Efficiency, growth and exchange control regimes
Abstract
THE two-sector trade model, with
growth explicitly built in, is used as the
basic analytical framework in this study.
The impact of protectionist policies on
static and dynamic efficiency is evaluat
ed in the light of the experiences of
eleven countries' studied the Natio
nal Bureau of Economic Research Pro
ject on Foreign T'rade Regimes and
Economic Development. The main as
sumptions underlying the model are
constant returns to scale, factor mobi
lity across sectors, infinite foreign elas
ticities of demand for exports and supply
of imports, no transportation costs, pure
competition, infinite elasticity of sub
stitution between domestically produc
ed and imported goods, and a savings
function dependent on the distribution
of income. Given these assumptions
and the world terms of trade, the volu
me and composition of production and
trade, the functional distribution of
income, and the volume of savings, are
determined
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