Policy for interventions to solve problem, Public Economics

Assignment Help:

A variety of interventions can affect outcomes. The important one are, intervention to solve coordination problem, information as an interventions, interventions to change the dynamics of political process and interventions change distribution of wealth. As the equilibrium set of behaviours in a decentralized economy may not be Pareto efficient, it can not be concluded that political process can be a suitable alternative to attain required improvements. We have seen that policy process is a dynamic phenomena so, it make an analysis of policy intervention would also require a dynamic framework.

The critical question that has been investigated in this respect may be whether and how an initial coordination failure will in fact transmit itself over there? Why would not a forward looking agents, with positive expectations, adopt a policy path, that may be self fulfilling to move away from a bad equilibrium? And most critically, we may ask, is there really any scope for policy? Adsera and Ray (1998) addressed these questions and obtained some striking results. They found that if positive externalities from moving to more favourable set of policies appear with a time lag. ‘then the final outcome depends entirely on the initial conditions unless there is some gain to being the first to switch'. In other words, unless there is some gain to being among first to experiment a policy switch, each agent will rationally wait for other to make a policy change and so no one will switch at all.


Related Discussions:- Policy for interventions to solve problem

Agenda setting, Explain the stages and various coordination mechanism nvolv...

Explain the stages and various coordination mechanism nvolved in policy processes

Why does government undertake an economic activity, Q. Why does government ...

Q. Why does government undertake an economic activity? If ever an activity has large externality or spill over and includes a large number of people, it may be found better th

Total economic value of environment, Normal 0 false false f...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Environment economic, A dam is proposed on a stretch of wild river, a river...

A dam is proposed on a stretch of wild river, a river that is currently used for recreation. The dam will generate electricity. The dam will have a useful life of 50 years, after w

Production, Types of production function

Types of production function

Contingent valuation method, Contingent  Valuation Method Norma...

Contingent  Valuation Method Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Financial deregulation - regulations and competition policy, Consider a cas...

Consider a case, if an insurance company merges with a bank. We know that insurance company bears risk for insurers. Suppose, after merger, bank gets in some trouble for reasons ot

Health economics - derivation of the contract curve, Health Economics - der...

Health Economics - derivation of the contract curve: 01. Consider the Edgeworth box with the production of consumption goods B and health- investment goods I. (a) Briefly expl

Pareto improvement, 1. is pareto improved demonstrated using the edgeworth ...

1. is pareto improved demonstrated using the edgeworth box daigram?

Ecommerse, #questioi hour classn..

#questioi hour classn..

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd