Technical Progress, Urban Unemployment and Heterogeneous Firms

Hamid Beladi and Reza Oladi

Economics and Politics, 2014, vol. 26, issue 3, 519-529

Abstract: type="main" xml:id="ecpo12047-abs-0001">

We construct a general equilibrium model of urban unemployment with a continuum of heterogeneous urban firms producing differentiated products in a monopolistic competitive market. We introduce a notion of pattern of technical progress among the heterogeneous urban firms and show that this pattern plays a crucial role in determining the effects of urban technical progress in a developing economy. In particular, we show that the possibility of immiserizing technical progress depends on the pattern of progress among the heterogeneous urban firms.

Date: 2014
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