Project Appraisal, Foreign Exchange Constraints and Shadow Exchange Rates

I have been asked to discuss certain aspects of some recently proposed methodologies for project appraisal. At the same time Professor Stone did not fail to remind me of the title of this conference. Accordingly, my task, as I see it, is to present an account of a few issues that have been raised in recent writings on project evaluation, and to pay particular attention to some of the measurement problems that appear rather naturally to arise in the course of conducting a project appraisal exercise. This will then lead me to discuss several approximation methods that have been suggested for measuring the social values of various goods and services involved in an industrial project.