ECONOMICS – Daily Answer Writing Challenge, 11 July 2014
1) Summarize the main arguments of the trade optimist and trade pessimist with regard to trade policy for developing countries. Which arguments does the data tend to support? (200 Words)
2) Kaldor in his theory of distribution argues unlike Kalecki that it is not reasonable to neglect the constraints of labour shortage, and analyse a situation of full employment. Show how investment and saving propensities determine distributive shares in Kaldor approach. Suppose that investment is not exogenous as in Kaldor’s original model but that it varies with profits. What does it mean for the stability of Kaldor model of distribution? (200 words)
3) Write the criticism of Ricardian theory of distribution? (200 words)
