MGEC81H3 Lecture Notes - Lecture 10: Productive Efficiency, Human Capital, Import Substitution Industrialization
1 May 2016
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Flying geese japanese model copy cat, look at industry in front of you, do it: not doable unless you have know how, can learn from it, japan was pretty advanced acc. Labour intensive don"t need to be located in the city: raw mateirals vs. car lots of components, caital intensive, big manufacturing , capital intensive sites located around city. Do all kinds of stuff, not registered. Import substitution industrialization: less trade, incentive to concentrate in a single city largely to avoid transportation costs. Go to city cant find jobs. Hope to become formal at some time. Five policy implications: reduction of urban bias. Hard to get rid of informal: imbalances in expected income opportunities is crucial, indiscriminate educational expansion fosters increased migration and unemployment, wage subsidies and scarcity factor pricing can be counterproductive. Go there & give subsidize to bring urban down or bring rural up.
