optimal production lot with imperfect production process under permissible delay in payments and complete backlogging abstract the traditional economic production quantity epq model assumes that the production products are all perfect it is not always true in the real production system due to imperfect production process or other factors imperfect quality items may be produced furthermore it is well known that the total production inventory costs can be reduced by reworking the imperfect quality items produced with a relatively smaller additional reworking and holding costs in addition the permissible delay in payments offered by the supplier is widely adopted in the practical business market in this study we explore the effects of the reworking imperfect quality items and trade credit on the epq model with imperfect production processes and complete backlogging a mathematical model which includes the reworking and shortage costs interest earned and interest charged is presented besides an arithmetic geometric mean inequality approach is employed and an algorithm is developed to find the optimal production policy furthermore some numerical examples and sensitivity analysis are provided to demonstrate the proposed model

capital markets and urban unemployment in this paper we investigate conditions under which reductions in distortions in one market improve national welfare despite the presence of distortions in another market the specific distortions we study are a differential between capital rentals and a rigid urban wage we also introduce a diagrammatic technique which may find use in the analysis of other problems

the backward incidence of pollution control a dual approach abstract the backward incidence of pollution control is reexamined using the techniques of duality theory the simple geometry used establishes the results and clarifies them without the complicated mathematical manipulations required in earlier works thereby making the material more attractive for classroom presentation

immigrant specificity and the relationship between trade and immigration theory and evidence studies routinely document that immigrant employment concentrates in non traded goods sectors and that many immigrants have low inter sectoral mobility we consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation s pattern of production and trade we model an economy producing three goods one is non traded domestic labor and capital are domestically mobile but internationally immobile allowing that some new immigrants will become specific to the non traded goods sector the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants empirical investigation in a panel data set of oecd countries supports the model s prediction that immigration raises the output of non traded goods consistent with the model we also find that immigration and trade are complements given its empirical support the model s implications for immigration policy are then discussed

domestic versus international capital mobility some empirical evidence this paper develops an empirical test to determine whether on average capital moves more easily between industries within a country or between coun tries within an industry the test is applied using cross section dat a on accounting rates of return to capital of u s multinational corp orations in 1966 and 1977 it is found that international capital mob ility was greater in the earlier period but domestic capital mobilit y tended to dominate in the later period these findings are of parti cular importance to the field of international economics since compe ting trade models use opposite assumptions as regards which type of c apital mobility is greater

education overlapping generations and the existence of equilibrium abstract we describe a simple aggregative model the essential features of which are that individuals are mortal overlapping generations and can invest in their own training human capital it is shown by example that if expectations are rational then there may be a unique steady state but no competitive path starting away from the steady state

human capital minimum wage and unemployment a harris todaro model of a developed open economy in many developed countries unemployment is a serious and persistent problem although the character of this problem is highly complex one of its features which can easily be observed is the substantially higher incidence of unemployment among unskilled workers than among those who are skilled a possible explanation for this is the existence of an institutionally given minimum wage which exceeds the market clearing wage for unskilled labour but lies below the equilibrium wage for skilled labour moreover for those who find themselves unemployed because of the minimum wage the principal source of job opportunities tends to be the services sector of the economy which is relatively intensive in its use of unskilled labour the objective of this paper is to develop a simple model of a small open economy based on these observations and to examine the policy implications that emerge from it in connection with the unemployment problem the focus of the analysis however is not on the cyclical aspects of this problem but rather on its steady state nature the basic structure of the model is as follows our economy has two sectors engaged in the production of consumption goods one of these goods is assumed to be traded internationally and the other is non traded following rodriguez 1975 i draw a further distinction between the two sectors nontraded goods which may be regarded as services are assumed to require the use of only capital and unskilled labour as inputs while the traded goods sector uses only capital and skilled labour skills are viewed as productive human capital which can be acquired through formal training in order to sharpen the focus of our analysis on the process of human capital formation i will ignore the problems of physical capital accumulation and population growth the economy is assumed to be small facing a given world price of traded goods as well as a given rental at which the supply of capital from abroad is infinitely elastic in contrast with the assumption of perfect capital mobility neither type of labour is mobile internationally with only one traded commodity and one mobile factor international trade for this economy amounts to an exchange of the single traded consumption good for the services of capital at fixed terms of trade section i of the paper presents the model and solves for the stationary composition of the labour force i e skilled v unskilled and the equilibrium values of relative factor and commodity prices section ii introdluces an institutionally given minimum wage which is binding only in the market for unskilled labour in the spirit of harris and todaro 1970 it is assumed that

a note on optimal replenishment policies for non instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment abstract soni 2013 int j prod econ 146 1 259 268 proposed optimal replenishment policies for non instantaneous deteriorating items i e the product starts deteriorating after a period of no deterioration with price and stock sensitive demand with a stock dependent demand it is desirable to have non zero ending inventory due to potential profit resulting from the increased demand however soni 2013 int j prod econ 146 1 259 268 treated those ending inventory as fresh stocks to go through another period of non deterioration again additionally he assumed for simplicity that the replenishment cycle time t must be longer than the period of non deterioration t d i e t t d in reality one should consider all possible replenishment cycle time to maximize the profit in this note we complement the shortcomings of his model by i selling those ending inventory as salvages and ii considering all possible replenishment cycle time which may be shorter than the period of non deterioration with these modifications the repeatability of the replenishment cycle is ensured and the applicability of soni s model is strengthened the numerical examples indicate that the global optimal solution is indeed possible in the case of t t d

