Perfect Competition

In his 1987 entry on ‘Perfect Competition’ in The New Palgrave, the author reviewed the question of the perfectness of perfect competition, and gave four alternative formalisations rooted in the so-called Arrow-Debreu-Mckenzie model. That entry is now updated for the second edition to include work done on the subject during the last twenty years. A fresh assessment of this literature is offered, one that emphasises the independence assumption whereby individual agents are not related except through the price system. And it highlights a ‘linguistic turn’ whereby Hayek’s two fundamental papers on ‘division of knowledge’ are seen to have devastating consequences for this research programme.Allocation of Resources; Perfect Competition; Exchange Economy

The Harris-Todaro Hypothesis

The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups.Harris-Todaro; Wages; Labour Economics; Labour Market; Rural to Urban Migration

The Harris-Todaro Hypothesis

The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groupsHarris-Todaro, Wages, Labour Economics, Labour Market, Rural to Urban Migration

The Harris-Todaro Hypothesis

The Harris-Todaro hypothesis replaces the equality of wages by the equality of expected wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups.Harris-Todaro, Wages, labour economics, Labour Market, Rural to Urban Migration

Regional (East-West/North-South) Cooperation and Peter Singer’s Ethics of Globalisation

I open Peter Singer’s One World: The Ethics of Globalization to a ‘local’ and a ‘global’ text, and am thereby led to argue that problems of poverty, inequality, governance, corruption, transparency, tolerance, growth and welfare, and more generally of justice and freedom, be they economic or political, are not the monopoly or ward of a particular region, packages to be pried open by the language of economic theory alone. They rather demand an acknowledgement that an economy is also a society, a polity, a community, a collectivity in short; and a conceptual recognition by agents, albeit embodied with their own needs and desires, that is correspondingly capacious. Thus, to move beyond conception to fruition, theory, of necessity, can hardly ignore values garnered from the past, ethics, and therefore texts, local to the collectivity, that make its past come alive.Globalisation

Perfect Competition

In his 1987 entry on ‘Perfect Competition’ in The New Palgrave, the author reviewed the question of the perfectness of perfect competition, and gave four alternative formalisations rooted in the so-called Arrow-Debreu-Mckenzie model. That entry is now updated for the second edition to include work done on the subject during the last twenty years. A fresh assessment of this literature is offered, one that emphasises the independence assumption whereby individual agents are not related except through the price system. And it highlights a ‘linguistic turn’ whereby Hayek’s two fundamental papers on ‘division of knowledge’ are seen to have devastating consequences for this research programmeAllocation of Resources, Perfect Competition, Exchange Economy