Big Push

Question 1

Assumptions

Answer 1

SF
Lnorm
Closed
Y/N
Mono/Perf Comp
N types

Question 2

When will a firm enter?

Answer 2

Depends on:
1. How much more efficient is it
2. How much more are the wages

Question 3

S curve

Answer 3

Privately rational decision functional

My decision dependant positively on expectation of how many other agents making the decision, or the extent of that decision

Cuts from above, stable
Cuts from below, unstable

Question 4

O ring Assumptions

Answer 4

1. Firms are risk neutral
2. Labour Markets are competetive
3. L supply INELASTIC (ie. supply labour regardless of wage)

Question 5

Growth Diagnostics: Framework First Tree

Answer 5

seeks to divide countries into those for which the main underlying problem is
1. Low rate of return
-> low returns to investors due to intrinsically low underlying social return on economic activities (returns reflect greater society as a whole)

because;
1. Poor geography
2. Low Human Capital
3. Bad Infrastructure

2. High Cost of Finance

-> bad international finance (access to foreign sources of capital, or debt problems)
-> bad local finance (low dom sav, poor intermediation)