Midterm Notes

Midterm Notes - 09/05/2007 Development: takes into account...

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09/05/2007 Development : takes into account political and social changes -growth does not necessarily mean development Some Processes in Contemporary World: 1) Globalization: ↑trade flows, ↑capital flows, ↑labor flows, ↑idea/tech flows 2) Integration: regional level i.e. the EU 3) Transition: aka Liberalization (planning market) 4) Growth 5) Development (4+5 =goals) G+D Common Aspects: -both long run in nature -trajectory (path over time) -degree of “progress” over time Growth quantitative ↑income/output (ex:GDP) size of economy “ per capita (GDP/pop) avg. standard of living Production Functions Y=f(L,Lan,K,T) Y:RGDP, L:labor, Lan:land, K: physical and human capital, T: technology Graph: Development : broader concept, more qualitative 1) Growth + “change” corollary changes that go w/ development 2) Broadly based increases in standard of living Corollary Changes that go with Development: 1) Structural Change: Agriculture Industry Services; Primary Secondary Tertiary 2) Improved Social Indicators: ↑literacy, ↑ life expectancy, ↓infant mortality, ↓ fertility rate
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3) Other social/economic changes: -Urbanization, environmental, equality+inequality, value/attitudes/institutions Institutions: 1) Political: ↑democracies, ↑political + civil liberties 2) Legal System: ↑property rights 3) Business Practices: ↑transparent, ↑impersonal Comparing + Classifying Countries (Terminology Now + Past) 1) Backward vs. Advanced : too static (looking at a point in time), ignores dualism (some parts very backward while some are advanced) 2) 1 st , 2 nd , 3 rd World Countries 1 st : Industrial Market Economies 2 nd : No longer exists, Industrial Planned Economies 3 rd : the rest 3) North (richer) vs. South (pooper) (hemispheres) 4) LDCs (developing) vs. MDC (industrialized) Quantitative Systems of Comparison: 1) World Bank System income/capita (GNI/person) “proxy for level of development” High Income: HIC Middle Income (Upper Middle , Lower Middle) UMC +LMC Low Income: LIC -Doha Round: to get poorer countries to export to richer countries (find ways to lower tariffs and get richer countries to lower subsidies on agriculture) Issues: *ignores distribution & allocation for what is produced, *understates standard of living of poorest countries -atlas method: uses avg. of exchange rate to convert. -Purchasing Power Parity (PPP): uses exchange rate that is more representative -Subsistence Agriculture: poor family farms produce for own consumption
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-Informal Sector: street market vendors, black market, etc. 2) UN System: uses HDI (adhoc) 0<HDI<1 “Human development is a process that enlarges the range of human choices.” HDI: ∑3 indexes/3 (avg) High: (≥.800), Med: (.500-.799), Low:(<.500) 1) Decent Living Standards: GDP/person PPP (0-1) 2) Longevity: Life expectancy at birth (0-1) 3) Knowledge: Literacy (2/3), School Enrollment (1/3) educ. Attainment index (0-1) *New Statistic: GDP Rank-HDI Rank 1) >0 (ex. 50
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This test prep was uploaded on 04/21/2008 for the course EC 321 taught by Professor Kuntz during the Fall '08 term at Bentley.

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Midterm Notes - 09/05/2007 Development: takes into account...

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