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Immiserizing Growth and the Metzler Paradox in the Ricardian Model

David Collie

International Economic Journal, 2012, vol. 26, issue 1, 141-154

Abstract: Conditions for the occurrence of immiserizing growth and the Metzler paradox are analysed in the Ricardian model when consumers in the foreign country have Leontief preferences while consumers in the home country have Cobb-Douglas preferences. By using specific functional forms, the conditions for the occurrence of the two paradoxes are defined in terms of the exogenous parameters of the model rather than endogenous variables such as the foreign import demand elasticity in the conditions of Bhagwati (1958) and Metzler (1949a, b). It is shown that the simultaneous occurrence of both paradoxical results is possible for some parameter values.

Date: 2012
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Working Paper: Immiserizing Growth and the Metzler Paradox in the Ricardian Model (2009) Downloads
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