RE: investment and unemployment

[paul davidson <pdavidson@xxxxxxx>]

At 09:42 AM 4/10/00 , you wrote:
> >Absolutely correct. Comparative advantage for the open economy is the
> >equivalent of Says Law for the closed economy.
>
> Paul.
> Any chance of providing a few references of worthy and readable articles in
> relation to this for those of us keen to follow it up.
>
> Cheers
> Adam


Yes.  The simplist example is presented in a "Letter to the Editor"
published in the December 20, 1997 - January 2, 1998 issue of THE ECONOMIST.

The theoretical argument is developed in : "P. Davidson's "Global Macro
Policies For Reducing Persistent High Unemployment Rates in OECD Nations",
published in   MACROECONOMIC CAUSES OF UNEMPLOYMENT: DIAGNOSIS AND POLICY
RECOMMENDATIONS , edited by W. Filc and C. Kohler (Berlin, Duncker &
Humboldt, 1999).


also see Will Milberg's "Globalization And International Compertitiveness"
in IMPROVING THE GLOBAL ECONOMY  edited by P. Davidson and J. A. Kregel
(Elgar, Cheltenham , 1997).
  Milberg provides some interesting empirical data on "Globalization and
the Nature of International Trade" . He also shows that with international
factor mobility (especially capital)  , comparative advantage is not relevant.

Milberg also points out that this factor mobility and other forces , e.g.,
less than global full employment, trade in intermediate goods, etc,
vitiating the applicability of comparative advantage has been recognized,
or t least mentioned, in the mainstream literature but then quickly covered
up.-- e.g.,

R. Caves "MULTINATIONAL ENTERPRISE AND ECONOMIC ANALYSIS, Cambridge
University Press, 1982, p. 55.

W. A. Darity, "The Hume Process, Laws of Returns, and the Annglo-Portugese
Trade", SOUTHERN ECONOMIC JOURNAL, 1987

A. Deardorff, "Weak Links in The Chain of Comparative Advantage" JOURNAL OF
INTERNATIONAL ECONOMICS, vol. 9. 1979, pp. 197-200

R. Jones, "Comarative and Absolute Adnavtage",   SCHWEIZERISCHE ZEITSCHRIFT
FUR VOLKSWIRTSHAFT UND STATSTIK, 1980, pp. 235-60.

Hope this is of some help.

Paul