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Urban Unemployment and the Gains from Trade

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  • Batra, Raveendra N
  • Naqvi, Nadeem

Abstract

A welfare ranking of alternative commercial policies is constructed for the mobile capital Harris-Todaro economy. It is sh own that, despite the presence of unemployment, most noninterventioni st policies suggested by the competitive model of gains from trade ca rry over to the mobile capital Harris-Todaro economy. Yet in contradi ction to the competitive model, it is shown that all forms of trade i ntervention are not detrimental to welfare. Only those that reduce th e volume of trade are. The export promotion policies so copiously fol lowed by developing countries are vindicated, but their import substi tution policies are shown to be without justification. Copyright 1987 by The Review of Economic Studies Limited.

Suggested Citation

  • Batra, Raveendra N & Naqvi, Nadeem, 1987. "Urban Unemployment and the Gains from Trade," Economica, London School of Economics and Political Science, vol. 54(215), pages 381-395, August.
  • Handle: RePEc:bla:econom:v:54:y:1987:i:215:p:381-95
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    Cited by:

    1. Chaudhuri, Sarbajit, 2007. "Foreign capital, welfare and urban unemployment in the presence of agricultural dualism," Japan and the World Economy, Elsevier, vol. 19(2), pages 149-165, March.
    2. Shigemi Yabuuchi, 2011. "Emigration promotion and urban unemployment," Economics Bulletin, AccessEcon, vol. 31(4), pages 2816-2823.
    3. Gupta, Manash Ranjan, 1995. "Tax on foreign capital income and wage subsidy to the urban sector in the Harris-Todaro model," Journal of Development Economics, Elsevier, vol. 47(2), pages 469-479, August.
    4. Shigemi Yabuuchi & Hamid Beladi, 2001. "Urban unemployment, informal sector and development policies," Journal of Economics, Springer, vol. 74(3), pages 301-314, October.
    5. Chi-Chur Chao & Chong Yip, 2000. "Urban unemployment and optimal trade policy in a cash-in-advance economy," Journal of Economics, Springer, vol. 71(1), pages 59-77, February.
    6. Gilbert, John & Oladi, Reza, 2009. "Capital specificity, imperfect labor mobility and growth in developing economies," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 113-122, January.
    7. Anil Lal, 1997. "Import Liberalization, Urban Unemployment, and Capital Mobility: a Welfare Analysis," International Economic Journal, Taylor & Francis Journals, vol. 11(2), pages 21-37.
    8. Shigemi Yabuuchi, 2009. "Emigration and wage inequality in a dual economy," Economics Bulletin, AccessEcon, vol. 29(3), pages 1549-1554.
    9. Choi, Jai-Young & Price, Donald I. & Allen, C. Larry, 1997. "Further implications of tariffs in the mobile capital Harris-Todaro model," International Review of Economics & Finance, Elsevier, vol. 6(1), pages 87-102.
    10. Chao, Chi-Chur & Yu, Eden S. H., 1995. "The shadow price of foreign exchange in a dual economy," Journal of Development Economics, Elsevier, vol. 46(1), pages 195-202, February.
    11. Chi-Chur Chao & Eden Yu, 1991. "Quantitative restrictions, unempolyment and welfare," Open Economies Review, Springer, vol. 2(2), pages 211-217, June.
    12. Lal, Anil K., 1995. "Increasing returns, urban unemployment, and international capital mobility: A trade policy analysis," Journal of Development Economics, Elsevier, vol. 46(1), pages 181-193, February.
    13. Shigemi Yabuuchi, 1996. "Urban Unemployment And Development Policy: The Introduction Of An," Economics and Politics, Wiley Blackwell, vol. 8(3), pages 241-249, November.
    14. Marjit, Sugata & Beladi, Hamid, 2003. "Possibility or impossibility of paradoxes in the small country Harris-Todaro framework: a unifying analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 379-385, October.
    15. Jai-Young Choi, 1999. "Factor Growth, Urban Unemployment and Welfare Under Variable Returns to Scale," International Economic Journal, Taylor & Francis Journals, vol. 13(4), pages 17-34.
    16. Azusa Nakamura, 2013. "Special Issue. Guest Editor: Zhihao Yu," Review of Development Economics, Wiley Blackwell, vol. 17(3), pages 585-593, August.
    17. Yabuuchi, Shigemi, 1997. "Urban unemployment, international labor mobility and welfare," Japan and the World Economy, Elsevier, vol. 9(1), pages 71-79, March.
    18. Manjusri Bandyopadhyay & Manas Gupta, 1995. "Development policies in the presence of an informal sector: A note," Journal of Economics, Springer, vol. 61(3), pages 301-315, October.
    19. Manash Gupta, 1998. "Foreign capital and technology transfer in a dynamic model," Journal of Economics, Springer, vol. 67(1), pages 75-92, February.

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