Ira Gang
Rutgers University
Department of Economics
E-mail: gang@economics.rutgers.edu
Item Number: [J16]
Title: Subsidy Policies with Capital Accumulation: Maintaining Employment
Levels
Abstract: We study a dual economy model of growth and unemployment
in the presence of Harris-Todaro type labor migration. The model is
a discrete time model of economic growth with given population but endogenous
migration of labor. The economy tries to reach "development" in the
quickest possible time while not allowing unemployment to rise above a `socially
acceptable' level. We characterize situations under which maximizing
the accumulation of capital in each period is optimal. We also study
how particular taxes and subsidies affect unemployment and capital accumulation.
Finally, we show that a higher initial capital stock does not necessarily
mean a quicker attainment of self-sustained full employment.
Reference: Bhaskar Dutta, Ira N. Gang and Shubhashis Gangopadhyay,
Subsidy Policies with Capital Accumulation: Maintaining Employment Levels,
Journal of Population Economics, 2 (1989) 301-318.
Co-Author Information:
Bhaskar Dutta
University of Warwick
E-Mail:
Shubhashis Gangopadhyay
India Development Foundation
Email: shubg@vsnl.com
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