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Chapter 15 Public Inputs, Urban Development, and Welfare in a Developing Economy

In: Contemporary and Emerging Issues in Trade Theory and Policy

Author

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  • Chi-Chur Chao
  • Jean-Pierre Laffargue
  • Eden S.H. Yu

Abstract

This chapter examines the impact of urban development through the government provision of public inputs in a developing economy. When a financing constraint is taken into account, an increase in public inputs may worsen urban unemployment and hence reduce welfare of the economy. Further, the optimal level of public-input provision is larger (smaller) than that under full employment, if there exits a positive (negative) employment effect. The theoretical results are confirmed by numerical simulations.

Suggested Citation

  • Chi-Chur Chao & Jean-Pierre Laffargue & Eden S.H. Yu, 2008. "Chapter 15 Public Inputs, Urban Development, and Welfare in a Developing Economy," Frontiers of Economics and Globalization, in: Contemporary and Emerging Issues in Trade Theory and Policy, pages 297-314, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:fegzzz:s1574-8715(08)04015-3
    DOI: 10.1016/S1574-8715(08)04015-3
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