In a brilliant and pioneering paper, John Harris and Michael Todaro introduced a model with two sectors, manufacturing (urban) and agriculture (rural), a (sticky) minimum wage in manufacturing and consequent unemployment. They also introduced a labor allocation mechanism under which, instead of the usual equalization of actual wages, the actual rural wage was equated with the expected urban wage; the latter was defined as the (sticky) minimum wage weighted by the rate of employment, so that, unlike in the standard rigid-wage models of trade theory, the unemployment resulting from the minimum wage is to be construed as specific to the urban sector. In the context of this model, Harris and Todaro analyze two policies: a wage subsidy policy in the manufacturing sector and a labor-mobility restriction policy. They argue that the former, as well as the latter, can be used to improve welfare, defined as a function of available goods in the usual way; but that, to attain the optimal first best solution, both policies are necessary.

The theory of commercial policy has recently addressed three phenomena: (i) tariff (quota) seeking or lobbying by potential beneficiaries for the imposition of a tariff (quota), (ii) tariff (quota) evasion, and (iii) rent seeking or lobbying for getting an allocation of the import quota to earn the rents generated. Revenue seeking or lobbying to secure a share in the disposition of the tariff revenues is analyzed here. it is shown that revenue seeking may, even for a small country, result in a reduction in importable output. Furthermore, revenue seeking may be welfare improving. Rent seeking may be welfare improving as well.

The paper addresses the problem of deriving shadow prices for use in project evaluation when the existing allocation is characterized by ad valorem trade distortions. The analysis is used to clarify and resolve the long-standing debate among effective-rate-of-protection and domestic-resource-cost proponents as to the respective merits of their measures as methods of project evaluation. The derivation of shadow factor prices is then extended to three major factor market imperfections familiar from extensive trade-theoretic analysis.

D. Levhari, T. N. Srinivasan; Optimum Savings Under Uncertainty: A Correction, The Review of Economic Studies, Volume 44, Issue 1, 1 February 1977, Pages 1

Journal Article Optimal Savings under Uncertainty Get access Jerusalem D. Levhari, Jerusalem D. Levhari The Hebrew University Search for other works by this author on: Oxford Academic Google Scholar T. N. Srinivasan T. N. Srinivasan Indian Statistical Institute Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 36, Issue 2, April 1969, Pages 153–163, https://doi.org/10.2307/2296834 Published: 01 April 1969 Article history Received: 30 April 1968 Revision received: 26 August 1968 Published: 01 April 1969

Journal Article Optimal Intervention to Achieve Non-Economic Objectives Get access J. N. Bhagwati, J. N. Bhagwati Indian Statistical InstituteMassachusetts Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar T. N. Srinivasan T. N. Srinivasan Indian Statistical Institute Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 36, Issue 1, January 1969, Pages 27–38, https://doi.org/10.2307/2296340 Published: 01 January 1969 Article history Received: 12 February 1968 Revision received: 18 September 1968 Published: 01 January 1969