Trade and Development in a Labor Surplus Economy
Trade and Development in a Labor Surplus Economy

Author: Edward Barbier

Publisher:

Published: 2005

Total Pages: 33

ISBN-13:

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This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market in the home country's instead of a Lewisian market, and alternative utility functions.

Trade and Development in a Labor Surplus Economy
Trade and Development in a Labor Surplus Economy

Author: Edward B. Barbier

Publisher:

Published: 2008

Total Pages: 0

ISBN-13:

DOWNLOAD EBOOK

This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market instead of a Lewisian market in the home country and alternative utility functions.