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Title: |
Import Liberalization, Urban Unemployment, and
Capital Mobility: A Welfare Analysis |
| Author: |
Lal, Anil K. |
| Author
Affiliation: |
Pittsburg State
U |
| Source: |
International Economic Journal, Summer 1997, v. 11, no. 2, pp. 21-37 |
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Publication Date: |
Summer 1997 |
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Abstract: |
This paper examines the issue of import
liberalization in the presence of urban unemployment when capital moves
freely in and out of the rural area. To this end, the specific-factors
version of the Harris-Todaro model is utilized. Formulas for the
calculation of the shadow price of foreign exchange and capital are
derived under alternative forms of import restrictions. It is shown
that, as compared to an initial situation of capital immobility,
international capital mobility, induced by reduction in alternative
forms of import restrictions, into the rural area is welfare enhancing. |
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