Abstract
This paper explores the long-run economic growth and labor migration in the process of economic development. We adopt the dual economy model in which there exist two production parts; manufacturing and agriculture. In the case of closed economy, two production parts remain and the labor allocation is constant along the equilibrium path. If the economy participates in the international commodity market, the equilibrium path leads it to complete specialization. Rural (agricultural) to urban (manufacturing) migration continues until the stock of capital reaches a certain level. After the agricultural sector vanishes, the GDP grows at a constant rate that is higher than that in the closed economy.
