Introduction

Abstract

The rapid growth in computational power in the last three decades has opened new opportunities for economists to develop disaggregated models to analyze dynamic comparative advantage. Thus while only simple rate of return calculations on an export project could be done thirty years ago, now it is possible to develop models of a worldwide industry in order to analyze the international competitiveness of a project. In the past one could study the effects of tariff increases on a single industry. Now one can use multisectoral models to trace the effects of tariff reforms through input-output systems to prices, to income distribution, and back to aggregate demand changes. However, these models are new enough that we are still learning about the breadth of their potential application and about their strengths and weaknesses. Therefore this book provides a review of dynamic comparative advantage models with an eye to the use of these models for policy analysis.