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Title: |
Urban Unemployment and Foreign Investment: The Quota Case |
| Author: |
Chao, Chi-Chur;
Yu, Eden S. H. |
| Author
Affiliation: |
OR State U and
Chinese U Hong Kong; Chinese U Hong Kong |
| Source: |
International Economic Journal, Autumn 1996, v. 10, no. 3, pp. 1-18 |
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Publication Date: |
Autumn 1996 |
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Abstract: |
Exogenous foreign capital inflows in the
presence of an import quota necessarily improve welfare of a competitive
full employment economy; foreign investment, however, may be
immiserizing in the presence of a quota for the Harris-Todaro economy
incorporating sector-specific unemployment in the short run. In
contrast, foreign investment is always welfare-improving in the long
run. The condition under which immiserizing can occur is delineated in
this paper. The extent of the unemployment effect is crucial in
determining if foreign investment is conducive or detrimental to
domestic welfare. |
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