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Adjustment Costs and Immiserizing Growth in LDCs
Author(s) -
Sarker Sanjib,
Gilbert John,
Oladi Reza
Publication year - 2008
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/j.1467-9361.2008.00480.x
Subject(s) - economics , endowment , capital (architecture) , shock (circulatory) , general equilibrium theory , macroeconomics , monetary economics , medicine , philosophy , archaeology , epistemology , history
Using a general equilibrium model of a small developing economy, the authors demonstrate that the introduction of asymmetric adjustment costs makes the rate of urban employment respond to an exogenous shock in the aggregate capital endowment, raising the possibility of several counter‐intuitive immiserizing growth scenarios.