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Inappropriate Technology or Inappropriate Demand? The Employment Problem of Developing Countries in a Many-Good Framework

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  • Oil Hawrylyshyn

Abstract

The effect of technological rigidities in production upon the employment problem of LDC's is considered in a many-goods framework. Eckaus' factor proportions argument shows that non-substitutability in the production factor is a sufficient condition for unemployment under the very strict rigidity - all efficient techniques for all goods are more capital intense than the endowment ratio. A further necessary condition is that demand by "inappropriate". The likelihood of inappropriate technology leading to unemployment is decreased. However, inappropriate demand is a sufficient condition for unemployment. The policy implications are that LDC's must pay at least as much attention to demand as supply conditions.

Suggested Citation

  • Oil Hawrylyshyn, 1975. "Inappropriate Technology or Inappropriate Demand? The Employment Problem of Developing Countries in a Many-Good Framework," Working Paper 189, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:189
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