ABSTRACT
The two sector optimum growth model developed by Uzawa 1 has proven very useful in analyzing the properties (particularly steady state properties) of inter-temporally optimizing economies. The model has been extended by Bardhan 2 and Ryder, 3 among others, to open economies in order, to examine patterns of trade and production along optimal paths of capital accumulation. In this chapter I present some further results about trade and trade taxes in such an economy. Also, a useful diagrammatic interpretation of optimal steady states is presented which is a little richer in intuitive appeal than the state-costate diagrams that usually accompany the optimal growth literature.
