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Why Are Market Econ...
Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion
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Dalgaard, Carl-Johan (författare)
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- Olsson, Ola, 1971 (författare)
- Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik,Department of Economics
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(creator_code:org_t)
- Göteborg, 2007
- Engelska.
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Serie: Working Papers in Economics (online), 1403-2465 ; 281
- Relaterad länk:
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https://gup.ub.gu.se...
Abstract
Ämnesord
Stäng
- The present paper documents that political stability is positively associated with the extent of domestic trade. In explaining this reg- ularity, we provide a model where political cohesion is linked to the emergence of a fully functioning market economy. Without market ex- change, the welfare of inherently selfish individuals will be mutually independent. As a result, political negotiations, echoing the prefer- ences of the citizens of society, will be dog-eat-dog in nature. Whoever has greater bargaining power will be willing to make decisions that en- hance the productivity of his supporters at the expense of other groups in society. If the gains from specialization become su¢ ciently large, however, a market economy will emerge. From being essentially non- cooperative under self-sufficiency, the political decision making process becomes cooperative in the market economy, as the welfare of individ- uals will be mutually interdependent due to the exchange of goods.
Ämnesord
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business -- Economics (hsv//eng)
Nyckelord
- Political cohesion
- Economic growth
- JEL codes: P16
- O41
Publikations- och innehållstyp
- vet (ämneskategori)
- rap (ämneskategori)