Foreign enclaves and economic development: A theoretical analysis |
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Authors: | Kausik Gupta Manash R. Gupta |
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Affiliation: | (1) Present address: Department of Economics, Presidency College, 86/1 College Street, 700 073 Calcutta, India;(2) Present address: Department of Economics, Jadavpur University, 700 032 Calcutta, India |
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Abstract: | We consider an urban foreign enclave with sector-specific foreign capital in an otherwise mobile-capital Harris-Todaro model. We consider the taxation of foreign capital. A dynamic version of this model is considered. The long-run equilibrium and the comparative steady-state effects are analyzed. We get some interesting effects of reduction in tax rate on foreign capital on the short-run and the long-run equilibrium levels of domestic factor income and national income under some meaningful conditions. |
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Keywords: | foreign enclave migration national income tax on foreign capital long-run equilibrium comparative steady state |
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