This study examines why rural-urban labor migration persists and is even increasing in many developing nations despite the existence of positive marginal products in agriculture and significant levels of urban unemployment. Conventional economic models have difficulty reconciling rational behavioral explanations with growing levels of urban unemployment in the absence of absolute labor redundancy in the overall economy. This paper formulates a 2-sector model of rural-urban migration which recognizes the existence of a politically determined minimum urban wage at levels substantially higher than agricultural earnings. The distinguishing feature of the model is that migration proceeds in response to urban-rural differences in expected earnings with the urban employment rate acting as an equilibrating force on such migration. The overall model is used to demonstrate 1) that given the politically determined high minimum wage the continued existence of rural-urban migration in spite of substantial urban unemployment represents an economically rational choice on the part of the individual migrants and 2) that economists standard policy recommendation of generating urban employment opportunities through the use of shadow prices implemented by means of wage subsidies or direct government hiring may lead to a worsening of the urban unemployment problem. Welfare implications of alternative policies associated with various programs to retain rural population are assessed under the assumption that the full wage flexibility suggested by economic theory is politically unfeasible; it is concluded that in the absence of wage flexibility an optimal policy would include both partial wage subsidies or direct government employment and measures to restrict free migration. The basic model is a 2-sector internal trade model with unemployment the 2 sectors being the permanent urban sector which specializes in production of manufactured goods and the rural which either uses all available labor to produce agricultural goods or exports part of the labor to the urban sector. It is assumed that the typical migrant retains his ties to the rural sector but the assumption is not necessary for the argument

Multinational corporations are a substitute for the market as a method of organizing international exchange. They are . . . islands of conscious power in an ocean of unconscious cooperation, to use D. H. Robertson's phrase.1 This essay examines some of the contradictions of this latest stage in the development of private business enterprise. At the outset, we should note that the multinational corporation raises more questions than theory can answer. Multinational corporations are typically large firms operating in imperfect markets and the question of their efficiency is a question of the efficiency of oligopolistic decision making, an area where much of welfare economics breaks down, especially the proposition that competition allocates resources efficiently and that there is a harmony between private profit maximization and the general interest. Moreover, multinational corporations bring into high definition such social and political problems as want creation, alienation, domination, and the relationship or interface between corporations and national states (including the question of imperialism), which cannot be analyzed in purely economic terms.

This paper incorporates land in a neoclassical model of economic growth. Saving and investment functions are modified due to the existence of land and these modifications yield some interesting results concerning the rate of capital accumulation: First, the maximum consumption path is unattainable; and second, the rate of capital accumulation depends negatively on both the equilibrium rate of growth and the relative share of land in national income. The latter result is a quantification of an effect claimed by many observers to characterize certain underdeveloped countries; namely, that saving motives are satisfied by land holdings (and the increase in real land prices) rather than by capital accumulation. Equilibrium in neoclassical growth models with two assets was first examined by James Tobin (1965). Most of the subsequent work on two asset models has continued to use Tobin's assumption that the asset other than capital is government debt and that its importance for equilibrium growth obtains solely from its role