The O Ring Theory Of Economic Development
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The o ring theory of economic development. This paper proposes a production function describing processes subject to mistakes in any of several tasks. The o ring theory of economic development michael kremer this paper proposes a production function describing processes subject to mistakes in any of several tasks. The key feature of this model is positive assortative matching whereby people with similar skill levels work together. The o ring theory of economic development the quarterly journal of economics oxford university press vol.
The o ring theory of economic development is a model of economic development put forward by michael kremer in 1993 which proposes that tasks of production must be executed proficiently together in order for any of them to be of high value. It shows that high skill workers those who make few mistakes will be matched together in equilibrium and that wages and output will rise steeply in skill. Michael kremer formulated the o ring theory in 1993. Also known as the o ring model of economic development this refers to the theory that even the smallest components of a complex production process must be performed properly if the end product of the.
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