Answer to Question #92540 in Macroeconomics for Mark Daniel Anton

Question

State the similarity and differences between a 'Big Push Model ' and 'O Ring Model '?

Answer 1

Similarity

The similarity between a 'Big Push Model' and the ' O ring Model' is that tasks of production and all inputs must be executed proficiently together in order for any of them to be of high value.

Difference

A big push model uses the assumption of three indivisibilities that are responsible for external economies and thus justify the need for a big push, the O-ring development theory explains why rich countries produce more complicated products, have larger firms and much higher worker productivity than poor countries.