REMOVAL OF PROTECTIONISM, FOREIGN INVESTMENT AND WELFARE IN A MODEL OF INFORMAL SECTOR

Sarbajit Chaudhuri () and Ujjaini Mukherjee
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Ujjaini Mukherjee: Dept. of Economics, Calcutta University

International Trade from EconWPA

Abstract: 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.

Keywords: Foreign capital inflow; tariff reduction; mobility of labour; wage efficiency hypothesis; tariff-jumping theory (search for similar items in EconPapers)
JEL-codes: F10 F13 F21 O17 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: Written
Note: Type of Document - pdf; pages: 21
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Related works:
Journal Article: Removal of protectionism, foreign investment and welfare in a model of informal sector (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpit:0511009

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