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TheBig Push Model is a concept indevelopment economics orwelfare economics that emphasizes the fact that afirm's decision whether to industrialize or not depends on the expectation of what other firms will do. It assumeseconomies of scale andoligopolistic market structure. It also explains when theindustrialization would happen.
The major contributions to the concept of the Big Push were made byPaul Rosenstein-Rodan in 1943 and later on byMurphy,Shleifer andVishny in 1989. Also, some contributions ofMatsuyama (1992),Krugman (1991) andRomer (1986) proved to be seminal for later literature on the Big Push.
Analysis of this economic model usually involves usinggame theory.[citation needed]
The hallmark of the ‘big-push’ approach lies in the reaping of external economies through the simultaneous installation of a host of technically interdependent industries. But before that could become possible, we have to overcome the economic indivisibilities by moving forward by a certain “minimum indivisible step”. This can be realised through the injection of an initial big dose of a certain size of investment.[citation needed]
