Econ Dev Ch. 7 +

Econ Dev Ch. 7 + - Chapter5Appendix 19:01

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 5 Appendix 19:01 Appendix 5.1- Appropriate Technology and Emplyment Generation: The Price  Incentive Model Firms are expected to use a combination of capital and labour that minimize  the cost of producing a desired level of output- ranging form high labour  intensive to high capital intensive Massive modern automated factories in developing countries, leave the  majority of the surplus labour unaffected Market wage is relatively higher, due to union, minimum wafe etc. whereas  Capital is artificially high-  factor price distortions It is only natural for firms to utilize capital, but government policy should be  set in place to counter this- for the greater society The Possibilities of Labor-Capital Substitution Elasticity of factor substitutions- In general in developing countries, the  reduction of wages by 10% will lead to a 5-10% increase in employment Appendix 5.2- Ahluwaia-Chenery Welfar Index Moving away from GNI indictors, to eradication of general poverty GNI is a calculation of the top 40% wealth, therefore misleading This way we are able to weight each quintile o G=0g1+0g2+0g3+0g4+0g5=1g5 (meaning that g5, or top quintile has  100% of the wealth) o G=0.05g1+0.09g2+0.13g3+0.22g4+0.51g5 If bottom 60% have zero growth but top 40%=10%up o G=0.05(0)+0.09(0)+0.13(0)+0.22(.10)+0.51(.10)=.073 o Therefore a rise in 7.3%- but 60% is no better off than before 1% growth in lowest quintile carried more than 10X the weight than the  top quintile Weighted not by proportion of total income, but rather by equal of total  population makes things more even- this gives us a more accurate measure  welfare increase of 4%, even though GNI still increases by 7 Measure is arbitrary depending on Goals, but GNI is wealthy weighted- GNI  weight, Equal Weight and Poverty Weights 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 7- Urabnization and Rural-Urban Migration 19:01 Urbanization: Trends and Projections
Background image of page 2
Chapter 7- Urabnization and Rural-Urban Migration 19:01 Generally the more developed the country, the higher share of population  living in urban areas Todays poorest countries are far more urbanized than developed countries  were at a comparable level of development Urbanization is occurring everywhere, high and low income o By 2025, estimated that 80% of urban dwellers will be in developing  countries Estimates will change from 1995 list- with Bombay, Lagos and Shanghai three  most populated in the world- of the 15 only two will be from the developed  world- Tokyo and New York For the first time in history- world urban population is about the same size as  the rural
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

Econ Dev Ch. 7 + - Chapter5Appendix 19:01

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online