Abstract

New classical development economics constitutes one of the core components of new classical economics，a branch of economics founded by Yang Xiaokai. Professor Yang’s most important contribution is his effort to resurrect such ideas as the division of labor and specialization in classical economic by applying inframarginal analysis. In some sense，the very core of mainstream economics of the classical school is development economic. Division of labor is the ultimate source of economic growth，and the transactions on which division of labor depends carry costs. This is why transactional efficiency is of critical importance to increases in division of labor and economic growth. Transactional efficiency is itself determined by endogenous and institutional factors.

The author shows in this book that improvements in trading efficiency lead to more sophisticated division of labor，of which economic growth，trade，industry structure，corporate organization，industrialization，urbanization and macroeconomic phenomena are but different aspects. As such，they are amenable to explanation based on a single analytical framework，instead of requiring mutually independent subfields of investigation for each topic the way they were under the neoclassical framework. In addition to a systematic introduction of new classical development economics，the book also provides a thorough overview of neoclassical development economics. The five main areas covered are：the microscopic mechanism of development economics，corporate institutions and endogenous transaction costs and economic development；urbanization and industrialization；the dynamic mechanism of economic development，and development macroeconomics.