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

Public finance, What are the objectives of pubic finance

What are the objectives of pubic finance

Valuation tools - shadow prices, Normal 0 false false false...

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

Capital accounting system, (1) The federal government is considering sellin...

(1) The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreig

Policy frameworks and decision process, With a background from the previous...

With a background from the previous section we now study some of the critical characteristics of policy process. You have already studied earlier various technical theories relatin

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

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

Central banking, examine the efficiency of quantitative credit control inst...

examine the efficiency of quantitative credit control instruments.

Introduction of performance-related pay, Question: Awards for excellent...

Question: Awards for excellent performance are increasingly employed within the public service in many countries. These will or will not have a financial value. Performance-rel

Foreign trade and capital flow problem, In the wake of the Asian financial ...

In the wake of the Asian financial crisis, policymakers, governments, and academics around the world are busy devising ways to reform the global financial architecture. The plethor

Determine the natural rate of unemployment, Suppose the firm mark up over t...

Suppose the firm mark up over the cost is 10% and the wage setting equation is W=P (1-u) where U is the unemployment rate. a) Find out the real wage rate implied by the price se

Explain ex-post heterogeneity, The other type is called ex-post heterogenei...

The other type is called ex-post heterogeneity which refer to the conflict (of interests) arising due to distributional implications of the public policy. Thus when a public polic

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