Chapter 4 Growth and development in trade models Growth and development are used interchangeably. Growth has the connotation of simply more of everything while development is taken to refer to some qualitative transformation or structural shift. In practice the development aspect of trade theory arises from the attempt to address problems regarded as of major significance for the less developed countries of the world economy. These have ranged from the infant industry problem of Hamilton and list to the terms of trade problem. The insights and concerns of these critics of orthodox doctrine have led to a number of attempts sympathetic and otherwise to handle these issues analytically. This chapter provides an overview on Ricardian theory and considers some neglected aspects of Ricardos ideas on trade and growth based on his analysis of the distributive shares. It discusses Arthur Lewis three good Ricardian model of the terms of trade and Emmanuels concept of unequal exchange. It also reviews neoclassical theory which contains the major mainstream literature on growth and trade with discussions on comparative statics dynamics and the concept of immiserizing growth and foreign investment. It also discusses various theoretical aspects of trade and development issues including analyses of infant industry protection two gap models the open dual economy and an extensive discussion of recent work on NorthSouth models.