This paper considers trade policies and welfare in a Harris-Todaro model with risk averse workers. Workers are assumed to have identical and homothetic preferences, but their incomes differ, depending on whether and where they are employed. When workers are equally valued, maximizing social...

With regard to the effect of growth on the balance of payments of a country, the conclusion of the Keynesian theory of income determination sharply differs from that of the monetary theory. This article suggests an integrated approach towards the derivation of the import function and the balance...

A simple two‐sector general equilibrium model is developed to show how the phenomenon of negative value‐added occurs in the protected sector, when the intermediate input is an exportable of the country. Previously, it has been shown in a partial analysis that the production loss of negative...

This article analyses the welfare implications of the customs unions in the presence of multinational corporations for a less than fully employed small open economy. The traditional two‐sector model, with a specific factor for the multinational corporation, is employed for this purpose. This...

In this paper we consider a simple duopoly market in which a home firm and a foreign firm use labor to produce an identical product and supply it to the home market. Firms emit pollution as a by-product of production. We show conditions under which international trade liberalization decreases...