CAS IR 292 Study Guide - Midterm Guide: Washington Consensus, Vertical Integration, Trade Diversion
11 Mar 2016
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Y = ak^fish x l^b: production = technological scale, capital by elasticity x labor: ricardo included land in his production function, typ ignored in recent times, households = utility maximizers, we want happiness! Informal institutions = customs, norms, culture; need to include the world: pollution! Climate change is free, smoking as a negative externality: education as a positive externality, representative gov"t and industrial rev. In 1950, total world exports were 5. 5% of world gdp by 2005, total world exports were 20. 5% 330 rta"s have been recognized by the wto. Int orgs = rules and orgs that govern and constrain behavior: benefits of trade > costs, many arguments for trade, formal institutions = codified by laws, power is given by law, state what it is. Informal institutions = customs/traditions that define appropriate behavior (w/o legal support: major int eco orgs = imf, world bank, wto imf/world bank bretton woods in 1945.
