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Flashcards in de2 Deck (40)
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1

Absolute poverty

Meeting only bare subsistence essentials of food, clothing, and shelter to maintain minimum levels of living

2

Subsistence economy

Production is mainly for personal consumption and the standard of living yields no more than the basic necessities

3

Development

The process of improving the quality of all human lives

4

Important aspects of development

raising levels of living (sustenance) through relevant economic growth processes, self–esteem, freedom

5

Developing countries

high rates of population growth, low income per capita, and general economic and technological dependence on developed economies

6

Development economies

Concerned with the efficient allocation of existing scarce (or idle) productive resources and with their sustained growth over time\nAlso deals with the economic, social, political, and institutional mechanism, public and private, that are necessary to bring about rapid and large–scale improvements in levels of living

7

MDC\nLDC

More Developed Countries\nLess Developed Countries

8

LDC's

highly imperfect economies\nconsumers/producers have limited info\nmajor structural changes in both society and economy\nmultiple equilibria possible\ndisequilibrium situations often prevail\nEconomic calculations are dominated by political and social priorities\nOther considerations than utility

9

Value premises

A value judgment reflects personal or class beliefs.. principles, standards, or qualities considered worthwhile or desirable.

10

Social system

the interdependent relationships between economic and noneconomic factors

11

Non–economic variables

Elements of interest to economists in their work but not given monetary value or expressed numerically because of the intangible nature\nE.g. education, health, cultural, political and institutional factors

12

Gross National Income vs. Gross National Product

GNI: Total domestic and foreign output claimed by residents of a country (total value produced within a country (GDP) combined with its income received from other countries)\nGNP: production of any nationals and adding it up

13

Income per Capita

Total GNP of a country divided by total population

14

Trickle down

Rapid gains in overall and per capita GNI growth would “trickle down” to the masses in the forms of jobs and other economic opportunities

15

Development must include:

Acceleration of economic growth, reduction of inequality, and eradication of poverty

16

Sen's "Functionings"

what a person does (or can do) with the commodities of given characteristics that they come to possess or control

17

5 Sources of disparity between real incomes and actual advantages

Personal heterogeneity\nEnvironmental diversities\nVariations in social climate \nDifferences in relational perspectives \nDistribution within family

18

Sen's "Capabilities"

freedom that a person has in terms of the choice of functionings

19

7 factors affect national happiness

Family relationships\nFinancial situation\nWork\nCommunity and friends\nHealth\nPersonal freedom\nPersonal values

20

Absolute underdevelopment

when any of food, shelter, health or protection are absent or in critically short supply

21

Indifference curve

graph showing different bundles of goods between which a consumer is indifferent, downward sloping (due to trade off)

22

Purchasing Power Parity (PPP)

The purchasing power of a country’s currency: the number of units of that currency required to purchase the same basket of goods and services that a US dollar would buy in the US

23

Human Development Index

calculates an index based on longevity (life expectancy), education (literacy), and real per capita PPP GDP

24

Rostow stages model

Stage 1 – Traditional society\nStage 2 – Preconditions for take–off\nStage 3 – Take–off\nStage 4 – Drive to maturity\nStage 5 – Age of (high) mass–consumption

25

Harrod Domar Model

Engine of growth: savings and investment\nS=I=?K=k?Y\nsY=k?Y

26

Lewis Structural Change Model

Two sector model\nWhen MPL > 0, inequality will decrease

27

International–Dependence: Neocolonial Dependence Model

Hub and Spoke model\nUnequal power relationship between rich and poor countries

28

International–Dependence: False Paradigm Model

Underdevelopment is a result of good intentions but inappropriate advice from Western “Experts”

29

International–Dependence: Dualistic Development

“Inferior” versus “superior” set of conditions\nno "trickle–down"\nLewis Model assumes it

30

Neoclassical Counter–Revolution

Advocates of ‘free markets’\n‘Underdevelopment’: a result of bad state intervention