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Immiserizing Growth and the Metzler Paradox in the Ricardian Model

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Abstract

Conditions for the occurrence of immiserizing growth and the Metzler paradox are analysed in the Ricardian model when consumers in the foreign country have Leontief preferences while consumers in the home country have Cobb-Douglas preferences. By using specific functional forms, the conditions for the occurrence of the two paradoxes are defined in terms of the exogenous parameters of the model rather than endogenous variables such as the elasticity of demand for exports in the conditions of Bhagwati (1958) and Metzler (1949a and b). It is shown that the simultaneous occurrence of both paradoxical results is possible for some parameter values.

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  • Collie, David R., 2009. "Immiserizing Growth and the Metzler Paradox in the Ricardian Model," Cardiff Economics Working Papers E2009/11, Cardiff University, Cardiff Business School, Economics Section.
    • Handle: RePEc:cdf:wpaper:2009/11
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    1. repec:bla:econom:v:42:y:1975:i:167:p:319-26 is not listed on IDEAS
    2. Lloyd A. Metzler, 1949. "Tariffs, International Demand, and Domestic Prices," Journal of Political Economy, University of Chicago Press, vol. 57(4), pages 345-345.
    3. Lloyd A. Metzler, 1949. "Tariffs, the Terms of Trade, and the Distribution of National Income," Journal of Political Economy, University of Chicago Press, vol. 57(1), pages 1-1.
    4. Jones, Ronald W, 1969. "Tariffs and Trade in General Equilibrium: Comment," American Economic Review, American Economic Association, vol. 59(3), pages 418-424, June.
    5. Jones, Ronald W, 1985. "Income Effects and Paradoxes in the Theory of International Trade," Economic Journal, Royal Economic Society, vol. 95(378), pages 330-344, June.
    6. Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(3), pages 201-205.
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    1. Syed Tehseen Jawaid & Mariya Ahmad Qureshi & Samra Ali, 2021. "Does immiserizing growth exist? Evidence from world’s top trading nations," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 14(2), pages 124-148, January.

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    More about this item

    Keywords

    Immiserizing Growth; Metzler Paradox; Import Tariffs; Ricardian Model;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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