Comparative Advantage and Development Policy

In the great revival of interest in economic development that has marked the past decade, attention has centered on two main questions: first, what determines the over-all rate of economic advance?; second, what is the optimal allocation of given resources to promote growth? Analysis of the growth rate has relied mainly on the Keynesian tools and has produced a multiplicity of aggregate growth models. The second question, however, reopens more ancient economic issues, and their analysis must start from the classical and neo-classical solutions. Only very recently have the two types of discussion tended to come together in the more comprehensive framework of general equilibrium analysis.