Second, there may be differences in the degree of price flexibility. In both industrialized economies and developing countries, these may vary across sectors and change over time. In the institutional context of industrialized countries, macroeconomics sought to focus on the implications of wage-rigidities. But in developing countries, where formal sector employment is a small proportion of employment in the economy as a whole, the rigidity of money wages, or real wages, is a less critical policy problem. In fact, the nature of price formation differs across sectors in these dualistic economies. In the agricultural sector, prices are determined largely by demand and supply through market-clearing. Indeed, government support prices for agriculture in many developing countries are attributable to this reality. In the non-agricultural sector, particularly manufacturing, prices are determined through mark-ups on a cost-plus basis. Moreover, in some developing countries wages in the organized sector are characterized by an indexation which imparts rigidity to real wages. In such price-wage interaction, the role of trade unions is often significant but not quite recognized. Obviously, generalizations are difficult. Yet, it can be said that agricultural prices are more flexible than industrial prices, and agriculture is typically more important in developing countries. Historically, oligopolies, with their associated price-rigidities, were more important in industrialized countries than they are now, but such oligopolies remain important in the manufacturing sector in many developing countries. On balance, it is plausible to argue that wages and prices are more flexible in developing countries than in industrialized economies. It is also reasonable to suggest that, insofar as there are wage-rigidities in both sets of countries, the underlying factors are different