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Previous analyses of trade and development problems of U. S. agriculture have neglected the role of exchange rate policy. An attempt is made to understand the role of the exchange rate on these problems in a non-parametric fashion by means of a model of induced technical change. It is argued that the overvaluation of the dollar and the policy measures to combat it aggravated the adjustment problems of U. S. agriculture, especially during the 1950's, and resulted in shifting an important share of the benefits of technical change to the consumer. Moreover the recent devaluation of the dollar constitutes an important structural change for U. S. agriculture.

The recent literature on the theory of tariffs and trade restrictions has emphasized the optimality of free trade policies for both developed and develop¬ing countries. There are exceptional cases in which trade restrictions can be justified—when, for example, a country has monopoly power in trade or when certain "second-best" conditions are met.1 In general, however, it is believed that a country which imposes restrictions on its trade suffers a decline in real income. A number of studies for both developed and developing countries have estimated the economic benefits that would accrue to these countries from the elimination of all trade restrictions.* The purpose of this paper is to provide a method for measuring the economic benefits that a country would receive as the result of the elimination of a country-specific restriction while maintaining all restrictions applying to commodities. Methods of measuring the static gains to a country removing commodity restrictions are already well known and need no further elaboration. The elimination of a country-specific restriction on trade, however, presents a slightly different problem of measurement since the liberalization may affect only one portion of the country's trade and give rise to foreign exchange savings as well as the familiar gains from reduced producers' inefficiency and increased consumers' surplus.

Foreign exchange shortages have been considered by many economists as the effective restraint to growth in the developing world. This is especially the case insofar as less developed countries (LDC's) are limited in their capacity to purchase imports from abroad that are needed to complement domestic factors of production. Exports obviously play an important role in this context since they constitute the primary source of foreign exchange for most LDC's. It is for this reason that a number of projections of future export earnings of LDC's have been made. These projections are presumably useful in decision making of various kinds. However, there is not much evidence that would indicate ways in which the projections have been or might conceivably be used. The purpose of this paper, accordingly, is to examine two such possible uses of export projections in connection with: (i) the allocation of foreign aid by donor countries among LDC's; and (2) the allocation of resources over time in individual LDC's.

The role of foreign investment in the process of economic development is an issue which has been subjected to lengthy and profound discussion.' This paper is aimed at exploring one aspect of the controversy, that is, the nature of any contributions foreign investment can make to the development of manufactured exports from developing countries, and the conditions-external and internal-under which any such contributions can be achieved.2

V IRTUALLY every textbook on international trade contains a discussion and/or derivation of the optimum tariff for a country with monopoly power in world trade. Invariably these are treatments of aggregate tariff policy. Little or no work has been done to explain the infra-structure of tariffs within a given country or to explain in what respects tariffs might be expected to be similar across countries. Some papers have explored the impact of tariffs and tariff changes on domestic welfare, labor's share of income and trade prospects for developing countries. Contributions to this literature include Anderson (1972), Balassa (1965, 1967a, 1967b, 1971); Ball (1967); Basevi (1966, 1968); Cohen and Sisler (1971); Kreinen (1961, 1967); Mitchell (1970); Travis (1968) and many others. Yet, none of these studies has offered a well specified analytical framework that would permit a systematic investigation of testable hypotheses concerning the relative protection of industries: within and across countries. Instead, many of these papers have relied upon intuitive but ad hoc explanations of the data they presented. The purpose of this paper is two-fold. First, we will begin a systematic inquiry into the determinants of tariff policy at the industry level by developing a simple model based upon profit maximizing behavior in section II. Secondly, we will use the derivations of section II, along with data from previous studies by Balassa (1965, 1971) to demonstrate that a number of the ad hoc explanations of tariff data by previous authors are consistent with our simple .model. In addition, we will develop and test new hypotheses based on the analytical developments of section II. For example, we will be able to explain the pyramiding of tariffs in developed and less developed countries, the pattern of the rank correlations between effective protective rates for countries at similar and different levels of economic development, the greater variation in tariffs on primary products than on manufactured goods in developing countries, the greater variation and average value of tariffs on manufactured goods in developing countries and, finally, the relationship between the skill intensity of production and tariff protection in manufacturing in both developed and developing countries. Perhaps, most important of all our results is the fact that, by demonstrating that ad hoc explanations of previous studies are consistent with our explicit formulation of tariff determination at the industry level, we facilitate the development of future advances in this area.

