Term
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Definition
-Emergence of Linear stages of growth models
-Marshall Plan
-Capital as most important factor of production
-I = accumulation of K |
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Term
70s
Structural Change Models
Lewis Model |
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Definition
| -Economy shifts from agricultural to industrial |
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Term
80s
Neo Classical Growth Models |
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Definition
| -Free market, capitalist principles |
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Term
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Definition
| Endogenous Growth Theories |
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Term
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Definition
-Microeconomic analysis
-making individuals better off
-empirical analysis |
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Term
Rostows Theory
-Linear Stage of Growth Model |
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Definition
-Developing countries should follow patterns of growth that developed countries followed
Stages:
1)Traditional underdeveloped society
2)Preconditions for takeoff
3)Take off (beginning development)
4)Maturing process of growth
5)Mature: mass consumption |
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Term
Harrod-Domar Model
(Closed Economy Model, savings =investment) |
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Definition
1)Assumes all I is used to buy new K
2)Assumes fixed ration between K and Q
3)Nation saves a fraction of income
4)Growth occurs from increasing savings or decreasing consumption |
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Term
Lewis Model
(Structural Change) |
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Definition
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Term
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Definition
-Urbanization is a driving factor of development
-Wage differentials must be large enough for labor to switch industries |
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Term
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Definition
-K might not be available for purchase
-Assumes full employment and surplus of Labor in Agriculture
-Human Capital is not accounted for
-Assumes new K is of same technology level
(K actually evolves with development and becomes labor saving) |
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Term
| Causes of shift from steady state in Lewis model |
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Definition
1. Gift or destruction of K
2. Shift in population growth or capital depreciation rate
3. Change in savings rate |
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Term
|
Definition
-Try to explain how technological progress is achieved
-Includes factors other than K and L
Y= A*F(K,L,H) where H also explains output |
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Term
|
Definition
| Y= A*F(K,L) where A captures what L and K doesn't explain |
|
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Term
False Paradigm
(International Dependency Theory) |
|
Definition
-Underdevelopment caused by well meaning but inappropriate advise from well meaning countries or agencies
-Expert advisers are out of touch
-recommended policies fail due to misunderstanding of political conditions |
|
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Term
Neo Colonial
(International Dependency Theory) |
|
Definition
-Rich are intentionally exploitive or neglectful
-Rich are of industrialized countries or "Elite Few" in developing countries
-Rich made decisions benefit a few at the cost of the majority |
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Term
|
Definition
-World consists of RIch & Poor countries
-One group must have the other in order to exist
-inequality is required for development |
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Term
| Best measure of economic growth for comparison among countries |
|
Definition
| Adjusted for purchasing power parity |
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Term
| Broad Components of economic development that contribute to the Human Development Index |
|
Definition
1. Education
2. Health
3. Income (I) or standard of living (GNP) |
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Term
|
Definition
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Term
|
Definition
| (current yr- base yr)/ base yr |
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Term
| Firm hires additional workers until: |
|
Definition
| wage = marginal revenue product of labor (MRPL) |
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Term
|
Definition
| additional output for every 1 unit increase of labor |
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Term
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Definition
| Additional revenue that 1 more worker will bring to the firm |
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Term
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Definition
| Living on $1 a day (adjusted) |
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Term
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Definition
| sum of all goods and services produced within a countries borders |
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Term
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Definition
| Sum of all goods and services produced by a country's citizens |
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Term
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Definition
| Used by World Bank to classify income levels |
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Term
|
Definition
Real is adjusted for inflation
-nominal can only be used if analysis is not dependent on time |
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Term
|
Definition
Measure of:
-I (Standard of living, real per capita GDP, and PPP adjusted)
-H (Health, life expectancy)
-E (Education, literacy and enrollment rates) |
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Term
| Millennium Development Goals |
|
Definition
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development |
|
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Term
|
Definition
Low: $1,354
lower middle: $4,589
Upper middle: $12,208
High: $37,665 |
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Term
| Convergence vs Divergence |
|
Definition
convergence: Growth in per capita GDP in LCD > pc GDP growth in developed country
divergence: Growth in per capita GDP in LCD < pc GDP growth in developed country |
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Term
|
Definition
-LCD's leapfrog technology
-Diminishing marginal returns in developed countries for K |
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Term
|
Definition
-Some technologies are not appropriate if the LCD lacks infrastructure
-Political/infrastructure environment impedes growth |
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