Theoretical models have been developed in recent years for analysing the problem of choice of technique for dualistic economies such as Bangladesh. But implications of these models have generally been explored on the basis of assumed values of parameters. This paper experiments with a variant of these models with actual values of the parameters estimated from Bangladeshi data. The model is simulated to derive implications for choice of technique at different stages of economic development. By using a social welfare function which takes note of inter-sectoral (but not intra-sectoral) equity, the model shows that at the present stage of development, greater emphasis should be laid on generating savings, even if at the cost of lower labour-intensity in the choice of investment projects. But more labour-intensive projects should be encouraged as the traditional sector gets increasingly absorbed in the modern sector.

The standard two-sector model of trade has been modified to explore the consequences of removing its static framework. It has been shown that the reallocation effects consequent upon a change in terms of trade ( or consequent upon the opening of trade) may lead to capital decumulation in the economy and, paradoxically, to an expansion of trade varying with the rate of capital decumulation. Thus trade expansion may be accompanied by economic atrophy. This analysis may be used to understand the economic conditions in some of the colonies, viz., India in the first half of the nineteenth century. It may also be applied in reverse to explain how colonial trade became an ‘engine of growth’ in the metropolitan countries.

Several alternative estimates are made of the flow of remittances sent by the Bangladesh workers in the Middle East and the conclusion is reached that most of the potential remittance is actually sent through the official channel. Some of the impacts of these remittances on the Bangladesh economy are also analysed. The main focus is on the impact on balance of payments on the one hand and he income and savings of the remittance receiving households on the other. In connection with the balance of payments impact, attention is drawn to the possible ‘distortion costs’ that may be involved in stimulating increased flow of remittances, given the structure of the foreign exchange market in Bangladesh. The absolute impact on the income and savings of the remittance-receivers is found to be substantial; but the impact on the relative distribution of income seems disconcerting.