Who is the Ranis in Fei-Ranis?
Fei–Ranis model of economic growth
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Agricultural surplus plays a major role as a wage fund. Its importance can be better explained with the help of the graph on the right, which is an integration of the industrial sector graph with an inverted agricultural sector graph, such that the origin of the agricultural sector falls on the upper-right corner. This inversion of the origin changes the way the graph is now perceived. While the labor force values are read from the left of 0, the output values are read vertically downwards from O. The sole reason for this inversion is for the sake of convenience. The point of commercialization as explained before (See Section on Basics of the model) is observed at point R, where the tangent to the line ORX runs parallel to OX.