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

trade education and growth the small country case this paper develops optimal educational and trade policies for a small open economy capable of growth a theoretical structure previously used for the analysis of education and growth in closed economies manning 1975 1976 1978 1979a 1979b 1981b is extended to do this the analysis is aggregative it differs from that of a similar problem by aarrestad 1978 by allowing for heterogeneity of the labor force recently henry 1979 and henry and manning 1980 developed the model of this paper to permit the endogenous determination of international commodity prices but only in the context of balanced growth all of these papers belong to a small literature on aggregative aspects of education and growth other examples of which include aarrestad 1975 hu 1976 razin 1972a 1972b tu 1969 1970 and uzawa 1965 oniki and uzawa 1965 is the classic extension of the heckscher ohlin theory of international trade to permit growth in models of their type production possibilities are given instantaneously and are altered over time by factor accumulation educational policy affects the production possibility set in two ways an increase in educational activity reduces the factors available to produce traded goods and so shrinks the production possibility set immediately in the longer term the level of skill is altered so changing the production possibility set both the size and shape of the production possibility set are determined statically and dynamically by educational policy mcmillan 1978 has recently presented a model of public intermediate goods trade and growth with the same property a problem like this is considered in manning 1981a for a general model of capital accumulation and growth the structure of this paper is as follows the model and optimality conditions are first presented growth is then analyzed and it is found that specialization is the most likely pattern of production a deeper investigation of the economics of the model explains this conclusion some concluding remarks are then made details of the lengthy mathematical proofs of two propositions are relegated to a mathematical appendix

an eoq model with partial backordering and advance payments for an evaporating item abstract in the classic economic order quantity model the purchasing cost of an order is paid at the time of its receipt in some cases retailers ask purchasers to pay all or a fraction of the purchasing cost in advance and may allow them to divide the prepayment into several equal sized parts in this paper an economic order quantity model for an evaporating item with partial backordering and partial consecutive prepayments is developed with a real case study of a gasoline station real numerical examples illustrate the proposed model and the solution method

tax on foreign capital income and wage subsidy to the urban sector in the harris todaro model abstract we consider endogenous foreign capital inflow in the different versions of harris todaro model wage subsidies are financed by taxing the foreign capital income which is otherwise repatriated their effects on unemployment and national income are analysed

the shadow price of foreign exchange with minimum wages abstract this note derives the shadow price of foreign exchange in a small open economy with minimum wage unemployment under tariffs quotas and voluntary export restraints the analysis is conducted in a dual general equilibrium framework with many goods and factors

how effective is the minimum wage at supporting the poor this study investigates the antipoverty efficacy of minimum wage policies proponents of these policies contend that employment impacts are negligible and suggest that consumers pay for higher labor costs through imperceptible increases in goods prices adopting this empirical scenario the analysis demonstrates that an increase in the national minimum wage produces a value added tax effect on consumer prices that is more regressive than a typical state sales tax and allocates benefits as higher earnings nearly evenly across the income distribution these income transfer outcomes sharply contradict portraying an increase in the minimum wage as an antipoverty initiative

environmental capital flight and pollution tax this paper analyzes the impacts of a production pollution tax on environmental capital flight and national product in a two country static general equilibrium model with two way foreign investment it is assumed that the capital input in both countries is a composite good of domestic and imported capital and pollution is assumed to originate in the production process the productivity of capital in each country is negatively or positively related to the worldwide aggregate emissions

the harris todaro model and economies of scale the authors attempt to reanalyze the harris todaro migration model in the presence of economies of scale in the manufacturing sector focusing on economies of scale that are external to a given firm but internal to the industry annotation

optimal immigration education and growth in the long run abstract the paper extends manning s model on education and balanced growth to include labour immigration each immigration unit is assumed to consist of one skilled worker and some unskilled members the optimal immigration policy which maximizes the per capita steady state consumption of the host country is derived we show that optimal immigration policy can reduce the steady state skilled labour ratio more interesting still contrary to the widespread belief that immigration of skilled workers hurts local skilled workers it is the unskilled local workers whose interests are threatened by optimal immigration policy

cyclical variations in wage differentials and unemployment this paper attempts to reformulate in a general equilibrium framework reder s model which explains cyclical variations in wage differentials and their general tendencies to narrow specifically i focus on the three aspects of his model the microeconomic behavior of a firm under imperfect information about labor quality the mechanism of the economy creating unemployment and the interaction between wage differentials and unemployment i also explore its implications for the macroeconomic issues on the characteristics of current unemployment and the question of why aggregate employment fluctuates

celebrating a century of the economic order quantity model in honor of ford whitman harris abstract this writing presents a brief introduction to the papers included in the special issue celebrating a century of the economic order quantity model in honor of ford whitman harris published by the international journal of production economics forty one papers covering an extensive scope of inventory management have been incorporated in this volume from contributing authors from 20 countries located in america asia europe and africa this special issue also provides a basis for new directions in inventory management research

an inventory system with demand dependent on both time and price assuming backlogged shortages abstract in this work we analyze an inventory model for items whose demand is a bivariate function of price and time it is supposed that the demand rate multiplicatively combines the effects of a time power function and a price logit function the aim is to maximize the profit per time unit assuming that the inventory cost per time unit is the sum of the holding shortage ordering and purchasing costs an algorithm is developed to find the optimal price the optimal lot size and the optimal replenishment cycle several numerical examples are introduced to illustrate the solution procedure

