Premium
A GENERAL EQUILIBRIUM ANALYSIS OF RURAL‐URBAN MIGRATION UNDER UNCERTAINTY
Author(s) -
Beladi Hamid,
Ingene Charles A.
Publication year - 1994
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1994.tb00857.x
Subject(s) - economics , neutrality , certainty , agriculture , unemployment , profit (economics) , general equilibrium theory , relative price , microeconomics , macroeconomics , geography , philosophy , archaeology , epistemology
. This paper analyzes the implications of an exogenous shift in relative prices for an economy that suffers from urban unemployment, as well as uncertainty, in the agricultural sector. Among other things, we show that with agricultural uncertainty, an exogenous shift in relative prices will lower agricultural profit. This result is in sharp contrast with the conventional case of risk‐neutrality or certainty where agricultural profit is unaffected by changes in the terms of trade.