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

Model of industry protection of grossman and helpman, Consider the model of...

Consider the model of industry protection of Grossman and Helpman. There are two industries A and B, each producing good X and Y respectively. All other things being equal, the dem

Indirect taxes on smoking, Discuss whether high indirect taxes are the best...

Discuss whether high indirect taxes are the best way to discourage smoking.

Cost-based methods, Normal 0 false false false EN-IN ...

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

Examine the reasons for a country to engage in free trade, Problem 1: i...

Problem 1: i) According to you the Central Electricity Board in Mauritius operates in which type of market structure? Justify your answer. ii) Compare and contrast a perfe

MULTI-UNIT FINANCE, WHAT ARE THE PRINCIPLES OF MULTI-UNIT FINANCE?

WHAT ARE THE PRINCIPLES OF MULTI-UNIT FINANCE?

Explain what is economic growth, Question 1: i. Explain the likely effe...

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

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

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

Prepare a news release announcing the launch of network, The news release i...

The news release is the ‘granddaddy' of public relations writing vehicles. (a) As a PR student, show the main points you would consider when attempting to write an effective ne

Cost-based methods - restoration cost, Normal 0 false false ...

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

Decision process - welfare economics, One shortcoming of neoclassical welfa...

One shortcoming of neoclassical welfare economics is that it does not take into account the institutional structure of collective decision making. To draw normative conclusions abo

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