Removal of Protectionism, Foreign Investment and Welfare in a Model of Informal Sector
University of Calcutta
University of Calcutta - Department of Economics
The paper develops a three-sector general equilibrium model with two informal sectors with complete mobility of labour between these sectors and with a positive relationship between wage income and labour's efficiency to show that the results relating to foreign capital inflow and removal of protectionism may be counterintuitive to the conventional wisdom. The paper is also devoted to explain why some developing countries implement tariff reforms very slowly compared to others, even after formally choosing free trade as their development strategies, in a more general fashion than the existing tariff-jumping theory.
Number of Pages in PDF File: 21
JEL Classification: F10, F13, F21, O17working papers series
Date posted: January 27, 2002
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