Trade Reform, Capital Mobility, and Efficiency Wage in a Harris-Todaro Economy
AbstractThe main purpose of this paper is to analyse the impact of trade reform on unemployment and social welfare in a Harris-Todaro (1970) economy with efficiency wage and capital mobility. The analysis shows that capital mobility plays an important role to influence the impact of trade reform on unemployment and social welfare. We find that trade reform raises urban unemployment and produces an ambiguous effect on social welfare when capital is perfectly mobile among the three sectors. However, such policy lowers unemployment and raises social welfare when capital is imperfectly mobile.
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Bibliographic InfoArticle provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.
Volume (Year): 46 (2007)
Issue (Month): 2 ()
Trade Reform; Capital Mobility; Efficiency Wage;
Find related papers by JEL classification:
- F01 - International Economics - - General - - - Global Outlook
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
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