April 26 lecture notes

April 26 lecture notes - Lecture Notes A Per Capita Income...

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April 26, 2011 Lecture Notes A.)Per Capita Income a. Early and persistent conception of international economic development i. Economic development entail an increase in per capita income b. National income is a crucial variable i. Divided by the total population to calculate GNP per capita, 1. GNP per capita is an important measure of level of economic development 2. Growth rate of GNP per capita is an important measure of pace of economic development over time B.) Human Development Index (see chart on Slide #24) a. United Nations Development Program (UNDP) has been a leading advocate of human development b. In 1990, the UNDP published first of what was to be an annual Human development report which states that i. People are the real wealth of a nation c. Measures development as reflecting three important components i. Per Capita income – calculated so that higher levels receive declining weights d. Health: measured via life expectancy e. Education: more of an emphasis placed on educational outcomes than enrollment, problem because kids enroll but they may not attend f. Although there appears to be a general positive correlation between GNP per capita and life expectancy and adult literacy, variation from this norm is possible i. For example, Costa Rica has an average life expectancy and an adult literacy rate equivalent to that of the United States its GNP per capita being only slightly over one tenth of the US value 1. These kinds of variations are captured by the human development concept but by the per capita income concept C.) Criticism of the HDI a. Weighting scheme among per capita income, health, and education is arbitrary i. Same cold be said of the per capita income perspective b. “Too political” in assigning declining weights to higher per capita incomes c. Relies on measures for which data are unreliable D.)Defense of HDI a. An upward movement in HDI almost always reflects an improvement in human well-being i. Not always true of per capita income measure b. HDI registers (-) the potential impact of overdevelopment in capturing the ideas of the rich such as heart disease) that reduce the HDI through its health component
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c. HDI is appropriately political
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April 26 lecture notes - Lecture Notes A Per Capita Income...

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