variable returns to scale urban unemployment and welfare the proposition that free trade is superior to no trade has a classical ancestry adam smith and ricardo were amongst the first proponents of free trade samuelson 26 proved and it is held by economists today that free trade is the optimal policy in the presence of standard paretoconditions it is also generally agreed amongst economists that lower trade intervention is superior to higher trade intervention given competitive conditions in a small country these propositions do not hold however in the presence of factor market imperfections such as wage differentials in a small country and therefore production or wage subsidies improves social welfare the two models which are generally used to investigate the positive as well as normative aspects of trade theory in the presence of unemployment are the uniform real minimum wage model which is based on the assumption of general rigidity of real wage in one or two sectors of production and the sector specific minimum wage model which focuses on the phenomenon of rural urban migration in the face of large scale urban unemployment these two models are commonly utilized by trade theorists to analyze trade and unemployment specifically studies by haberler 13 johnson 16 batra and seth 3 findlay 12 and brecher 6 7 investigate the consequences of rigid factor prices for a small country whereas the normative as well as positive aspects of sector specific unemployment have been explored by harris and todaro 15 bhagwati and srinivasan 4 5 and more recently by batra and naqvi 2 das 10 and kahn 19 it has been correctly observed that the introduction of an exogenously specified real minimum wage among other things generates unorthodox results concerning unemployment and gains from trade a large body of research has also been concerned with the welfare implications of different commercial policies in the context of variable returns to scale kemp and negishi 20 have pointed out the beneficial effects of trade in the presence of variable returns to scale production subsidy and consumption taxes eaton and panagariya 11 have analyzed the question of gains from trade in the presence of variable returns to scale and in the context of pareto welfare criterion whereas choi and yu 8 have examined the welfare implications of tariffs and consumption taxes as well as the welfare rankings of these policies under variable returns to scale while panagariya and succar 25 have modified the necessary and sufficient conditions for stability under increasing returns to scale in urban sector

wage subsidies and distortionary taxes in a mobile capital harris todaro model in prescribing policy to eliminate or mitigate the effects of labour market distortions some form of wage subsidy is usually among the highest ranking options rarely is the source of revenues for these subsidies treated as an explicit issue this omission has special significance for the harris todaro h t model of the labour market since the policy most frequently recommended whether capital is sector specific or intersectorally mobile is an across the board wage subsidy 2 this effectively eliminates the possibility of taxing one subset of sectors rather than subsidizing its complement an option often favoured by those theorists who concern themselves with revenue considerations the next section of this paper sets forth the model of a small open h t economy with mobile capital that is the basis for this analysis section ii re examines three wage subsidies on manufacturing wages on agricultural wages or on both sectors assuming that resources for the subsidies are raised by an across the board tax on profits this is in the tradition of cordenfindlay and we replicate their results though stating them in more precise form so that we might have a standard for later comparison the subsequent sections examine the effects of these subsidies on unemployment and resource allocation if they are financed by a tax on profits in the manufacturing sector section iii or by import tariffs section iv owing to the second best nature of the h t model it will be demonstrated that taxes normally considered distortionary in their own right can be superior to an across the board tax if revenues are constrained and can be very useful instruments if it is the variety of policy tools that is limited section v concludes with a ranking of the various subsidy tax packages

factor trade and goods trade world equilibria with trade in both goods and some factors are studied when international factor endowment differences are the cause of trade a generalized heckscher ohlin theorem is presented the goods trade patterns with and without factor trade are compared factor trade and goods trade tend to be substitutes complements if traded and non traded factors are cooperative non cooperative

possibility or impossibility of paradoxes in the small country harris todaro framework a unifying analysis abstract in this paper we argue that the harris todaro ht framework sometimes satisfies an envelope property which makes it work like a full employment heckscher ohlin samuelson hos model then the ht structure produces very similar results as one gets in the standard hos framework differences arise because the envelope condition may break down we show how several celebrated results in the ht structure can have this reinterpretation

urban unemployment terms of trade and welfare it is generally accepted prior to 1970 that a deterioration in the terms of trade results in lower social welfare in particular prebisch 11 and singer 12 have expressed the basic concern with the terms of trade the secular deterioration in the terms of trade facing less developed countries ldcs leads to income and welfare losses batra and pattanaik 2 nevertheless shows that a deterioration in the terms of trade in the presence of an intersectoral wage differential may raise welfare bhagwati and brecher 5 demonstrate that a decline in the terms of trade can improve real income if capital is mobile internationally recently anam 1 obtains a similarly interesting result for an economy engaging in quota induced rent seeking activities it is notable that none of these studies considers a key feature inherent in a typical ldc namely the existence of substantial urban unemployment thus the purpose of this paper is to examine the welfare impacts of terms of trade losses for ldcs plagued by pervasive urban unemployment the well known harris todaro 7 framework of sector specific unemployment is utilized in addition we derive and contrast various welfare effects of a change in the terms of trade when a ldc pursues alternative import substitution policies i e tariffs vs quotas over the short vs the long run the paper is organized as follows section ii develops the model and provides the transformation relation between urban and rural outputs section iii examines the welfare effects of an exogenous shift in the terms of trade for a tariff or quota distorted economy in the short run as well as in the long run finally concluding remarks are set out in section iv

capital markets urban unemployment and land abstract this paper shows that the remarkable result by khan and naqvi that a reduction in the capital rental differential always improves welfare despite the presence of a rigid urban wage can be obtained only for the 2 2 harris todaro model in an extended harris todaro framework incorporating a third specific factor a decrease in a distortion may not necessarily be welfare improving

urban unemployment international capital mobility and development policy abstract we introduce international capital mobility into the harris todaro model and examine the effectiveness of some policy tools the main message is such that a wage subsidy in manufacturing and a tariff are no longer effective to improve welfare while a wage subsidy in agriculture remains valid under the assumption of international capital mobility this is in sharp contrast to the result obtained for the original harris todaro model

