History, coordination and optimality: some policy lessons

Devashish Mitra (dmitra@maxwell.syr.edu)

The Journal of International Trade & Economic Development, 1999, vol. 8, issue 2, 185-193

Abstract: Within a two-sector dynamic framework with external economies in one sector (which give rise to the possibility of multiple equilibria) and convex adjustment costs, this paper provides a welfare ranlung of movements towards the two stable equilibria, solves for the optimal speed of industrialization and derives the shape of the social planner's optimal resource allocation path. These results show that one should be cautious in drawing policy implications from static models of coordination failures. Moreover, this paper also argues that a reduction in adjustment costs (e.g. through the provision of public education facilities) is an essential precondition for industrialization when the existing industrial base is thin.

Keywords: Coordination failures; government policy; industrialization (search for similar items in EconPapers)
Date: 1999
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09638199900000011 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:8:y:1999:i:2:p:185-193

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199900000011

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst (chris.longhurst@tandf.co.uk).