The_big_push - THE BIG PUSH Economic Development Prisoner Dilemma Firm impo rts advanc e d te c h Workers studied high education Workers doesn't

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THE BIG PUSH Economic Development
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Prisoner Dilemma Firm imports advanced tech Firm does not import Workers studied high education (15,15) (-5,5) doesn’t study (5,-5) (0,0)
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THE BIG public investment can break the cycle of poverty When needed? poverty trap no firms wants to be the first mover → risk of failure no infrastructure for investment Little training as skilled workers would go to work with higher wage firms anyway
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AMERICAN SOUTH
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Pre WWII Conditions (Before Big Pus h) 1870 New south → Leave agriculture to industrialize → failed as infrastructure not ready 1929 Great depres s ion Least effected in america as already suffering 1938 President Roosevelt “Nations no1 economic problem. .. can't succeed in establishing new industries” 26% of households in town were without indoor flush toilets 26%
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CONCLUSION Poor Underdeveloped infrastructures Few economic incentives for modernization vicious cycle / poverty trap Needs a big push to get out of poverty trap
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POST WWII (BIG PUSH) 1940 Conditions: 1) federal s pending → 'If I have seen further than others, its because I was standing on shoulders of giants.” o develop large scale manufacturing sector o WPW+WPS expand public capital → roads, schools, power plants o
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This note was uploaded on 02/13/2012 for the course ECON 101 taught by Professor Teerana during the Spring '11 term at Thammasat University.

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The_big_push - THE BIG PUSH Economic Development Prisoner Dilemma Firm impo rts advanc e d te c h Workers studied high education Workers doesn't

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