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

Pollution expenditure accounting, Normal 0 false false fals...

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

Identify appropriate economic policy, Examine issues and decisions using th...

Examine issues and decisions using the economic way of thinking; identify appropriate economic policy; communicate economics in written format Topic Upon finishing your d

Related goods approaches - barter exchange approach, Normal 0 f...

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

Valuation of environment, Normal 0 false false false EN...

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

Contingent valuation method, Contingent  Valuation Method Norma...

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

Similarities between physical capital and natural capital, Normal 0 ...

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

Explain how the mobile industry is enabling economic growth, Question: ...

Question: (a) Jeffrey Sachs, Columbia University's Earth Institute Development Guru, opines that the humble mobile phone is "the single most transformative tool for developmen

Factors for evaluating a policy instrument, Normal 0 false fa...

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

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

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