Ch21 SH - Economic Growth in Developing and Transitional...

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Life in the Developing Nations: Population and Poverty Economic Development: Sources and Strategies The Sources of Economic Development Strategies for Economic Development Growth versus Development: The Policy Cycle Two Examples of Development: China and India Issues in Economic Development Population Growth The Transition to a Market Economy Six Basic Requirements for Successful Transition Economic Growth in Developing and Transitional Economies
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Economic Growth in Developing and Transitional Economies All economic analysis deals with the problem of making choices under conditions of scarcity, and the problem of satisfying people’s wants and needs is as real for Somalia and Haiti as it is for the United States, Germany, and Japan. The universality of scarcity is what makes economic analysis relevant to all nations, regardless of their level of material well-being or ruling political ideology. Even though economic problems and the policy instruments available to tackle them vary across nations, economic thinking about these problems can be transferred easily from one setting to another.
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Life in the Developing Nations: Population and Poverty Indicators of Economic Development Country Group Population, 2006 Gross National Income per Capita, 2006 (dollars) Literacy Rate (percent over 15 years of age) Infant Mortality, 2006 (deaths before age 5 per 1,000 births) Internet Users per 1,000 people, 2005 Low-income 2.3 billion 510 29 122.0 30 Lower middle- income 2.4 billion 1,580 75 42.0 47 Upper middle- income 575.9 million 4,770 243 29.7 72 High-income 1.0 billion 32,040 2,977 7.0 76 Source: World Bank, www.worldbank.org
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Life in the Developing Nations: Population and Poverty While the developed nations account for only about one quarter of the world’s population, they are estimated to consume three-quarters of the world’s output. This leaves the developing countries with about three-fourths of the world’s people but only one-fourth of the world’s income. The simple result is that most of our planet’s population is poor.
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The Sources of Economic Development Vicious-circle-of-poverty hypothesis Suggests that poverty is self-perpetuating because poor nations are unable to save and invest enough to accumulate the capital stock that would help them grow. Capital flight    The tendency for both human capital and  financial capital to leave developing countries in search of  higher expected rates of return elsewhere with less risk. Capital
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This note was uploaded on 02/02/2012 for the course ECON 201 taught by Professor Shea during the Spring '08 term at Maryland.

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Ch21 SH - Economic Growth in Developing and Transitional...

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