urban development excessive entry of firms and wage inequality in developing countries this paper examines the short and long term effects of urbanisation via favourable urban development policies on income distribution and social welfare for a developing country in which the urban manufacturing sector is characterised by imperfect competition and free entry urbanisation shifts rural workers to the highly productive urban sector while causing production in urban firms to expand because of scale economies however urbanisation may worsen wage inequality between skilled and unskilled labour in the short term in the long term urbanisation can attract new firms to the urban sector and favourable urban development policies may result in excessive entry of firms which can amplify wage inequality in the economy this entry amplifying effect is confirmed empirically especially for low and lower middle income countries if the entry effect is not considered the impact of urbanisation on wage inequality could be understated by 13 for low and lower middle income countries

joint pricing and inventory control for non instantaneous deteriorating items with partial backlogging and time and price dependent demand abstract in this paper a joint pricing and inventory control for non instantaneous deteriorating items is developed we adopt a price and time dependent demand function shortages is allowed and partially backlogged the major objective is to determine the optimal selling price the optimal replenishment schedule and the optimal order quantity simultaneously such that the total profit is maximized we first show that for any given selling price optimal replenishment schedule exists and unique then we show that the total profit is a concave function of price next we present a simple algorithm to find the optimal solution finally we solve a numerical example to illustrate the solution procedure and the algorithm

the locational choice for free trade zones rural versus urban options abstract urban and rural areas are compared as appropriate locations for a free trade zone within a developing country suffering from urban unemployment if domestic capital is mobile between the two regions then the rural area is shown to be preferable to the urban area and sufficient conditions for this conclusion are presented this conclusion may be reversed however if capital is sector specific the condition for this reversal is also discussed

spatial bias and the location of footloose industry a simple regional model this paper develops a simple regional model to analyse the spatial consequences of sectoral policies the model focuses on the regional specificity and footlooseness of different sectors and shows that any policy that alters the balance between sectors in an economy inevitably alters the distribution of economic activities across regions this is true even when the effect of policy is to expand a sector in which production units are completely footloose

the decline of labor productivity in the 1970 s the surprising role of embodied technological change in the 1970s the united states experienced a dramatic slowdown in its labor productivity growth rate after growing at a rate of nearly three percent per year from world war ii through 1973 nonfarm labor productivity growth stalled from the fourth quarter of 1973 through the first quarter of 1980 labor productivity grew at a mere 0 6 percent per year part of the residue of this or any other economic disaster is the blossoming of research interest into that particular problem much effort has been put into explaining the causes of such a steep decline in the rate of productivity growth this literature on the determinants of productivity growth has identified a number of potential causes of the 1970s productivity disaster among the factors which have been identified as affecting the trend rate of growth in labor productivity are a decrease in the rate of labor quality improvement a dramatic increase in energy costs an insufficient growth in capital stock the enactment of growth hindering social regulatory policies e g the clean air act and the occupational safety and health act and a slowdown in the rate of technological advancement although the productivity decline has inadvertently proven beneficial to the economic literature on productivity change and our understanding of the process of productivity enhancements there is still much that needs to be explained about the 1970s denison s 3 careful growth accounting for the 1970s which takes into account all of the hypothetical causes for the growth slowdown mentioned above and more still finds a disconcertingly large unexplained residual the residual in such growth accounting studies is partly attributed to pure technological change this is in part the case since the impact of pure technological change is difficult if not impossible to measure in an independent manner this large residual in growth accounting studies of the 1970s has been taken to mean that sluggish technological change played an important role in that decade s productivity growth slowdown

urban unemployment and the gains from trade a welfare ranking of alternative commercial policies is constructed for the mobile capital harris todaro economy it is sh own that despite the presence of unemployment most noninterventioni st policies suggested by the competitive model of gains from trade ca rry over to the mobile capital harris todaro economy yet in contradi ction to the competitive model it is shown that all forms of trade i ntervention are not detrimental to welfare only those that reduce th e volume of trade are the export promotion policies so copiously fol lowed by developing countries are vindicated but their import substi tution policies are shown to be without justification copyright 1987 by the review of economic studies limited

the embodiment hypothesis an interregional test omy 86 aug 1978 673 700 a note on maximum likelihood estimation of the rational expectations model of the term structure journal of monetary economics 5 1979 133 143 sargent thomas j and neil wallace rational expectations the optimal monetary instrument and the optimal money supply rule journal of political economy 83 apr 1975 241 254 zellner arnold an efficient method of estimating seemingly unrelated regressions and tests for aggregation bias journal of the american statistical association 57 1962 348 368

inventory ordering policies of delayed deteriorating items under permissible delay in payments abstract the existing literature on inventory of deteriorating items considers deterioration to begin as soon as the items are stocked however there are several deteriorating items that do not start deteriorating immediately they are held in stock some farm produce like potatoes yams and even some fruits and vegetables have this property depletion of these items as soon as they are stocked will depend on demand and when deterioration begins it will depend on both demand and deterioration in this paper we develop a mathematical model on the inventory of deteriorating items that do not start deteriorating immediately they are stocked the model also takes into cognizance the fact that in business activities nowadays customers are given some allowed period within which to settle for the goods supplied to them they can use the accrued money from sales of the supplied goods to earn interest within the allowed period they are charged interest only when they fail to settle the amount they owe the supplier at the end of the allowed period

