Consumption efficiency hypothesis and the HOS model: Some counterintuitive results
AbstractWe show how accommodation of the consumption efficiency hypothesis can explain the existence of involuntary unemployment in the two-by-two Heckscher-Ohlin-Samuelson (HOS) model. Although the workers consume both the commodities their nutritional efficiency depends on the consumption of one commodity only. An increase in the relative price of the capital-intensive (labour-intensive) goods raises (lowers) the effective employment in the economy. The effects of commodity price changes on the output levels of the two sectors might be perverse. These results are different from the standard HOS results.
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Bibliographic InfoArticle provided by Elsevier in its journal Research in Economics.
Volume (Year): 62 (2008)
Issue (Month): 2 (June)
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Web page: http://www.elsevier.com/locate/inca/622941
Other versions of this item:
- Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2007. "Consumption efficiency hypothesis and the HOS model: Some counterintuitive results," MPRA Paper 5325, University Library of Munich, Germany.
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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