Capital Mobility, Tariff, Unemployment and the Real Exchange Rate
So far it has been assumed that capital is not internationally mobile. In this chapter we relax this assumption. Recall that in the GHT model, the factors were assumed to be mobile in the following manner: no international mobility of factors; urban capital was assumed to be mobile within the urban region; similarly rural capital was only mobile in the rural region and labour was assumed to be totally mobile among all regions and sectors.
KeywordsReal Exchange Rate Relative Price Urban Region Foreign Capital Capital Mobility
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- 1.Some of the papers in this area include: Brecher and Diaz-Alejandro (1977), Bhagwati and Brecher (1981) and Hatzipanayotou and Michel (1992).Google Scholar
- 2.See for example, Chichi lniski (1980)(1983), Leontief (1936), Gale (1974), Bhagwati and Brecher (1982), Leonard and Manning (1983), Bhagwati, Brecher and Hatta (1983) and Fluckiger (1987).Google Scholar