ECON 1 Lecture Notes - Lecture 13: Rent-Seeking, Jigsaw Puzzle, William Baumol
Document Summary
Total supply of entrepreneurs varies among societies. Productive contribution of the society"s entrepreneurial activities varies much more. Allocation between productive (innovation) and unproductive (rent seeking) activities. Allocation of activities is influenced by the relative payoffs that society offers. Policy can influence the allocation of entrepreneurship more effectively than it can influence its supply. Explanation that was offered to explain historic slowdowns or great leaps in economic growth: the entrepreneur. Decline in entrepreneurship is partly blamed for slowing of economy growth. This paper: entrepreneurs always play some substantial role, but there are many roles among which the entrepreneurs" efforts can be reallocated. Entrepreneurs can also be damaging to the economy. Rules of the game: reward structure in the economy. Determine how the entrepreneur acts at a given time and place. It is the set of rules and not the supply of entrepreneurs or the nature of their objectives that undergoes significant changes from one period to another.
