Trade in Health Services in the Presence of Consumption Efficiency Hypothesis

An attempt has been made in this paper to formulate a three-sector general equilibrium model where two sectors produce final traded goods whereas a third sector produces a non-traded final good. It has been referred to the third sector as a non-traded final good producing health sector. In such a set up it has been shown that a movement from a regime of international health capital immobility to a regime of international health capital mobility may lead to an expansion of the health sector in the presence of nutritional efficiency of workers. Apart from that it has also been shown that social welfare of our stylized small open economy will improve.