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Immiserizing Transfer under Variable Returns to Scale

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  • Jai-Young Choi
  • Eden S. H. Yu

Abstract

This paper examines the welfare consequences of a unilateral transfer for both the transfer-paying a nd the transfer-receiving country in which the production functions a re subject to variable returns to scale. The authors obtain the condi tions for the strong paradox, i.e., the welfare of the transfer-payin g country improves and that of the transfer-receiving country decline s in the standard two-country framework. The conditions for the weak paradox, i.e., both the transferor and transferee gain or lose simult aneously, and the normal results, i.e., the transferor loses and the transferee gains, are also derived.

Suggested Citation

  • Jai-Young Choi & Eden S. H. Yu, 1987. "Immiserizing Transfer under Variable Returns to Scale," Canadian Journal of Economics, Canadian Economics Association, vol. 20(3), pages 634-645, August.
    • Handle: RePEc:cje:issued:v:20:y:1987:i:3:p:634-45
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    Cited by:

    1. Brakman, Steven & van Marrewijk, Charles, 1995. "Transfers, returns to scale, tied aid and monopolistic competition," Journal of Development Economics, Elsevier, vol. 47(2), pages 333-354, August.
    2. Hamid Beladi, 1990. "Unemployment and immiserizing transfer," Journal of Economics, Springer, vol. 52(3), pages 253-265, October.
    3. Yano, Makoto, 2021. "Professor Ronald W. Jones and his influence on Asia Pacific economics," Journal of Asian Economics, Elsevier, vol. 77(C).
    4. Bharat R. Hazari & Jean-Pierre Laffargue & Chi-Chur Chao & Eden S. H. Yu, 2007. "A Dynamic Analysis of Tied Aid," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270896, HAL.
    5. William A. Darity, Jr. & Bidisha Lahiri & Dania V. Frank, 2010. "Reparations for African‐Americans as a Transfer Problem: A Cautionary Tale," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 248-261, May.

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