This paper proposes a new index of welfare reflecting poverty that takes into account the welfare of the poor and the non-poor in the society. Sen’s analytical frame-work for real income comparisons is modified to widen the scope of welfare interpretation of different measures. Information requirement of the measure is very limited.

The paper attempts to assess Bangladesh’s experience under the new regime of ‘generalised floating’. In doing so, it focuses mainly on its potential for being yet another source of instability for the economy. The paper endeavours to establish four things. First, through the computation of instability-indices, it highlights the extent of variability experienced in Taka’s bilateral exchange-rates and effective exchange-rate. Second, it appraises the qualitative and quantitative impact of this variability on important micro-economic decisions and macro-economic variables. Third it attempts to decompose instability in Taka’s effective exchange rate, into a totally external component and one ascribable to exchange-rate policy of the authorities. It is shown that the latter was successful in reducing average instability in the period of 1976-81 even if variability of bilateral exchange-rate remained high in absolute terms. Fourth, it speculates on potential policy-options and argues that under present conditions, a Taka-dollar-peg has to be the recommended policy.

The paper presents a set of dynamic data (1951-81) on the concentration and dispossession of landownership/control in two villages of Bangladesh. Based on a prolonged and in depth fieldwork, the investigation reveals that richer households have been enlarging their share on the ownership/control of agricultural land at the expense of the poorer ones. The middle peasantry was also under tremendous economic pressure. A clear process of disintegration of the peasantry is certainly on.

The Translog cost function extimation approach has been used in this paper, to estimate important industrial policy parameters. The translog approach differs from the more frequently used techniques viz, the generalized Cobb-Dauglas production function (C0D) approach and the Constant Elasticity of Substitution (CES or ACMS) approach, in that restrictive assumptions about the elasticity of substitution between factors do not have to be made. The translog approach also has the additional advantage of providing cost shares for each factor, pair-wise elasticity of substitution, and own and cross price elasticities for the inputs. Thus, a whole range of policy parameters can be simultaneously estimated.While estimates of elasticity of substitution between capital and labour, and capital and materials are not significantly different from one, the parameter estimate is significantly below unity for substitution between labour and materials. The cross price elasticities show that the three inputs capital, labour and materials are complements in production. The own price elasticities have the appropriate signs and are all significantly below one. As expected the cost share of raw materials is the largest (78.9%) followed by labour’s share (14.6%) and capital’s share (6.5%). Alternative hypotheses regarding scale economies have also been tested. Data from the manufacturing sector of Bangladesh for the period 1969/70 to 1978/79 have been used.