optimal price discounting and lot sizing policies for perishable items in a supply chain under advance payment scheme and two echelon trade credits abstract many researchers have assumed that a retailer announces price discount to motivate market sales when he has competition in markets unanticipated surplus in inventory or change in the production run of a product but in real life situations there are retailers who announce price discount offer under advance payment ap scheme prior to the selling period due to the advancement of internet and on line money transactions the ap scheme is common and useful to decrease the estimation error in demand and to increase the market sales when the items are arrived to the inventory the priority will be given to the customers who use ap scheme this paper considers a supply chain where the supplier provides the retailer a full trade credit period for payments whereas the retailer offers the partial trade credit to his customers i intend to develop an economic order quantity eoq based model with perishable items in order to investigate the retailer s inventory system as a cost minimization problem under ap scheme and two echelon trade credit option mathematical theorems are developed to determine optimal price discounting and lot sizing policies and a lot of managerial phenomena are obtained through numerical examples

human capital and economic growth in a minimum wage economy an increased stock of physical capital within a brecher type minimum wage economy with skilled and unskilled labor may reduce national income in the short run however if capital accumulation stimulated the formation of human capital the long run level of national income can exceed its pregrowth level the conditions are derived under which such reversals occur it is also shown that correcting the distortions due to the minimum wage requires an additional instrument besides the economy wide employment subsidy a tax on the unskilled wage and an education subsidy are examined as possible second instruments copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

stability of the mobile capital harris todaro model some further results a necessary and sufficient condition for stability is derived for the mobile capital harris todaro model of rural to urban migration in developing countries when land is a scarce factor in agriculture the stability condition when land is ignored that the urban sector comprising manufacturing industry and the urban unemployed be more capital abundant is no longer either necessary or sufficient for stability nevertheless this condition always enhances stability and it is sufficient though not necessary for stability in many circumstances e g when land is separable in production from labour and capital intuitive explanations of these conditions are provided excerpt

a note on the stability of the harris todaro model with capital mobility the present note derives the exact stability condition for the harris todaro model with intersectoral capital mobility where land is explicitly included as a third scarce factor in agriculture while the previous study by neary states the difficulty of deriving a clear cut result in such a case this note demonstrates that if capital and land are never technologically substitutes in the agriculture production neary s condition that the urban sector is more capital abundant than the rural sector becomes a sufficient condition for local stability in an important article in this journal neary 1981 considered the stability of the harris todaro model with intersectoral capital mobility among other things neary showed that when relative commodity prices are fixed and capital and labour are subject to constant returns to scale in agriculture an unspecialized equilibrium is dynamically stable if and only if the urban sector is capital abundant relative to the rural sector however in the original work by harris and todaro 1970 the fixed availability of land is included in the agriculture production function hence strictly speaking the stability condition quoted above is not for the original harris todaro model with intersectoral capital mobility on this point neary concluded that the introduction of a third scarcefactor land in agriculture greatly complicates the analysis and makes it impossible to derive simple and clear cut results the present note argues that a definite result can be derived if the normality property of factors of production which was utilized by rader 1968 and suzuki 1985 is assumed

trade liberalization in oligopolistic competition with unemployment a general equilibrium analysis this paper examines the short and long run effects of partial trade liberalization through relaxation of quantity restrictions in an oligopolistically competitive economy with unemployment while the short run effects of the liberalization policy are ambiguous its long run impacts are clear the policy dampens the price of the imported goods raises firms output and reduces the number of firms furthermore the policy lowers the unem ployment ratio and hence improves welfare when the economy suffers from sector specific unemployment whereas the policy may aggravate underemployment and thus may lower welfare for a labour surplus economy

imported technologies urban unemployment and the north south dialogue abstract this paper extends the harris todaro model with intersectoral capital mobility to include sector specific imported technologies technologies are assumed to be embodied in imported capital goods the small economy in the south for which the model is defined can import any amount of these technologies from the north at given royalty rates we find that if the north agrees to reduce the royalty rate on the industrial technology both the level and the rate of urban unemployment would rise and the income distribution change against the wage earners whereas such a reduction for the agricultural technology would have just the opposite effects a decrease in either royalty rate would increase the national income in the south although the magnitude of the increase in income would be larger with reduced royalty rate for agricultural rather than industrial technology the policy implication is that the south should emphasize the import of agricultural technology over the industrial technology

an optimal replenishment policy for non instantaneous deteriorating items with stock dependent demand and partial backlogging abstract in this study we consider a problem of determining the optimal replenishment policy for non instantaneous deteriorating items with stock dependent demand in the model shortages are allowed and the backlogging rate is variable and dependent on the waiting time for the next replenishment the necessary and sufficient conditions of the existence and uniqueness of the optimal solution are shown as the special cases the results for the models with instantaneous or non instantaneous deterioration rate and with or without shortages are derived further we analytically identify the best circumstance among these special cases based on the minimum total relevant cost per unit time sensitivity analysis of the optimal solution with respect to major parameters is carried out finally four numerical examples are presented to demonstrate the developed model and the solution procedure

