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Title: |
The Laursen-Metzler Employment Effect |
| Author: |
Das, Satya P. |
| Author
Affiliation: |
IN U |
| Source: |
International Economic Journal, Winter 1990, v. 4, no. 4, pp. 47-53 |
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Publication Date: |
Winter 1990 |
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Abstract: |
Using an intertemporal model and
incorporating wealth effects in consumption and leisure decisions, this
paper reexamines the Laursen-Metzler question of the effect of terms of
trade changes on employment and current account, with particular
emphasis on employment. It does find support for the original
Laursen-Metzler result that a (temporary) terms of trade decline
increases current employment. However, the mechanism through which this
happens is quite different from Laursen-Metzlers own Keynesian
mechanism. |
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