Macroeconomic policy, investment, and urban unemployment in less-developed countries
The two-sector Harris-Todaro model, extended to include a government sector and aggregate demand, is used to analyze the effects on output, prices, and employment of policies designed to mitigate urban unemployment. An increase in aggregate demand will be inflationary even though output will increase. Government job creation will be inflationary, will stimulate manufacturing output, but may result in a decrease in agricultural output. Investment in agriculture will increase agricultural output, decrease manufacturing output, and decrease price level. Investment in manufacturing results in an increase in manufacturing output, and agricultural output and employment will decline and prices will fall. 16 references.
- Research Organization:
- Pennsylvania State Univ., University Park
- OSTI ID:
- 5286845
- Journal Information:
- Am. J. Agric. Econ.; (United States), Vol. 60:1
- Country of Publication:
- United States
- Language:
- English
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POLICY AND ECONOMY
DEVELOPING COUNTRIES
EMPLOYMENT
URBAN AREAS
SIMULATION
AGRICULTURE
CHARGES
COMMODITIES
DEMAND FACTORS
ECONOMIC GROWTH
ECONOMICS
INCOME
INVESTMENT
MANUFACTURING
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