mls 2b - economic growth and development (revised 2)
DESCRIPTION
MLS 2B Group 8 - Economic Growth and Development 2nd RevisionTRANSCRIPT
Economic Growth and Development
MLS 2B – Group 8Baldevieso, Balagosa, Langreo, Lusaya, Sotiar,
Lao
Is an increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice.
Referred to as the quantitative and qualitative changes in an existing economy.
The most accurate method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy
Economic Development
Economic Development Economic Growth
Implications
Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes).
Economic growth refers to an increase in the real output of goods and services in the country.
Measurement
Qualitative.HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc.
Quantitative. Increases in real GDP.
Difference Between Economic and Development
Economic Development Economic Growth
Effect
Brings qualitative and quantitative changes in the economy
Brings quantitative changes in the economy
Relevance
Economic development is more relevant to measure progress and quality of life in developing nations.
Economic growth is a more relevant metric for progress in developed countries. But it's widely used in all countries because growth is a necessary condition for development.
Scope
Concerned with structural changes in the economy
Growth is concerned with increase in the economy's output
Stages of Economic Growth and
Development
Is an increase in a country's real level of national output which can be caused by an increase in the quality of resources (by education etc.), increase in the quantity of resources & improvements in technology or in another way an increase in the value of goods and services produced by every sector of the economy.
It can be measured by an increase in a country's GDP (gross domestic product).
Economic Growth
2.) Pre-conditions: -Development of
mining industries-Increase in capital use in agriculture-Necessity of external funding-Some growth in savings and investment
1.) Traditional Society-subsistence economy
-output not traded or recorded -existence of barter -high levels of agriculture and labor intensive agriculture
3. ) Take off-Increasing industrialization-Further growth in savings and investment-Some regional growth-Number employed in agriculture declines
Rostow’s Model
In 1960, the American Economic Historian, W.W. Rostow suggested that countries must pass through 5 stages to become developed.
4. )Drive to Maturity-Growth becomes self-sustaining -Wealth generation enables further investment in value adding industry and development-Industry more diversified-Increase in levels of technology utilized
5.) High mass consumption-High output levels-Mass consumption of consumer durables-High proportion of employment in service sector
Market Based Development is determined by
the extent to which the market is able to allocate resources
The price signal acts to allocate scarce resources
Governments limit interference in the working of the economy
Government role is to encourage enterprise and to reduce regulation and inefficiencies in free markets and establish ownership of property rights
Formula to Compute
Economic Growth
Gross Domestic Product (GDP) is an estimated value of the total worth of a country’s production and services, within its boundary, by its nationals and foreigners, calculated over the course on one year.
GNP = GDP + NR – NP
Or
GNP= GDP + Net factor income from abroad
Gross National Product (GNP) is an estimated value of the total worth of production and services, by citizens of a country, on its land or on foreign land, calculated over the course on one year.
GNP= Gross National ProductsGDP= Gross Domestic ProductNR= Net income inflow from assets abroad or Net Income ReceiptsNP= Net payment outflow to foreign assets
Methods Used to Assess Economic Development
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Human Development Index (HDI)
A tool developed by the United Nations to measure and rank countries' levels of social and economic development based on:◦ Longevity, measured by life expectancy at birth◦ Knowledge, measured by adult literacy and
number of years children are enrolled at school◦ Standard of living, measured by real GDP
per capita
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A scale from 0 (lowest human development) to 1 (highest human development).
An index of 0 – 0.49 means low development
An index of 0.5 – 0.69 means medium development
An index of 0.7 to 0.79 means high development
Above 0.8 means very high development
Inequality-adjusted Human Development Index (IHDI)
adjusts the Human Development Index (HDI) for inequality in the distribution of each dimension across the population.
IHDI accounts for inequalities in HDI dimensions by ‘discounting’ each dimension’s average value according to its level of inequality.
The IHDI equals the HDI when there is no inequality across people but falls below the HDI as inequality rises. In this sense, the IHDI is the level of human development when inequality is accounted for
Gender Inequality Index (GII)
reflects women’s disadvantage in three dimensions:◦ reproductive health◦ empowerment◦ labor market
The index shows the loss in human development due to inequality between female and male achievements in these dimensions. It ranges from 0, which indicates that women and men fare equally, to 1, which indicates that women fare as poorly as possible in all measured dimensions.
Multidimensional Poverty Index (MPI)
identifies multiple deprivations at the household level in education, health and standard of living.
complements monetary measures of poverty by considering overlapping deprivations suffered by people at the same time.
index identifies deprivations across the same three dimensions as the HDI and shows the number of people who are multi-dimensionally poor and the number of deprivations with which poor households typically contend with.
It can be deconstructed by region, ethnicity and other groupings as well as by dimension, making it an apt tool for policymakers.
Issues and Problems of Economic Growth
Lifestyle Losses Generational Transfers Population Consumption Garbage Pollution
Congestion Natural resource depletion Corruption Economic Growth is unstable Environmental problems
Low Inflation Cheap imports Growing export market Financial surplus Depletion of the global resource base and
the impact of global warming.
Huge expansion of waste and pollution
Over population Species extinction leading to a loss of bio-diversity.
List of Countries According to Economic
Growth
WORLD
ASIA
Top 10 Richest Countries in the
World(based on GDP per Capita)
10. Netherlands
GDP (PPP) per capita: $40,973
http://www.forbes.com/pictures/egim45egde/10-netherlands/
9. Switzerland
GDP (PPP) per capita: $41,950
http://www.forbes.com/pictures/egim45egde/9-switzerland/
8. Hong Kong
GDP (PPP) per capita: $45,944
http://www.forbes.com/pictures/egim45egde/8-hong-kong/
7. United States of America GDP (PPP) per
capita: $46,860
http://www.forbes.com/pictures/egim45egde/7-united-states/
6. United Arab Emirates
GDP (PPP) per capita: $47,439
http://www.forbes.com/pictures/egim45egde/6-united-arab-emirates/
5. Brunei
GDP (PPP) per capita: $48,333
http://www.forbes.com/pictures/egim45egde/5-brunei/
4. Norway
GDP (PPP) per capita: $51,959
http://www.forbes.com/pictures/egim45egde/4-norway/
3. Singapore
GDP (PPP) per capita: $56,694
http://www.forbes.com/pictures/egim45egde/3-singapore/
2. Luxembourg
GDP (PPP) per capita: $81,466
http://www.forbes.com/pictures/egim45egde/2-luxembourg/
1. Qatar
GDP (PPP) per capita: $88,222
http://www.forbes.com/pictures/egim45egde/1-qatar/
Top 10 Poorest Countries in
2014(based on GDP per capita)
https://www.gfmag.com/global-data/economic-data/the-poorest-countries-in-the-world
http://www.gov.ph/report/gdp/
Human Development
Index around the world
Human Development Index in the Philippines
http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/PHL.pdf
http://www.manilatimes.net/70th-117th-saga-decline/118782/