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A change in the legal statute may be able to force an equilibrium if it leads to a new equilibrium which implies some revised belief which sustains the equilibrium. Tirole (1996) developed a model to study group reputation and demonstrated that an anticorruption programme of sufficient duration and severity can play in switching an economy from high corruption with sustained belief it to one with low corruption and sustained belief for it. This shift has wide spread impact on all most all the sectors of the economy.
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Consider an economy in which George and Harriet consume only ale and bread
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Question 1: i. Explain the likely effects of a recession on a government's budget? ii. How is the operation of fiscal policy supposed to affect the level of economic activ
This variant of coordination problem seeks the answer to why some countries fail to grow when public and private rent seeking makes property rights insecure. One reason is that re
does privatization decentralise economic power? discuss
Apply general attribution theory to analyze and explain each party''s attitudes and conclusions. Hint: Use consensus, consistency, distinctiveness, and the fundamental error. 2. Ex
circular flow of income in a frugal economy
(b) Assess the application of Kaldor’s compensation principle in resolving Pareto non-comparability and explain how the principle differs from the Hick''s compensation principle
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