In lecture ten you will learn about the informality

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In lecture ten you will learn about the informality of MFIs. You will learn that informal nature of the micro financial institutions is based on the social capital. In the first part, you will study the challenges of informality through case studies. In the second part, we discuss the challenges faced by micro-financing institutions. In section three, you will learn how to make micro institutions work. 7
INTRODUCTION 8 LECTURE ONE: BASIC CONCEPTS OF ECONOMIC DEVELOPMENT
This premier lecture discusses economic growth. After defining economic growth, we shall discuss the determinants of growth. In addition, we shall analyse some traditional theories of economic growth. Then we shall differentiate between economic growth and development as defined by the United Nations. In the first lesson, we begin by exploring the basic concept of economic development and the conditions for growth. The second part discuses the determinants of growth. OBJECTIVES By the end of this lecture, you should be able to: a. Relate economic growth to development. b. Analyse the relevance of different theories economic growth. c. Discuss the determinants of trade. d. Explain why some countries are more economically developed than others 9
1.1. Economic development and growth Economic growth and development have been debated for centuries. Industrialization had brought forth permanent changes in the economic and human activity. After the Great Depression (1929-1933), the importance of these processes increased. Overcoming any economic difficulties, whether we speak about the decreasing unemployment rate or about the external equilibrium, there is a correlation between economic growth and development. Any decision made at a state or a higher level is aimed at reaching these two objectives. Today, more than anytime, in a recessionary, liberalized economy, in a world marked by a strong demographic increase, and the depletion of natural resources, by changes of climate and of ecosystem destruction, we are more preoccupied than ever by the problems of economic growth and development. Economic Growth and Development – Conceptual Approach Though there is no unanimously accepted theory of growth. Most theoreticians think of the economic development as a process that generates economic, social, quantitative and, particularly, qualitative changes, which causes the national economy to cumulatively and durably increase its real national product. In contrast and compared to development, economic growth is, in a limited sense, an increase of the national income per capita. It involves the analysis, especially in quantitative terms, of this process, with a focus on the functional relations between the endogenous (external) variables. In a wider sense, it involves the increase of the GDP, GNP and NI, and therefore of the national wealth, including the production capacity, which could be expressed in both absolute and relative size, or in per capita. It includes also the structural modifications of the economy.

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