Dual economy, large unemployment, a fixed number of skilled workers, perfect capital mobility, migrant labor force working in South African gold mines, and a cycle of poverty characterize Lesotho. This paper develops a general equilibrium model for Lesotho specifying these absorbing economic...

For the last half century, trade theorists, development economists, and development practitioners have been calculating what was claimed to be the shadow price of scarce foreign exchange. In fact, what they have been calculating is the social value of the receipt of a unit of a numeraire good...

For a very general, small open less-developed country with a convex production set, the shadow price of foreign exchange is lower with tariffs on one subset of imports and VERs on another than with tariffs and quotas. This is true with and without international capital mobility. Furthermore, the...