the trade off between gnp and unemployment in a dual economy many developing nations frequently are reluctant to liberalize their domestic markets and or their trade regimes the effect on the distribution of income is a common rationale for avoiding the politically dangerous step of liberalization the costs to the policymaker of getting the prices right are usually associated with a depreciated capital stock specific human and physical capital and transitional unemployment the notion that urban unemployment may rise in the face of policies that one would normally judge helpful is well understood in the dual economy literature corden 6 uses the harristodaro 11 two sector dual economy model to show how an urban wage subsidy may perversely raise urban unemployment khan and chaudhuri 12 generalize this result to n rural sectors ethnic groups finally gang and gangopadhyay 10 show that under certain sets of realistic assumptions choosing a more labor intensive technique of production may aggravate urban unemployment a separate strand of the dual economy literature explores the issue of optimal policies in a dual economy harris and todaro 11 argue that a manufacturing sector wage subsidy combined with restrictions on labor migration are needed to achieve the first best competitive equilibrium in a dual economy characterized by an urban minimum wage bhagwati and srinivasan 4 elegantly demonstrate that a uniform wage subsidy would do the same job bhagwati 3 has also shown that reductions of an only distortion the urban minimum wage here are successively welfare increasing until the distortion is fully eliminated and for the harris todaro model basu 2 shows that the value of aggregate output gnp is a monotonically increasing function of the uniform wage subsidy secondary distortions related to financing the subsidy remain the primary argument against full implementation of the first best optimal wage subsidy 6 152 in this paper i use the harris todaro dual economy model to demonstrate two connected propositions although a large enough application of any first best policy a uniform wage subsidy or devaluation are but two examples must decrease urban unemployment a small one may raise unemployment 2 thus uncertainty about the appropriate sized policy can lead to

rural urban migration in economic development abstract this paper provides a review of the theoretical literature on rural urban migration in contemporary ldcs the paper begins with a brief discussion of the lewis model before going on to discuss the todaro and the harris todaro models and the large literature which these models have spawned the question of job search in the context of migration and the role of family members in migration decisions are considered next the paper then takes a closer look at the informal sector and also sets out alternative migration functions to the ones usually employed in the literature the paper concludes with a brief note on some of the important implications arising from our study

product differentiation heterogeneous labor and non homotheticity statics and dynamics the problem of product diversity and product differentiation under chamberlinian monopolistic competition has been attracting a great deal of attention recently instrumental to this is perhaps the discovery of the dixit stiglitz utility function 7 in conjunction with revived interest in scale economies the d s utility function framework has been useful to make general equilibrium analysis tractable and facilitate obtaining many interesting results scale economies provide an additional appealing feature to the results the application to other fields notably to international trade theory is impressive thus dixit norman 6 265 wrote the large volume of intra industry trade estimated at 50 of world trade by grubel lloyd 8 can only be understood in the context of product differentiation and economies of scale this line of research reached a culmination with the work of helpman krugman 13 this paper develops a general equilibrium model of monopolistic competition with nonhomothetic production and economies of scale and develops comparative statics and dynamics the lack of homotheticity enters through different types of labor skilled and unskilled the paper investigates two types of dynamic processes one leading to the chamberlinian tangency solution and the other leading to a stable allocation of skilled and unskilled labor in the economy unlike virtually all studies on this topic we have not postulated that the chamberlinian tangency solution or the zero profit condition prevails at the outset of their analysis instead we investigate whether or not the chamberlinian process of achieving the tangency solution via entry or exit of firms depending of course on profits and losses of firms in the industry is indeed stable under a general equilibrium framework with certain assumptions although this result may look intuitively obvious it may be contrasted to a different result obtained elsewhere by us 3 another problem that we are concerned with is the allocation of skilled labor and unskilled labor consider the economy which consists of manufacturing sector x and food sector y

tariffs foreign capital and immiserizing growth with urban unemployment and specific factors of production abstract in this note we show that a recent observation of brecher alejandro as regards tariff induced capital inflows essentially extends to a setting with urban unemployment three factors of production and a variety of labor market conditions in the urban sector

minimum wage unemployment and growth abstract this paper shows that in an overlapping generations model with endogenous growth minimum wage legislation does not necessarily has negative consequences on economic performance such legislation can have positive effects on growth by inducing more human capital accumulation more precisely a low demand for unskilled labor induced by a minimum wage may create an incentive for workers to accumulate human capital moreover it is possible that a decrease in the minimum wage lowers the welfare of each agent in the economy

two way capital flows cross hauling in a model of foreign investment this paper presents a simple model of a small open economy which is open to both commodity trade and foreign investment of a sector specific kind and which exhibits the phenomenon of cross hauling or reverse flows of internationally mobile capital in two different sectors the model which assumes that a single domestic factor is combined with internationally mobile but sector specific capital in each of two sectors one of which produces a non traded good appears to be the simplest possible which permits cross hauling as an endogenous phenomenon

increasing returns dynamic stability and international trade abstract a simple two country two good model in which economies of scale form the basis of international trade is presented it is shown that the larger country exports the good characterized by increasing returns and imports the good subject to constant returns a key feature of the paper is a comprehensive stability analysis it turns out that a normal output price response is necessary for d stability furthermore the marshall lerner condition must be satisfied in terms of the short run import demand elasticities for local dynamic stability finally if international factor mobility is permitted cross hauling of specific factors may be observed

instability in rural urban migration following decades of large scale rural urban migration in developing countries the authors note the recent growth in reverse migration or migration from urban centers to suburban or rural areas which suggests that the labor market adjustment process may be unstable it is our purpose here to investigate the question of stability using some recent developments in nonlinear dynamic analysis and to do so within a framework which closely resembles the original harris todaro model we find that instability is indeed a possibility and that regular or irregular nonperiodic fluctuations can be propagated even in the absence of any exogenous shocks the source of these results is the lag in adjustment on labour markets combined with the nonlinearity of the labour supply function excerpt

foreign capital inflows and welfare in an economy with imperfect competition abstract this paper examines the resource allocational and welfare effects of exogenous inflows of foreign capital in a general equilibrium model with oligopolistic competition and unemployment although the welfare impact for the short run is ambiguous and dependent upon the strength of excess profits and scale economies relative to unemployment in manufacturing in the long run additional inflows of foreign capital always improve national welfare with capital mobility hence attracting foreign capital remains a sound policy for economies characterized by imperfect competition scale economies and regional unemployment

