Inappropriate Technology or Inappropriate Demand? The Employment Problem of Developing Countries in a Many-Good Framework

Oli Hawrylyshyn

Working Paper from Economics Department, Queen's University

Abstract: The effect of technological rigidities in production upon the employment problem of LDC's is considered in a many-goods framework. Eckaus' factor proportions argument shows that non-substitutability in the production factor is a sufficient condition for unemployment under the very strict rigidity - all efficient techniques for all goods are more capital intense than the endowment ratio. A further necessary condition is that demand by "inappropriate". The likelihood of inappropriate technology leading to unemployment is decreased. However, inappropriate demand is a sufficient condition for unemployment. The policy implications are that LDC's must pay at least as much attention to demand as supply conditions.

Pages: 29
Date: 1975
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:189

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