Structural interdependence and policy coordination, Public Economics

Assignment Help:

The structural interdependence, in fact, forms the basis for the policy maker's choice behaviour for policy or policy mixes. The spectrum formed by various policy mixes depends on the levels of coordination between agents. Paul Rosenstein-Rodan declared as early as in 1943, that economic development could be thought as massive coordination failure, in which several investments do not occur simply because other complementary investments are not made, and there latter investments are not forthcoming simply because the former are missing. Thus we may conceive two Equilibria under the very same conditions, one based on positive expectations in one sector due to realizations of various policy outcomes in other sectors and other involving frustration and persistent stagnation in which frustration due to negative policy outcome in one sector spill over to the other sector.

This serves as potential explanation why similar policy instruments in similar economics behave differently and give rise to different or dissimilar policy outcomes. It, in fact, depends on the nature of belief and expectations held by agents in different sectors concerning the actions of each other.


Related Discussions:- Structural interdependence and policy coordination

Explain the main causes of unemployment, Problem 1: i) Define the th...

Problem 1: i) Define the three main Economic Systems? ii) How can knowledge on price, income and cross price elasticity of demand, be helpful to the Government and a firm,

Collectivist enforcement, The coordination problem relates us to not only t...

The coordination problem relates us to not only the levels of activities like research and developments (R&D) and investments but also to the behaviour of institutions that charact

Theory of Second Best and Pareto Optimization, “In the presence of institut...

“In the presence of institutional constraints, the Theory of Second Best tells us to perform the welfare maximization problem to solve the Pareto Optimal conditions and then apply

Planing, In planning activities how are the decision arrived? what are the ...

In planning activities how are the decision arrived? what are the different stages of analysis? which factors can be ignored and why? state the manner in which a degree of success

Summary of valuation of environment, Normal 0 false false f...

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

Aspects of environmental functions, Normal 0 false false fa...

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

What can we do then while aiming at the public policy, Q. What can we do th...

Q. What can we do then while aiming at the public policy? From the above, one task emerges immediately, that is of quantifying all economic and non economic effects of a certa

Cost-based methods - indirect opportunity cost, Normal 0 false ...

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

Judiciary and pollution control, Normal 0 false false false...

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

Types of inefficiencies caused by the public sector, QUESTION a) How ...

QUESTION a) How would the strategy of a firm faced with repeated games differ from that faced with sequential games? b) What do you understand by an optimal level of poll

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