Dynamic effects of trade liberalization and currency overvaluation under conditions of increasing returns

Article Abstract:

A number of developing economies have opened up to international trade as part of a wider move toward market-oriented policies. Assumptions can be used to simplify the analysis, such as perfectly elastic demand for traded goods, though sluggish wage adjustment is assumed in the sector of traded goods, as are increasing returns to scale. Returns to scale mean that multiple equilibria are possible, and this may mean that the economy moves away from the corridor of stability, and capital stock contraction can occur as a cumulative process.

Administration of General Economic Programs, Multilateral Trade Negotiations, Economic aspects, Developing countries, International relations, Industrialized countries, International trade, Trade negotiations

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Economic divergence and institutional change: some observations on the convergence literature

Article Abstract:

A study was conducted to investigate some potential ramifications of the relation between economic performance and political and institutional variables. It is argued that poor economic performance such as unstable growth paths and divergent per capita incomes in a country will likely lead to institutional turbulence and political intervention. The empirical evidence on convergence represents both the rapidity of the convergence of an economy to its conditional equilibrium and the changes in the conditional equilibrium itself.

Economics, Research and Development in the Social Sciences and Humanities, Case studies, Political aspects, Institutional economics, Economic stabilization, Economic stagnation

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Fairness as a source of hysteresis in employment and relative wages

Article Abstract:

The impact of fair wages on workers' employment is examined.

United States, Labor force information, Analysis, Employment, Workers, Pay equity

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