microreform and structural change (1 Viewer)

[Nelly_04]

hi can anyone help with this question:

Explain the role of microeconomic policies in assisting structural change in the Australian economy.

I dont' understand how microeconomic reform and structural change are connected.....also can sum1 explain what is meant by technical, allocative and dynamic efficiency?

 

[i-color]

microeconomic reform brings about structural change in the economy --> micro reform aims to target certain sectors/areas/industries in the economy to solve structural problems that cannot be solved by cyclical factors (eg ageing population, inefficient industires etc must be solved by changing the structure of the sector and eco growth is not going to solve this problem)

Dynamic efficiency= ability of economy to adapt quickly and efficiently to sudden changes in economy (eg how Aust insulated itself from a recession when there was a global downturn due to dynamic efficiency --> we were able to adapt our fiscal and monetary policies to ensure we do not go into recession as well)

Allocative efficiency= efficient allocation of resources (ie no wastage of resources) and ability for economy to operate on its PPC so all resources are used productively and to the best of its capacity

Technical= no exactly sure about this one......i think something to do with taking advantage of economies of scale and minimising diminishing returns to scale

 

[Rorix]

technical is the optimal allocation of resources within a sector i believe

 

[launcher169]

You could as look at micro reform working on the effeciency of the supply side of the economy...making supply more flexible to shocks etc....
in the process of micro reform you will get structural change...leading to structural
unemployment...which would then require retraining etc

on the flip side...macroeconomic reform would look at the demand side of the economy...inflation..goverment expenditure...etc

hope this helps

 

[miffytoki]

hi can anyone help with this question:

Explain the role of microeconomic policies in assisting structural change in the Australian economy.

I dont' understand how microeconomic reform and structural change are connected.....also can sum1 explain what is meant by technical, allocative and dynamic efficiency?

micro policies lead to structural reform, as they often result in changing patterns of production. This is because micro policies result in better allocation of resources and allows other resources to be diverted into other production areas hence leading to structural change which is any change to the pattern of production including technological change.

by improving dynamic efficiency they can result in structural change as firms can move production to those areas demanded at that instant (instantaneous ordering of stock from technology improvements). This can hence lead to increased diversification of australia's export base. (see increased stats on services and manufacturing and ETMs)

NCP has also helped result in technological change by increasing competition in firms and making sure they improve efficiency by making sure they adopt efficient managerial methods. this has led to product innovation (computing goods) and hence improved technology in the economy leading to structural change.

also mention trade reforms and how that has switched export focus to services, ETMs, manufacturing goods, which is structural change.

sorry if i don't make too much sense...i'm very tired...hope this helps...