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Revisiting the Informal Sector - A General Equilibrium Approach (Hardcover, 2010 ed.)
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Revisiting the Informal Sector - A General Equilibrium Approach (Hardcover, 2010 ed.)
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Informal sector has emerged as a critical element in the
development process of
theentiredevelopingworld.Itisnowwellrecognisedthatsuchasectorprovides
employmenttothemajorityoftheworkforceinthepoorcountries.Sometimesthe
shareofemploymentintheseactivitiesgoeswaybeyond50%oftotalemployment.
Informalusuallyreferstoextra-legalandnon-recordedeconomicactivitiesandcan
captureawholearrayofdiverseoccupations,
productsandservices.Development
Economicsasadisciplinehasnottreatedsuchtopicswithadequatereverence.Text
booksdealingwitheconomicdevelopmentdonothaveexclusivesectionsdevoted
to the discussion of growth, dynamics and sustenance of informal
activities. In particular how informal transactions in?uence
employment, output, productivity,
wagesandenvironmentisseldomdiscussedformallyintermsofanalyticalm-
els. Informal sector does not operate in a vacuum. Thus the general
equilibrium linkages involving the informal and formal activities
also need to be explored in
detailifdevelopmentpoliciesaretobeproperlyevaluated.Thisvolumesuccessfully
addressesboththeseissuesanddoesitwithcompetenceandrigour.
Authorsofthisvolumehavebeenworkingonthefrontiersofdevelopmentpolicy
researchinthecontextofopendevelopingeconomies,
focusingmainlyongeneral
equilibriumimplicationsofsuchpolicies.Infactoneoftheauthorshaswrittenat
length on informal credit market. Sustained research programme on
such a topic
ofgreatsigni?cancelendscredibilitytothisvolume.Itisalsohightimethats-
eralinternationalpublicationsoftheauthorsinrelatedareasareputtogetherina
comprehensivemonograph.Iamde?nitesuchavolumewillbeveryhelpfultos-
dents, researchers, policy makers and anyone seriously interested
in development economics. CentreforStudiesinSocialSciences,
Calcutta, India SugataMarjit vii Preface In the last few decades
informal sector has drawn serious cognizance among economists in
view of its role in developing economies. The earlier contention
that the informal sector epitomises the 'residual' sector or a
sector of last resort has been belied by a plethora of evidences
indicating its dynamic character and its instrumental role in
ameliorating unemployment and in propelling the dev- oping
economies towards growth and prosperity. This conceptual
metamorphosis regarding the informal sector has stimulated revived
interest in the phenomenon
amongdevelopmenteconomists.Thereexistmanybooksthatdealwiththesector
analyticallyorempirically. However, the theoretical analysis of the
different aspects of the sector is equally important, especially
for formulation of appropriate policy prescriptions.
Comparativestaticresults, inmanycases,
divergefromtheconventionalresults.We
noticedthatalthoughvariousauthorshavepublishedtheoreticalpapersindifferent
journals, there are very few books that try to understand the
informal sector in a
theoreticalframework.Thislacunainculcatedinusaninteresttowritethisbook.
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