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Cost-Benefit Rules in a Regionalized Disequilibrium Model


  • Ohlsson, Henry


In 1982-83 a mining company in northern Sweden laid off 1,800 employees. The Parliament allotted SEK 309 million for a program of job-creating measures. Evaluation of these measures requires a welfare-theoretic foundation. This analysis focuses on the welfare implications of public production of private goods. These effects depend on which market output is sold and the type of taxes used to balance the public budget. The rules include partial and indirect spill-over effects that can be interpreted in terms of multipliers and marginal propensities to consume. Copyright 1987 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Ohlsson, Henry, 1987. " Cost-Benefit Rules in a Regionalized Disequilibrium Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 89(2), pages 165-182.
  • Handle: RePEc:bla:scandj:v:89:y:1987:i:2:p:165-82

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    References listed on IDEAS

    1. Barro, Robert J & Grossman, Herschel I, 1971. "A General Disequilibrium Model of Income and Employment," American Economic Review, American Economic Association, vol. 61(1), pages 82-93, March.
    2. Muellbauer, John & Portes, Richard, 1978. "Macroeconomic Models with Quantity Rationing," Economic Journal, Royal Economic Society, vol. 88(352), pages 788-821, December.
    3. Johansson, Per-Olov, 1981. " On Regional Effects of Government Policies in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 83(4), pages 541-552.
    4. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    5. Cuddington, John T. & Johansson, Per-Olov & Ohlsson, Henry, 1985. "Optimal policy rules and regime switching in disequilibrium models," Journal of Public Economics, Elsevier, vol. 27(2), pages 247-254, July.
    6. Robin W. Boadway & Frank R. Flatters, 1981. "The Efficiency Basis for Regional Employment Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 14(1), pages 58-77, February.
    7. Johansson, Per-Olov, 1982. "Cost-benefit rules in general disequilibrium," Journal of Public Economics, Elsevier, vol. 18(1), pages 121-137, June.
    8. Harberger, Arnold C, 1971. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay," Journal of Economic Literature, American Economic Association, vol. 9(3), pages 785-797, September.
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    Cited by:

    1. Marchand, Maurice & Pestieau, Pierre, 1987. "Public production and employment policies in a two-region economy with unemployment," Regional Science and Urban Economics, Elsevier, vol. 17(3), pages 345-355, August.

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