The main problem of underdeveloped countries consists in an inflexible productive structure which makes it difficult to adopt to changes in world markets. There are three important instruments to improve their flexibility. The first instrument are the investments - not investments in general...

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Paul A. Samuelson taught that every society has to choose between butter and guns. Individuals have to make the Gossen test of utility equivalence. The authors of the recent Mirrlees Review seem to believe that they can avoid this choice by considering taxation only. But how can one decide on...