Trade and Development in a Labor Surplus Economy
AbstractThis paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market instead of a Lewisian market in the home country, and alternative utility functions.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 7 (2007)
Issue (Month): 1 (August)
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Web page: http://www.degruyter.com
Other versions of this item:
- Edward B. Barbier & Michael Rauscher, 2005. "Trade and Development in a Labor Surplus Economy," CESifo Working Paper Series 1481, CESifo Group Munich.
- Barbier, Edward B. & Rauscher, Michael, 2005. "Trade and development in a labor surplus economy," Thuenen-Series of Applied Economic Theory 53, University of Rostock, Institute of Economics.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
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