Assignment 1 - further improvement even in rich countries...

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Assignment 1 Must be submitted online by 4pm on Thursday, 2/18: 1.Identify two problems with the HDI (in what ways does it leave out or misrepresent factors that should be taken into account when measuring a country’s level of “development”? 2.Identify any developing country that violates one of the “Common features of developing countries”. Discuss this in a short paragraph. (Sources: World Bank website, Wikipedia) 3.Think of any one important way in which the assumptions of the Harrod-Domarmodel do not fit the real world. In other words, what additional features of countries need to be taken into account to better map growth? 1) The HDI purportedly gives equal weights to three different outcomes, but bounding the results between 0 and 1 builds in a massive bias against GDP. GDP per capita has grown enormously during the last two centuries, and will continue to do so. In reality, there's plenty of room left for
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Unformatted text preview: further improvement even in rich countries. But the HDI doesn't allow this. Since rich countries are already close to the upper bound, the HDI will not fairly represent the actual level of development. Another possible drawback of HDI is the overstatement of the amount of schooling. In many countries a student who begins a primary school is counted as enrolled without considering the fact that the student might drop out at one stage and thus bias the actual statistics. 2) One common misperception is that result from country’s being too small to be self sufficient. However there is no necessary coloration between country size in population or area and economic development. For example some small countries in Europe such as Andorra, Monaco, Liechtenstein and San Marino have very high income per capita....
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This note was uploaded on 03/02/2010 for the course ECON 633 taught by Professor Guild during the Spring '10 term at Aarhus Universitet.

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Assignment 1 - further improvement even in rich countries...

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