Resource title

Trade and development in a labor surplus economy

Resource image

image for OpenScout resource :: Trade and development in a labor surplus economy

Resource description

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.

Resource author

Edward B. Barbier, Michael Rauscher

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18945

Resource license

Adapt according to the presented license agreement and reference the original author.