ECON 313 Chapter Notes - Chapter 4: Poverty Trap, Pareto Efficiency, Perfect Competition
9 Feb 2017
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Document Summary
Economic agent: an actor, could be a firm, worker, consumer or government official, that chooses actions so as to maximize an objective. Complementarity: an action taken by one agent that increase incentive for other agents to take similar actions. Often involves investment whose returns depend on other investments by other economic agents. Coordination failure: a state of affairs in which the inability of agents to coordinate their behavior leads to an outcome that leaves all agents worse off than in an alternative situation that is also an equilibrium. Big push model: a concerted, economy wide and typically public-policy led effort to initiate or accelerate economic development across a broad spectrum of new industries and skills. O-ring model: an economic model in which production functions exhibit strong complementarities among inputs and which has broader implications for impediments to achieving economic development.
