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Job-search and foreign capital inflow - A two sector general equilibrium analysis
T K BANDOPADHYAY,
Published in ELSEVIER SCIENCE BV
2011
Volume: 28
   
Issue: 6
Pages: 2494 - 2501
Abstract
The purpose of this paper is to extend the Fields' (1989) multi sector job-search model by introducing international trade and capital. Two types of capital are considered: fixed capital and mobile capital. The effects of search intensity and the inflow of foreign capital on the volume and the rate of urban unemployment and on the social welfare are also examined in both of the two cases. The main finding is: more efficient on-the-job search from the rural sector raises unemployment rate when capital is mobile between the two sectors. This is counterproductive to the standard result. © 2011 Elsevier B.V.
About the journal
JournalData powered by TypesetEconomic Modelling
PublisherData powered by TypesetELSEVIER SCIENCE BV
ISSN0264-9993