optimal replenishment policies for non instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment abstract this study is motivated by the paper of chang et al international journal of production economics 123 2010 62 68 we extend their inventory model from two aspects 1 the demand rate as multivariate function of price and level of inventory 2 delay in payment is permissible under these assumptions we first formulated a mathematical model and then some useful theoretical results have been derived to characterize the optimal solutions for non zero and zero ending inventory system numerical examples are presented to illustrate the theoretical results the sensitivity analysis of a suitable example is performed and some managerial insights are proposed our analysis revels that it is more beneficial to keep higher inventory level hoping to stimulate more demand even if it results in non zero ending inventory

urban unemployment uncertainty and economic expansion the hypothesis that economic growth may be immiserizing in the presence of market distortions was first explored more than thirty years ago bhagwati 4 201 5 5 481 5 and johnson 11 151 4 amongst others analyzed cases in which factor growth can cause a loss of real income in a small open economy while there are many types of market distortions a particularly interesting one was introduced by harris and todaro 7 126 42 to provide a theoretical rationale for migration patterns in lesser developed economies in the harris todaro henceforth h t model there exists a rigid minimum wage in manufacturing the urban sector that exceeds the freely determined agricultural rural wage rural workers migrate to the urban area until the rural wage equals the expected urban wage where expected is taken to mean the minimum wage times the probability of obtaining employment note that the probability can also be interpreted as the proportion of time that an urban laborer is employed corden and findlay 6 59 78 extended the h t model to the case of intersectorally mobile capital thereby bringing it into alignment with the neo classical trade model they also provided a geometric analysis of the effects of factor accumulation and hicks neutral technical change upon output levels and factor utilization other researchers have examined the mobile capital ht model in terms of its dynamic stability 14 219 34 effects of wage subsidies and taxes 13 69 80 customs unions 15 311 19 and various growth issues including immiserization 12 245 56 as important as these contributions have been they share the common assumption of certainty or certainty equivalence yet the development literature makes clear that the agricultural sector of ldc s is characterized by uncertainty 3 thus just as the neo classical trade literature has been extensively investigated under uncertainty 1 9 so can the h t based literature be extended this has been done only twice by ingene and yu 10 who examined the effect of a change in the minimum wage and ingene 8 who looked at changes in the degree of uncertainty

on the harris todaro model with intersectoral capital mobility n b professor neary was based at trinity college dublin when this article was first published the full text of the article is not available in ora at this time citation neary j p 1981 on the harris todaro model with intersectoral capital mobility economica 48 191 219 234

capital market imperfections labor market disequilibrium and migration a theoretical and empirical analysis i introduction in a thoughtful and pioneering work katz and stark 1986 suggest that capital market imperfections may be an important cause of migration in less developed countries their model is important because it provides an alternative to the host of migration models which focus exclusively on labor market conditions 1 consider for the moment an agricultural region of a less developed country that is undergoing rapid technological change to avail themselves of this change in agricultural technology individuals must possess some minimum amount of financial capital to invest if capital markets were perfect any individual could obtain financing provided that the potential project had an internal rate of return greater than the interest rate if on the other hand some minimum asset value is required to enter capital markets individuals whose asset value is below this level may migrate out of the region for reasons which are more fully discussed below 2 thus katz and stark predict strong migration outflows from regions with a high marginal product of capital and a significant absence of or imperfection in capital markets in a general equilibrium framework of course disequilibrium in one market must be reflected by disequilibrium in some other market so the labor market may be in disequilibrium as well but the fundamental cause may be capital market imperfections capital market imperfections may keep wages low by limiting the amount of capital per worker and hence the marginal product of labor which is then mistakenly interpreted in a migration model as corroboration of the todaro hypothesis in a sense perhaps the todaro model is correct low origin wages in comparison to the expected wage in the destination are driving outmigration but in a more fundamental sense capital market imperfections are causing the outmigration katz and stark derive an interesting and important conclusion from their model viz if a main cause of rural to urban migration a labor market phenomenon is capital market imperfections then a policy to constrain migration should aim at enhancing access to and improving the competitiveness of capital markets and shift away from exclusive attempts to reduce rural urban wage differentials p 137 but to get to the policy conclusion one must first deal with the thorny issue of observational equivalence are low origin wages due to labor or capital market conditions this essay is an attempt to empirically disentangle the two using empirical evidence from ecuador i will proceed as follows first i briefly describe imperfections in ecuadorian capital markets which might lead to out migration from rural areas and summarize recent changes in ecuadorian agriculture which may have intensified the impact of capital market imperfections on migration the combination of these factors may provide the conditions necessary for the katz stark hypothesis i e that imperfect capital markets limit individuals ability to take advantage of changed agriculture structure and technology and that outmigration results the next section formally presents the competing hypotheses labor market vs capital market explanations for internal migration and derives estimating equations the final section attempts to distinguish between the two hypotheses and outlines some important policy conclusions ii capital market structure and technological change in ecuadorian agriculture adios smallholders agricultural credit policy in ecuador was heavily influenced by the easy money of the 1970s and early 1980s as an oil exporter ecuador benefited enormously from the two oil shocks the central bank was flush with new found foreign exchange from oil revenues and external borrowing and much of this windfall was recycled into the domestic economy in the form of sectoral credit at negative real interest rates 3 the agricultural sector was a prime beneficiary of this largesse

