Econ 366 notes - Econ 366 notes Subsistence economy- little...

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Econ 366 notes Subsistence economy- little money income because most food, lothing, shelter and goods are made and consumed by people themselves Adam smith—first development exonomist- wealth of nations 1776 Traditional economics- concerned with efficient, least-cost allocation of scarce productive resources and with optimal growth of these resources over time to produce an expanding range of goods and services (neoclassical economics) -materialistic, individualistic, self interested- consumer sovereignty, private profit political economy- social and institutional processes through which certain groups of economic and political elites influence the allocation of scarce productive resources development economics- deals with eco, social, political, institutional mechanisms, public and private, necessary to bring about large scale and rapid improvements in levels of living for people -LDCs- consumers and producers have limited info, disequilibrium systems prevail, preserving religious/cultural traditions…family/clan/tribal considerations take precedence over profit-maximizing calculations social system- interdependent relationships between economic and noneconomic factors (ie attitudes toward life, work, authority, legal structures, degree of participation in gov agences, flexibility/rigidity of social classes development (economic def)- capacity of national economy whose initial economic conditions has been more/less static for a long time, to generate and sustain an annual incease in its GNI real GNI per capita (monetary growth of GNI/capita- rate of inflation) -previously development was seen has rapid changes in GNI growth would trickle down to masses in form of jobs (poverty, discrimination, income dist were of secondary importance) 1950s and 1960s- growth levels achieved but still disparities and underdevelopment 1970s- eco dev was redefined in terms of elimination of poverty, inequality, unemployment underdevelopment affects3 billion Sen’s Capabilities Approach- what matters is not just characteristics of commodities consumed but what use the consumer can and does make of commodities -must address the f unctioning’s ----what a person can do with the commodities of given characteristics that they possess/control five sources of disparity bettwen real incomes and actual advantages
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1) personal heterogeneities (ie disability, illeness) 2) environmental diversities (clothes in cold, diseases in tropics 3) variations in social climate (ie presence of crime/violence) 4) differences in relational perspective (ie if a person is relatively poor in rich community but absolute, not so poor. .appearing in public without shame a.
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Econ 366 notes - Econ 366 notes Subsistence economy- little...

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