Should the size of the government (e.g. public spending) be minimised as much as possible? Please discuss pros and cons of public finance downsizing with relation to Emerging Markets.

Order Description

Should be an essay written to a highest standard-First Class Standard(higher than 85%). All essay should be based on the case of Emerging markets like Russia, Poland etc. The essay should be written in Times New Roman with Single Space, 12th font and over 2500 words(not inlcuding bibliography). The use of graphs/charts/bars is highly needed(it can be found from the text books which I attached) and need to be explained. Rescources should not include wikipedia, only books and articles provided(from all the weeks;attached them as a word file as well).

1)Core Readings for that essay

2)Core readings for the whole course(might be needed)

3)Presentations

There are core readings for this specific essay:

Week 22: Financial Sector Reforms and Comparative Financial Systems

Lecture

Key readings:

1)*Berglof, E. and Bolton, P. (2002). The Great Divide and Beyond: Financial Architecture in Transition. Journal of Economic Perspectives. Vol. 16(1), pages 77- 100.

2)*Ang, J. (2008) A Survey of Recent Developments in the Literature of Finance and Growth. Journal of Economic Surveys. Vol. 22(3), pages 536-576.

3)E. Berglöf, “Capital Structure as a Mechanism of Control: A Comparison of Financial Systems”, in Masahiko Aoki, Bo Gustavsson, and Oliver Williamson (eds.), The Firm as a Nexus of Treaties, European Sage, 1990.

4)Dewatripont, Mathias and Eric Maskin, (1995), ”Credit and Efficiency in Centralized and Decentralized Economies”, Review of Economic Studies, 62: 541-555.M.

5)EBRD (2006). Transition Report: Finance in Transition. Chapter 3 (4 and 5).

6)Fries, S. and Taci, A. (2002). Banking Reform and Development in Transition Economies. EBRD Working Paper 71.

7)Pagano and P. Volpin Pagano, 2001. “The Political Economy of Corporate Governance,” CEPR Discussion Papers 2682.

Downloadable at http://www.cepr.org/pubs/dps/DP2682.asp

These textbooks might help as well:

1)T. Mickiewicz “Economics of Institutional Change: Central and Eastern Europe” Revisited (Studies in Economic Transition), Palgrave 2010

2) G. Roland, “Transition and Economics”, Politics, Markets, and firms, MIT 2000; 3)M. Aoki, “Toward a Comparative Institutional Analysis”, MIT Press 2001; 4)G. Turley, and P. Luke “Transition Economics”, Routledge 2011; 5)O. Havrylyshyn, “Divergent Paths in Post-Communist Transformation: Capitalism for All or Capitalism for the Few?” (Studies in Economic Transition), Palgrave 2006.

PUBLIC FINANCE

Project description
1. Answer the following questions regarding Pareto Efficiency:
a. When is an allocation of resources Pareto Efficient?
b. What is the condition of Pareto efficiency in a pure exchange economy? Explain
the economic intuition of it.
c. What is the condition of Pareto efficiency in a production economy? Explain the
economic intuition of it.
d. Is it possible to have a Pareto efficient allocation where someone is worse off than
he is at an allocation that is not Pareto efficient?
e. Is it possible to have a Pareto efficient allocation where everyone is worse off
than they are at an allocation that is not Pareto efficient?
f. Can some individual be made better off if we are at a Pareto efficient allocation?
2. What is a contract curve? Show it with the help of a diagram. If you know the contract
curve, can you tell the outcome of any trading?
3. Is competitive equilibrium a good thing or bad thing for an economy? Give reasons for
your answer.
4. Assume an economy with only one consumer, Robinson Crusoe, and two goods – coconut
and fish. The traditional name for this economic model is the Robinson Crusoe economy,
after Defoes shipwrecked hero. If Robinsons marginal rate of substitution between
coconut and fish is 2 and the marginal rate of transformation between the two goods is
1, what should he do if he wants to increase his utility?
5. Suppose that in the Robinson Crusoe economy, Robinson finds a friend called Friday.
Further suppose that Robinson can produce 10 pounds of fish per hour or 20 pounds of
coconuts per hour and Friday can produce 20 pounds of fish per hour or 10 pounds of
coconuts per hour. Robinson and Friday both want 60 pounds of fish and 60 pounds of
coconut per day. How many hours must Robinson and Friday work per day if they dont
help each other? Suppose they decide to work together in the most efficient manner
possible. How many hours each day do they have to work? What is the economic
explanation for the reduction in hours?
Page – 2
6. Indicate whether each of the following statements is true, false or uncertain, and justify
your answer.
a. If everyone has the same marginal rate of substitution, then the allocation of
resources is Pareto efficient.
b. If the allocation of resources is Pareto efficient, then everyone has the same
marginal rate of substitution.
c. The Second Fundamental Theorem of Welfare Economics tells that the
competitive allocation of resources is socially desirable.

PUBLIC FINANCE

Project description
1. Answer the following questions regarding Pareto Efficiency:
a. When is an allocation of resources Pareto Efficient?
b. What is the condition of Pareto efficiency in a pure exchange economy? Explain
the economic intuition of it.
c. What is the condition of Pareto efficiency in a production economy? Explain the
economic intuition of it.
d. Is it possible to have a Pareto efficient allocation where someone is worse off than
he is at an allocation that is not Pareto efficient?
e. Is it possible to have a Pareto efficient allocation where everyone is worse off
than they are at an allocation that is not Pareto efficient?
f. Can some individual be made better off if we are at a Pareto efficient allocation?
2. What is a contract curve? Show it with the help of a diagram. If you know the contract
curve, can you tell the outcome of any trading?
3. Is competitive equilibrium a good thing or bad thing for an economy? Give reasons for
your answer.
4. Assume an economy with only one consumer, Robinson Crusoe, and two goods – coconut
and fish. The traditional name for this economic model is the Robinson Crusoe economy,
after Defoes shipwrecked hero. If Robinsons marginal rate of substitution between
coconut and fish is 2 and the marginal rate of transformation between the two goods is
1, what should he do if he wants to increase his utility?
5. Suppose that in the Robinson Crusoe economy, Robinson finds a friend called Friday.
Further suppose that Robinson can produce 10 pounds of fish per hour or 20 pounds of
coconuts per hour and Friday can produce 20 pounds of fish per hour or 10 pounds of
coconuts per hour. Robinson and Friday both want 60 pounds of fish and 60 pounds of
coconut per day. How many hours must Robinson and Friday work per day if they dont
help each other? Suppose they decide to work together in the most efficient manner
possible. How many hours each day do they have to work? What is the economic
explanation for the reduction in hours?
Page – 2
6. Indicate whether each of the following statements is true, false or uncertain, and justify
your answer.
a. If everyone has the same marginal rate of substitution, then the allocation of
resources is Pareto efficient.
b. If the allocation of resources is Pareto efficient, then everyone has the same
marginal rate of substitution.
c. The Second Fundamental Theorem of Welfare Economics tells that the
competitive allocation of resources is socially desirable.