MIDDLE EAST TECHNICAL UNIVERSITY

Department of Economics Seminar Series 

 

 

"Labor-Eliminating Technological Progress and Foreign Direct Investment"

 

by

 

Onur A. Koska

(University of Canterbury)

 

 

Date: December 23,  2022 (Friday)

Time: 14:00

 

F106

FEAS - A Building


Abstract

Capital scarce developing countries heavily depend on the inflow of foreign direct investment to sustain economic growth. However, if a developing economy experiences labor-eliminating technical progress, such inflow of capital may replace labor in manufacturing. This may compel policy makers to advocate for a foreign investment tax to restrict the inflow of capital into manufacturing as the sector faces a labor-eliminating technical change. Contrary to this view, we show that in such an environment wages will rise and any policy that restricts inflow of foreign capital does not benefit workers.



Last Updated:
18/12/2022 - 21:53