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Unformatted text preview: Study Guide for Midterm 1 Econ 114, Summer 2010 I. Chapter 1 & 2: Introduction a. Measures of Development i. GDP per capita 1. Comparing across countries – PPP 2. Criticisms ii. GDP growth rates 1. Calculations iii. Human Development Index (HDI) 1. Measure of quality of life (education, health, life expectancy & GDP per capita) iv. Income Inequity b. Interpreting Data i. Correlation vs. Causation II. Chapter 3: Physical Capital a. History of Development Theories i. Early Models: Structural Change and Stages of Growth 1. Criticisms ii. International Dependence 1. Criticisms iii. Neo‐Classical Growth Models 1. Difference from previous models 2. Criticisms b. Solow Growth Model i. Factors of Production ii. Assumption of Diminishing Marginal Product iii. Cobb‐Douglas Production Function 1. Y = A*Kα L1‐α 2. y = A*k α 3. Capital Share of Income: α iv. Capital Accumulation 1. kt +1 = (1 − δ ) ⋅ kt + γ ⋅ y(kt ) v. Steady State 1. Δk = 0 ⇒ δk ss = γ ⋅ y (k ss ) vi. Predictions 1. An increase in de...
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This note was uploaded on 12/05/2010 for the course ECON 114 taught by Professor Cindybenelli during the Summer '08 term at UCSB.
- Summer '08