DEVELOPMENT ECONOMICS-INFRAMARGINAL VERSUS MARGINAL ANALYSES

Preface
The core of classical mainstream economics represented by William Petty and Adam
Smith was development economics. The classical development economics differed from
neoclassical development economics in two aspects. It focused on development
implications of division of labor and it emphasized the role of the market (the invisible
hand) in exploiting productivity gains from the division of labor. As shown in this
textbook, inframarginal analysis of individuals' networking decisions is essential for
formalizing the classical development economics. Here inframarginal analysis is the total
cost-benefit analysis across corner solutions in addition to the marginal analysis of each
corner solution. If the optimum value of a decision variable takes on its upper or lower
bound, the optimal decision is a corner solution. Formally, it relates to nonlinear
programming, mixed integer programming, dynamic programming, the control theory,
and other nonclassical mathematical programming.