ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Liberalisation, Unemployment and Capital Reform

Liberalisation, Unemployment and Capital Reform Ranjit Sau The finance minister has outlined a model of economic development that envisages liberalisation and globalisation of the economy. Asset distribution in India is very skewed. Using the efficiency wage theory this paper proves with simple geometry that a competitive equilibrium in an economy with highly unequal asset holding will entail involuntary unemployment of the assetless poor. Although both are competitive, the equilibrium here sharply differs from that of an Arrow-Debreu economy which presumes sufficient assets for all agents.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top