Economics 2150A/B Study Guide - Quiz Guide: Monopolistic Competition, Factor Endowment, Oligopoly

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Colin Denniston

Document Summary

Only by first protecting own industries, will they ever be able to compete on world-markets. Import-substitution policies were popular for developing countries in the 80s. Encourage domestic industries, by protecting them from competing imports. However, countries adopting import-substitution policies grew slower than countries that didn"t adopt these policies. The infant industry argument was not valid in practice: Import-substitution industrialization involved costs and promoted wasteful use of resources: It set high tariff rates for consumers, including firms that needed to buy imported inputs for their products. As a result, and because of the rapid growth of east-asian countries, that did not adopt these policies, many developing countries started to liberalize trade. It is difficult to say, but the evidence points out that increasing exports of developing countries led to growth. Low wages and poor working conditions in developing countries. On average, workers in developing countries are better off. And anti-globalization movement is absent in developing countries.