This paper presents a regional multicommodity economic model of the world oil market. The four sectors of the model are crude production, transportation, refining, and consumption of products. The regions studied are the United States, Canada, Latin America, Europe, the Middle East and Africa, and Asia. In the model the exogenous variables include the regional supply and demand equations, the technology of refining, and government policy variables. The scope of these variables gives the model sufficient information to determine the levels of consumption, production, and price for each commodity in each region, the pattern of world trade flows, and the refinery capital structure and output in each region. The consequences of monopolistic behavior -- implemented through the producing country cartel, OPEC -- can be studied through the simulation of the effects of changes in the export tax. Use of this model shows that the price increases for crude oil which occurred in late 1973 are not likely to persist because the largest producing region -- the Persian Gulf and North Africa -- would have the problem of allocating reduced production levels among the individual countries.

Events of the past two years, specifically the agricultural price explosion of 1973, have strongly emphasized the growing interdependency of countries in the production, consumption and trade in agricultural products. The illusion of a closed agricultural economy has been dealt a series of severe blows. The world monetary crisis, the dollar devaluations, and sharply increased foreign demand for U.S. commodities have suggested that there is a single world market for basic commodities.

This paper represents an attempt to pinpoint the factors influencing the shape of tariff walls in the Common Market countries. Specifically, it tests the correlation between tariffs and factor intensities of the protected industries; it is found that there is a strong positive correlation between tariff and unskilled labour intensiveness. However, this correlation may be concealed if other factors affecting commercial policy are not taken into consideration (such as the desire for self-sufficiency in food and energy and the determination to foster research- and development-intensive industries) or the use of alternative means of promotion (subsidies) is neglected.

There has been a considerable controversy in the Indian economic literature regarding the relative merits of direct foreign investment and official development assistance. No systematic study1, however, is available on the effects of direct foreign investment in India. Therefore this article discusses this subject for the period 1951–66.

“The weakening in the U.S. balance of payments and the ultimate deficit which appeared in our merchandise trade account in 1971 and 1972 occurred not because of petroleum or any other class of imports, but because the dollar had become substantially overvalued against the currencies of other major industrial countries of the world.” Leif H. Olsen is senior vice president and economist of the First National City Bank, New York. This article is based on a speech he presented to the annual meeting of the Independent Natural Gas Association of America, Scottsdale, Arizona, in September 1973.

Tax rebating has recently been given heavy emphasis as a means of improving a country's balance of payments and recommendations have been made for the substitution of taxes that are fully rebated on exports for taxes that are only partly rebated or are not rebated at all. This paper gives the conditions under which tax rebating would improve a country's balance of payments. It shows that whether tax rebating of exports improves the balance of payments or not depends upon the size of the price elasticity and of the import component of exports. It then shows that, with the available evidence concerning the size of the price elasticities and of the import components in a number of European countries, export rebating may harm rather than improve their balances of payments.

External seigniorage is defined as the advantage resulting, for a country, from the fact that it may impose the use of its own currency on seemingly independent countries. In 1960, the United States had to resort to this device as a consequence of the dollar glut. Since then, European countries were gradually compelled to hold on to 20 billion dollars, receiving short-term interest rates for what were in fact long-term loans to America — with capital and interest losses over 13 years of 9 billions of 1972 dollars. This will stop only when the Europeans create and use their common currency.

Indirect taxes have always occupied a dominant position in the tax structure of Pakistan. This has worried economists of various inclinations because of the widespread belief that indirect taxes tend to be regressive and interfere with efficient resource allocations. The resource allocations effects of such taxes is not considered in this paper which restricts itself to an analysis of the incidence of excise duties on tobacco products and petroleum products. Prior to the levy of export duties in 1972, two of the most important sources of indirect taxes were excise and import duties on petroleum and tobacco products. Together these groups accounted for roughly 60 per cent of excise duty collec¬tions and one third of indirect taxes in 1969-70. Moreover, additional taxes levied year after year seldom by-pass these two groups. A detailed analysis of the incidence of these two taxes will, therefore, constitute a necessary and important feature of the incidence of taxes in Pakistan.

