PURE JOINT PRODUCTION,INCOME DISTRIBUTION,EMPLOYMENT AND THE EXCHANGE RATE

This paper deals with an open economy with heterogeneous capital and linear processes of pure joint production from a long‐period perspective. It is shown that: (1) an effective exchange rate change has ambiguous effects on the distribution of income and the competitiveness of domestic output; (2) the matrix of super‐multipliers linking exports to gross output is not always uniquely defined; and (3) the volume of exports and the volume of total employment may be inversely related, even if prices and distribution do not change.