Class Notes (836,276)
Canada (509,737)
POL371H1 (16)

Lecture 2: Institutions

7 Pages
Unlock Document

Political Science
Harald Bathelt

Table of contents1Market interaction and spatial equilibrium2Production factors3Institutions and economic interaction4Institutions in spatial perspective5Institutional hysteresis and the micromacro dilemma6Persistence and change of institutions7Innovation and institutions1Market interaction and spatial equilibriumNeoclassical economics economic transactions are led by price signals Fully rational decisions economic manFundamentally different interests of supplydemand1Market interaction and spatial equilibriumNeoclassical economics market signals automatically create a balance of interestsEquilibriums would be unlikely without market signals1Market interaction and spatial equilibrium1Market interaction and spatial equilibriumSpatial equilibrium HeckscherOhlin theoremAssumptions 2 regions coreperiphery2 production factors labourcapital that are immobileGoods are mobileRegional contexta Periphery large labour force with low wages specialisation on labourintensive products because thisproduction is cheaper than in the corebCore large capital endowment with low interest ratesspecialisation on capitalintensive products because this production is cheaper than in the periphery1Market interaction and spatial equilibriumInternational trade promotes shifts toward equilibriuma Periphery exports labourintensive products high demand leads to increasing wage levels b Core exports capitalintensive products high demand leads to increasing interest ratesCONSEQUENCE Wage levelsinterest rates converge toward an equilibriumCRITIQUE Role of socioinstitutional influences state policies strategies neglected
More Less

Related notes for POL371H1

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.