ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Efficiency, Growth and Exchange Control Regimes

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 evaluated in the light of the experiences of eleven countries1 studied in the National Bureau of Economic Research Project on Korrign Trade Regimes and Economic Development. The main assumptions underlying the model are constant returns to scale, factor mobility across sectors, infinite foreign elasticities of demand for exports and supply of imports, no transportation costs, pun; competition, infinite clasticity of substitution between domestically produced and imported goods, and a savings function dependent on the distribution of income. Given these assumptions and the world terms of trade, the volume and composition of production and trade, the functional distribution of income, and the volume of savings, are determined.

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