International Trade Theory in a Developing World: by Douglas Hagued, Roy Harrod, Douglas Hague

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By Douglas Hagued, Roy Harrod, Douglas Hague

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Modities. 33 International Trade Theory in a Developing World items of consumption are meat and cereals. From 1948-52 to 19571959, the volume of net imports of the sample commodities rose proportionately rather less than consumption (one-fifth as against one-quarter), while, owing to a sharper fall in import unit values, the rise in the value of net food imports was only marginal (see Table IV). The fall in the import-content of consumption was due in part to a shift in the pattern of demand, and in part to substitution of home output for imports.

Jones, 'Variable Labour Supply and the Theory of International Trade', 1960, unpublished; J. Bhagwati and H. G. Johnson, 'A Generalized Theory of the Effects of Tariffs on the Terms of Trade', Oxford Economic Papers, Vol. 13 (Oct. 1961), pp. 1-29. 2 J. Bhagwati and H. G. Johnson, 'A Generalized Theory of the Effects of Tariffs on the Terms of Trade', loc. cit. 3 M. C. Kemp, 'The Gain from International Trade', 1960, unpublished. 4 One other contribution of interest should be mentioned : Kemp's analysis of the effect on income distribution in the context of Keynesian under-employment, in his article, 'Tariffs, Income and Distribution', Quarterly JourMl of Economics, Vol.

It must be admitted, however, that these models, in discussing capital accumulation, abstract from those very difficulties that arise with the phenomenon of time and multi-period optimality. (i) Since the increment in capital stock is autonomous, the question of the optimality of the sa'Ving decisions that generated the total savings and investment is evaded. (ii) Since capital is further assumed to be homogeneous, one also eliminates the problem of inter-temporal optimality that arises with the fact that the current period's composition of the capital 1 G.

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