Author : Edward Barbier
Release : 2005
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Trade and Development in a Labor Surplus Economy - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Trade and Development in a Labor Surplus Economy write by Edward Barbier. This book was released on 2005. Trade and Development in a Labor Surplus Economy available in PDF, EPUB and Kindle. 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.