Hi. Can somebody enlighten me about the above statement that relates to institutional tools that have not been applied yet in emerging economies?
al
Dear Alex,
The new institutional tools should build on the institutional assumptions that Adam Smith laid out in the Wealth of Nation. People are questioning the gains from Free Trade. Unequal distribution was alway disturbing. While capital has become fairly mobile in the global economy, labor is sluggish at best, and perhaphs not yet mobile. Specialization and technological advance are now constrained by environmental problems. In the sense that we do as yet fully accomodated the new directions those institutional assumptions should take, they should be on the top of the list of consideration for emerging economies.
This means that such assumptions provide sustainability in emerging economies? and how?
al..
Dear Alex,
When Smith's institutional assumptions are combined with his natural and psychological assumptions, we get hitchless growth. You can look up Schumpeter's "History of Economic Thought" on this. If the institutional assumptions are constrained in the direction I indicated, then growth becomes hitched, which makes stationary or sustainable growth, or even decay possibile.
- Badges
- Science topic
- Similar topics
- Organizational Psychology
- Training