Trade and Trade Policy for Development by Staffan Burenstam Linder. New York; Washington; London: Frederic A. Praeger, 1967. pp.xi + 179.

Linder's theme is that conventional trade theory, as set outin the theories of comparative advantage and the compatibility ofinternal and external equilibrium, as well as the traditional free traderules for trade policy are not valid for developing countries. Hecreates a trade model for developing countries in which internalequilibrium, in the sense of capacity income, and external(balance-of-payments) equilibrium are not compatible. Under thesecircumstances the need to satisfy the external equilibrium requirementdominates; this leads to a reduction of domestic output below capacityoutput. The existence of excess capacity in the midst of economicbackwardness effectively retards continued investment and economicgrowth. Thus, the role of trade policy is to facilitate the achievementof capacity output