Adjustment Costs and Immiserizing Growth in LDCs
Utah State University - Department of Economics and Finance
Utah State University - College of Business - Department of Economics
Review of Development Economics, Vol. 12, No. 4, pp. 779-791, November 2008
Using a general equilibrium model of a small developing economy, the authors demonstrate that the introduction of asymmetric adjustment costs makes the rate of urban employment respond to an exogenous shock in the aggregate capital endowment, raising the possibility of several counter-intuitive immiserizing growth scenarios.
Number of Pages in PDF File: 13
Date posted: October 27, 2008