Describe Lewis model of development in an economy with unlimited supply of labour. IsLewis model really capital driven? Give reasons.

The Lewis model of economic development, proposed by economist W.A. Lewis, is a structural change theory that focuses on the transition of an economy from a subsistence agricultural sector to a more modern, industrial sector. Here's a step-by-step description of the model:

1. Dual Sector Economy: The Lewis model assumes a dual sector economy, consisting of a traditional, overpopulated rural subsistence sector and a modern, urban industrial sector. The subsistence sector has a surplus of labor, while the industrial sector offers higher wages and opportunities for advancement.

2. Labor Transfer: The model suggests that labor will gradually transfer from the agricultural sector to the industrial sector. This is driven by the industrial sector's need for cheap labor and the agricultural sector's ability to lose labor without a decrease in output.

3. Capital Accumulation: The industrial sector, with its higher productivity, generates profits which are reinvested as capital. This capital accumulation leads to further growth and development in the industrial sector.

4. Economic Development: As more labor moves to the industrial sector and capital continues to accumulate, the economy experiences growth and development. Eventually, the agricultural sector shrinks and the industrial sector becomes dominant.

As for whether the Lewis model is capital-driven, it can be argued that it is, to a large extent. The model emphasizes the role of capital accumulation in the industrial sector as a key driver of economic development. The profits generated in the industrial sector are reinvested as capital, which in turn leads to further growth and development. This process of capital accumulation and reinvestment is a central mechanism in the Lewis model, making it largely capital-driven.

However, it's also important to note that the model recognizes the role of labor transfer in economic development. The movement of labor from the agricultural sector to the industrial sector is a crucial part of the transition process. So, while capital plays a significant role, labor is also a key factor in the Lewis model of economic development.