Revisiting the Apparent Paradox: Foreign Capital Inflow, Welfare Amelioration and ‘Jobless Growth’ with Agricultural Dualism and Non-traded Intermediate Input

Soumyatanu Mukherjee

Journal of Economic Integration, 2012, vol. 27, 123-133

Abstract: In order to answer the pertinent question why developing countries are showing penchant for foreign capital over the last two decades in spite of its detrimental effects as revealed from the conventional two-sector mobile capital version of Harris–Todaro (HT) model in the presence of protectionist policy; this paper, in terms of a three-sector HT type general equilibrium model with agricultural dualism where advanced agricultural sector produces a non-traded intermediate input using capital apart from labour and land for the agro-based industry in the urban sector, tries to show that foreign capital inflow may not only improve social welfare, but also lower the magnitude of urban unemployment of labour or may lead to the phenomenon of ‘jobless growth’.

Keywords: Foreign Capital; Agricultural Dualism; Non-traded Intermediate Input; Welfare; Urban Unemployment; Jobless Growth; Stolpersamuelson Theorem; General Equilibrium Model (search for similar items in EconPapers)
JEL-codes: C62 C68 F11 F16 F21 J01 J21 O18 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (11)

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Working Paper: Revisiting the Apparent Paradox: Foreign Capital Inflow, Welfare Amelioration and ‘Jobless Growth’ with Agricultural Dualism and Non-traded Intermediate Input (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0563

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