The Indian Statistical Institute Conferences on Economic Theory and Related Mathematical Methods were conceived with the goal of fostering research and discussion in the application of theoretical methods to economic development. This collection of papers, all outcomes of the presentations and lively discussions at the first three meetings, is being published with the same purpose in view.
The chapters fall into four broad subject categories: macroeconomics, industrial organization, planning and public policy, and intertemporal economics. In the first section, two chapters deal with the interaction between agriculture and industry, and its implications for short-run macroeconomic effects of exogenous changes in agricultural output, and transfer payments from the government. The third chapter examines whether an increase in administered prices of some essential good (such as petroleum) has an expansionary effect, while the fourth analyses the effects of technological change on an LDC via North-South trade. The section on Industry includes chapters on technical change and market expansion, profitability in relation to monopoly trading and entry deterrence, product differentiation and pricing 'networks' in congested markets, and the effect of learning-by-doing on industry concentration and pricing behaviour. The section on Planning and Public Policy begins with a chapter on the design of dynamic, decentralized planning procedures to allocate resources between private and public goods. Another chapter surveys the literature on informational constraints in planning procedures, and the last two deal with aspects of government policy pertaining to foreign investment and foreign aid. The final section on Intertemporal Economics contains two papers dealing respectively with the efficiency of market outcomes, and the nature of bequest behaviour, in the context of a model with overlapping generations of economic agents.
While it is easy to talk about issues in economic development and to state the problems, it is only when these issues are met head-on with rigorous analysis that progress can be made towards eventual understanding. This book makes progress in this direction, and the abstract problems that are discussed here are in no way distanced from the live concerns of political economy. The book should thus fulfil the dual aim of informing scholars and encouraging young researchers to further such work.
This work discusses the application of theoretical methods to economic development. The authors break their analysis into distinct sections--macroeconomics, industrial organization, planning and public policy, and intertemporal economics. In each section, they approach specific issues with a rigorous analysis, from the influence of Kalecki in macroeconomics to the design of a decentralized planning procedure to decide on resource allocation between public and private sectors. They also examine fundamental issues underlying well-known models of intertemporal behavior, both inter- and intragenerational. Discussing complex theories clearly related to problems of development, this work will interest students and scholars of development economics, and professionals involved in policy, economic research, and planning.
