Given that the pool of underutilized labour is large in almost all developing countries (either in the form of open unemployment or in the form of hidden unemployment in both the agricultural and the informal sector), this then leads to an increase in employment in the modern sector which in turn leads to more incomes and savings. The expansion of the production of the modern sector moreover brings about the penetration of modern technology into the economy and hence an increase in productivity and goods supply, also adding to higher incomes. 8 If the initial demand impulse is created by.
