A note on the measurement of the slowdown in total factor productivity |
| |
| Authors: | Uri Zohar Israel Luski |
| |
| Affiliation: | 1. Department of Economics, Faculty of Administrative Studies , York University and Director, Center for Research in Productivity and Structural Change;2. Department of Economics, and the Monaster Center for Economic Research , Ben-Gurion University , Beer Sheva85 105 Po Box 654, IsraelThis paper was written while the latter author was a visiting professor at York University. |
| |
| Abstract: | Investigation of foreign exchange control generally focuses on the black market in currencies and the resultant welfare loss to the country under exchange control. But very little attempt has been made to formulate the internal income transfer from foreign exchange earners who choose not to resort to black market, to importers who receive the foreign exchange at less than free market rate. This paper quantifies such measures of income transfer as importer's cost savings, exporter's income transfer, and the transaction cost loss of the market. A case study is developed using the 1951–74 export figures of the state of Kerala in India, showing that the exchange-earning pure or net exporter pays a hidden subsidy to the exchange-consuming importer; and by extension, an exchange-earning agricultural region of a less developed country subsidizes the import-consuming industrial sector of that country. |
| |
| Keywords: | |
|
|
