation, Shipping, Power at Sea, &c. As the same relates to every Country in general, but more particularly to the Territories of His Majesty of Great Britain, and his Neighbours of Holland, Zealand, and France. London 1690
- ↑ Murata Y: Engel's law, Petty's law, and agglomeration. In: Journal of Development Economics 87 (2008): 161-177
