Why does asset inequality affect unemployment? A study of the demand composition problem

Jean Marie Baland, Debraj Ray

    Research output: Contribution to journalArticle

    Abstract

    This paper is devoted to a general equilibrium analysis of the relationship between the inequality in asset holdings and the aggregate levels of output and employment in a developing economy. Since luxuries and basic goods compete for the use of the same scarce resources, unemployment is concieved as a mechanism whereby the market demand for basic goods can be limited to a sufficiently low level so that the high demand for luxuries can be met. The ambiguous effects of capital accumulation on employment are also examined.

    Original languageEnglish (US)
    Pages (from-to)69-92
    Number of pages24
    JournalJournal of Development Economics
    Volume35
    Issue number1
    DOIs
    StatePublished - 1991

    Fingerprint

    luxuries
    unemployment
    assets
    general equilibrium analysis
    capital accumulation
    demand
    market
    economy
    resource
    resources
    goods
    Luxury
    Unemployment
    Assets

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Why does asset inequality affect unemployment? A study of the demand composition problem. / Baland, Jean Marie; Ray, Debraj.

    In: Journal of Development Economics, Vol. 35, No. 1, 1991, p. 69-92.

    Research output: Contribution to journalArticle

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