Investment Allocation, Relative Price Stability and Stable Growth

In the present article, we consider an open economy in a developing stage, which has most of its imports of the capital goods type, and which has undergone a devaluation of currency following a chronic balance of payments deficit. Retaining full employment along HACSR and balanced growth as the long-run objectives, we analyze the efficiency of investment allocation and relative price stability in bringing about balanced growth and balance of payments equilibrium.