Foreign Capital, Technology Transfer and Urban Unemployment: A Theoretical Analysis

Kausik Gupta
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Kausik Gupta: The University of Burdwan

Indian Economic Review, 1999, vol. 34, issue 1, 51-71

Abstract: We consider a three-sector Generalized Harris-Todaro model where the third sector is the foreign enclave. It is assumed to be located in the urban area and uses sector-specific foreign capital. In this model technology transfer takes place from the foreign enclave to the domestic enclave. A dynamic version of the model is considered. The long run equilibrium and the comparative steady-state effects are analyzed in the presence of technology transfer. We get some interesting effects of reduction in the tax rate on foreign capital income on the short-run and long-run equilibrium levels of national income and urban unemployment rate under some meaningful conditions.

JEL-codes: F21 (search for similar items in EconPapers)
Date: 1999
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