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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.
what is it
what are the costs and consequences of providing the subsidies and welfare?
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PIGOVIAN APPROACH Pigou assumed that the aim of social policy is to 'promote welfare'. But in order to simplifL this, he chose to restrict the range of his inquiry to
Q. What do you understand by Policy Process? Begin from theoretical frame work of policy making and proceed breaking various assumptions and introducing heterogeneity of agents
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
Consider two different consumer-directed health plans. One has a $5000 deductible, with the insurance paying for all care after the deductible has been met. The other has a $2000 d
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what are the principles of public debt?
what is public debt. ? give complate information on public debt. ?
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