POL-UA 700 Final: Final Review (Lecture)
15 Aug 2015
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Document Summary
Domestic interests in lobbying for protectionism losers: consumers and exporters effect on politicians depends on the context. Stolper-samuelson theorem: protectionism benefits the scarce resource unskilled labor in general. Ricardo-finer model: what matters is the scarce industry the scarce resource is employed. unskilled labor in steel industry (specific) immobile factors of production. Foreign exchange: demand and supply same model as general supply and demand for exchange rate. Financial market: effects depend on magnitude of responses. Property traps: steady state: where the country is expected to invest ($ in income) in the long run!! No amount of money can be invested in infrastructure it"s all about the starting point. If you start at a, you don"t have enough money to invest in infrastructure, you can"t develop. If you start at b, where you can eventually reach the steady state period, where you will develop. need a big push to elevate countries out of the poverty trap.
