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Immiserizing Growth and the Metzler Paradox in the Ricardian Model

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  • David Collie

Abstract

Conditions for the occurrence of immiserizing growth and the Metzler paradox are analysed in the Ricardian model when consumers in the foreign country have Leontief preferences while consumers in the home country have Cobb-Douglas preferences. By using specific functional forms, the conditions for the occurrence of the two paradoxes are defined in terms of the exogenous parameters of the model rather than endogenous variables such as the foreign import demand elasticity in the conditions of Bhagwati (1958) and Metzler (1949a, b). It is shown that the simultaneous occurrence of both paradoxical results is possible for some parameter values.

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  • David Collie, 2012. "Immiserizing Growth and the Metzler Paradox in the Ricardian Model," International Economic Journal, Taylor & Francis Journals, vol. 26(1), pages 141-154, November.
    • Handle: RePEc:taf:intecj:v:26:y:2012:i:1:p:141-154
    DOI: 10.1080/10168737.2010.538429
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    1. Jones, Ronald W, 1969. "Tariffs and Trade in General Equilibrium: Comment," American Economic Review, American Economic Association, vol. 59(3), pages 418-424, June.
    2. Jones, Ronald W, 1985. "Income Effects and Paradoxes in the Theory of International Trade," Economic Journal, Royal Economic Society, vol. 95(378), pages 330-344, June.
    3. repec:bla:econom:v:42:y:1975:i:167:p:319-26 is not listed on IDEAS
    4. Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(3), pages 201-205.
    5. Lloyd A. Metzler, 1949. "Tariffs, International Demand, and Domestic Prices," Journal of Political Economy, University of Chicago Press, vol. 57(4), pages 345-345.
    6. Lloyd A. Metzler, 1949. "Tariffs, the Terms of Trade, and the Distribution of National Income," Journal of Political Economy, University of Chicago Press, vol. 57(1), pages 1-1.
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    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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