Factor and Product Market Distortions, Production Efficiency and International Trade

Production Efficiency and International Trade Murali Patibandla Policy-induced factor market distortions in resource allocation can be effectively used to shim the static inefficiency to bring about dynamic growth in an economy. This paper argues that static allocative inefficiency continues to plague the industrialisation process in India worsening the skewness of income distribution which has caused the fragmentation of the domestic market for manufactured goods.