stackelberg solution in a vendor buyer supply chain model with permissible delay in payments abstract in practice vendors or sellers often offer their buyers a fixed credit period to settle the account the benefits of trade credit are not only to attract new buyers but also to avoid lasting price competition on the other hand the policy of granting a permissible delay adds not only an additional cost but also an additional dimension of default risk to vendors in this paper we will incorporate the fact that granting a permissible delay has a positive impact on demand but negative impacts on both costs and default risks to establish vendor buyer supply chain models then we will derive the necessary and sufficient conditions to obtain the optimal solution for both the vendor and the buyer under non cooperative stackelberg equilibrium finally we will use two numerical examples to show that 1 granting a permissible delay may significantly improve profits for both the vendor and the buyer 2 the sensitivity analysis on the optimal solution with respect to each parameter and 3 the comparisons between nash and stackelberg solutions

urban unemployment and non immiserizing growth abstract one purpose of this paper is to show that in the harris todaro economy economic expansion can not be immiserizing another purpose of this paper is to examine the implications of economic expansion for urban unemployment as well as sectoral outputs for the case of non neutral technical change finally it is shown that a damaging property of the harris todaro model that capital accumulation causes unemployment to rise whereas labor growth causes it to fall is at least partially rectified by the incorporation of land as a scarce factor in the agricultural sector

a comprehensive extension of optimal ordering policy for stock dependent demand under progressive payment scheme in a recent paper soni and shah 2008 presented an inventory model with a stock dependent demand under progressive payment scheme assuming zero ending inventory and adopting a cost minimization objective however with a stock dependent demand a non zero ending stock may increase profits resulting from the increased demand this work is motivated by soni and shah s 2008 paper extending their model to allow for 1 a non zero ending inventory 2 a profit maximization objective 3 a limited inventory capacity and 4 deteriorating items with a constant deterioration rate for the resulted model sufficient conditions for the existence and uniqueness of the optimal solution are provided finally several economic interpretations of the theoretical results are also given

international capital mobility and commercial policy in an economic region abstract if two small countries are linked by capital movements then at low tariff levels any increase in capital flows induced by the commercial policy of either country will harm that country and benefit the other country while at low levels of international investment a tariff increase always harms the country levying the tariff nevertheless an increase in one country s tariff could benefit both countries by alleviating regional distortions in factor allocation if the countries liberalize factor movements within a customs union then conflicts must arise in choosing the level of the common external tariff

lot sizing policies for deteriorating items with expiration dates and partial trade credit to credit risk customers abstract in practice a credit worthy retailer frequently receives a permissible delay on the entire purchase amount without collateral deposits from his her supplier i e an up stream full trade credit by contrast a retailer usually requests his her credit risk customers to pay a fraction of the purchase amount at the time of placing an order and then grants a permissible delay on the remaining balance i e a down stream partial trade credit in addition many products such as blood banks pharmaceuticals fruits vegetables volatile liquids and others deteriorate constantly and have their expiration dates however not many researchers have taken the expiration date of a deteriorating item into consideration the purpose of this paper is to establish optimal lot sizing policies for a retailer who sells a deteriorating item to credit risk customers by offering partial trade credit to reduce his her risk the proposed model is a generalized case of many previous models by applying theorems in pseudo convex fractional functions we can easily prove that the optimal solution not only exists but is also unique moreover we propose three discrimination terms which can easily identify the optimal solution among all possible alternatives finally some numerical examples are presented to highlight the theoretical results and managerial insights

on the harris todaro model with intersectoral migration of labour aspects of labor migration in developing countries are examined using the approach developed by j r harris and m p todaro in particular the author attempts to model the process of labor turnover between the urban unemployed and urban firms and between the rural sector and the urban unemployed the model includes a dynamic system of wage rates and urban unemployment rates annotation

optimal replenishment policies for non instantaneous deteriorating items with stock dependent demand abstract wu et al 2006 an optimal replenishment policy for non instantaneous deteriorating items with stock dependent demand and partial backlogging international journal of production economics 101 369 384 established an inventory model for non instantaneous deteriorating items with stock dependent demand and obtained the optimal replenishment policy in this paper we first amend wu et al s model by changing the objective to maximizing the total profit secondly we set a maximum inventory level in the model to reflect the facts that most retail outlets have limited shelf space thirdly we relax the restriction of zero ending inventory when shortages are not desirable we then establish the theoretical results and provide an algorithm to find the optimal solution finally we present some numerical examples to illustrate the results

optimal dynamic pricing and replenishment cycle for non instantaneous deterioration items with inventory level dependent demand abstract this paper considers a problem of determining the optimal dynamic pricing strategy and replenishment cycle for non instantaneous deteriorating items where the consumer demand depends on the sales price and the quantity of the items displayed in the store for the given replenishment cycle we derive the optimal dynamic pricing strategy by applying pontryagin s maximum principle and then design an effective algorithm to obtain the optimal dynamic pricing strategy and replenishment cycle simultaneously numerical examples are provided to illustrate the effectiveness of the proposed methods and solution procedure furthermore sensitivity analysis of the key system parameters is carried out and some interesting managerial insights are presented

supply chain coordination contracts with inventory level and retail price dependent demand abstract in this paper three unlike coordinating contracts namely i joint rebate contract ii wholesale price discount contract and iii cost sharing contract are proposed for two echelon supply chain coordination perspective under stock and price induced demand it is found analytically that the manufacturer s and the retailer s preferences among three contractual forms are not always aligned by applying bargaining theory it is established that stock elasticity plays an important role to select coordination contract and a threshold value stock elasticity is also determined below which cost sharing contract is not feasible it is also found that the retailer with higher bargaining power always prefers wholesale price discount contract among considered three contracts results are illustrated analytically as well as numerically