When this study was originally prepared nearly thirty years ago, it was part of a larger government memorandum. As such it was written within a framework of exploring problems of economic relations with the USSR after the war, with the expectation of a large and mutually beneficial trade in mind. At the time, I presented a general analysis of these problems in a longish pamphlet. I was unable, however, in that publication to touch upon the problem of Soviet policies on, and relations with, international cartels, because the government document in question was classified as “secret,” as was the information I had obtained in the course of preparing it. The recent declassification of that document by both the Department of State and the Department of Justice (from whose Antitrust Division a large body of valuable information had been received) has caused me to consider publication of the material on the four case studies of Soviet participation in international cartels—to wit, the cases concerning matches, phosphates, potash, and platinum. I feel that such publication is warranted essentially for two reasons.

In economic theory, there are many reasons why exports may serve as an "engine of growth" to the rest of the economy. Economies of scale, backward and forward linkages, and increases in competitiveness of domestic production are some of the reasons given. In Korea's case during the post-World War II period, the three predominant developments in the external sector which have attracted most attention are: (a) the spectacular growth of exports, (b) the persistent increase of capital goods imports over time, and (c) the substantial and increasing amount of foreign capital inflow.

As Americans celebrated Christmas in 1972 they read about national disasters in Nicaragua and North Vietnam. The capitals of both countries had to be evacuated. Communications and power facilities were crippled. Hospital complexes were reduced to rubble. An earthquake caused the damage in Nicaragua; American bombers were responsible in North Vietnam.In the wake of worldwide humanitarian concern for both countries, the initial response of the United States was to announce the release of paramedical teams and a mobile field hospital for Nicaragua and to deny that the Bach Mai hospital facility in Hanoi existed and that it had been hit by American planes.

Economic development can be not only facilitated but its pace can be quickened by the appropriate development of the financial system. This paper indicates the broad contours of a set of financial policies essential for the evolution of a sound and well-integrated financial system and emphasizes the role of a central bank not only as a regulator but also as a promoter of such a system. It is strange that this dual role of central banks is not sufficiently appreciated by the international institutions like the World Bank and the International Monetary Fund.

Relative comparative advantage is measured by contrasting country ratios of the domestic resource costs per unit of foreign exchange earned by exporting coffee to the exchange rate. Uganda, Ethiopia, and Tanzania have strong relative comparative advantages in coffee vis-à-vis the Ivory Coast, largely because of higher opportunity costs of Ivoirian factors.

The paper attempts to provide some evidence on the nature of the relationship between country size and commodity and geographic concentration in trade, and on the effects of economic development and dependence on trade on this relationship. It suggests that the inverse relationship between country size and trade concentration is not as strong as a priori reasoning suggests; that there is no association between export concentration and economic development, nor between export concentration and dependence on trade; and that neither the dependence on trade of small countries should lead to extra export concentration, nor their export concentration should mean an impediment to economic development.

The author discusses the energy crisis, effects on the economy, and the application of electric power generation to make better use of primary fuels.

The principal arguments for and against the link with regard to its effects on the adjustment process are evaluated. While the direct enhancement of demand inflation is sometimes exaggerated, the greater uncertainty of individual countries of long-run adequacy of reserve growth under a link would aggravate the inconsistency between current account aims and thereby lead to increased exchange rate competition and restrictions and/or diminished aid. These effects might be mitigated somewhat by higher SDR creation, but then chiefly more inflation and greater external imbalance would ensue. It is concluded that the link would impair the environment for adjustment.

Gesamtwirtschaftliche Au\enhandelsgewinne bei unvollkommenen FaktormArkten. — In diesem Aufsatz werden die Standardtheoreme uber die Vorteilhaftigkeit des Au\enhandels unter der Annahme untersucht, da\ auf beiden FaktormArkten (fur Kapital und Arbeit) intersektorale Faktorpreisunterschiede bestehen.

The RAS method of updating a trade flow matrix is extended into the third dimension of commodity trade. The model is used to update the 1959 trade flows to 1965 for the EFTA countries. Measures are then derived to estimate trade diversion within EFTA. These estimates are contrasted with other ex-post estimates, and are further used to examine the accuracy of the predictions of trade diversion from a simple elasticity of demand model.

Governmental policies toward foreign investment are made complex by the variety of actors involved in or affected by the establishment of companies abroad and by the differences in decision factors employed by each. Governments of advanced and developing countries see the companies differently; as do various interests groups in each, and as do international organizations. These differences are further complicated by differences among sub-units in government and among types of international companies. Consequently, it is highly unlikely that governments will agree on the means of guiding or controlling international companies.