Econ10.18.10

Econ10.18.10 - A. Albert Hirschman. The Strategy of...

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A. Albert Hirschman. The Strategy of Economic Development . 1. How does “complementarity” matter in economic development? How does it relate to “induced investment?” 2. Explain the concept of an “efficient sequence.” 3. Under what circumstances do you think Albert Hirschman would favor government investment in “directly productive activities?” B. Cypher/Dietz Ch. 7 Q. 4: Professor Krueger has maintained that the solution to rent-seeking on the part of state functionaries is the shrinkage of the state. Peter Evans’ perspective is quite different. Compare their contrasting approaches to rent-seeking. Where do they agree, and when and why do they disagree? Assignment 7 1. Catching two birds with one stone. Investment will trigger much more investment. Strict complementarities would be steel and cement: need both for construction . Looser one would be need office equipment for office building. Additional investment without having to pay for it. Inducing investment with complementarities. Definition of induced investment: Induced investments are net beneficiaries of external economies, so that is the relation to induced investment. Complementarities lead to induced investment. All complementarities have an element of induced investment to it. 2.a->b->c->d…can skip b or c, come back to it later. Example: only 7 lines of internet per
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Econ10.18.10 - A. Albert Hirschman. The Strategy of...

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