Carmona, Juliana Mae S.

Growth and Development: Reflection

What were some highlights of the

Video
 International
Video 1: International  International trade is critical to the
Trade – Theory Empirics
Lecture – 57
East Asian Miracle – I
 International trade is the discipline
 South Korea went from poverty to
Video 2: Secrets Behind
Korea’s Economic
Success
 Some individuals believe that South
videos that gave you important
information?
trade enables
countries to expand their markets
and access commodities and
services that would not otherwise
be accessible locally. The market
has become more competitive as a
result of international commerce.
This international trade, in turn,
leads to more competitive pricing
and a lower-cost product for the
consumer.
economy of any particular country.
It enables the population's
demands to be met and
encourages the country's internal
growth.
of economics dealing with the
exchange of products between
countries. It is the transportation of
products and services from one
geographical boundary to another.
It conducts business with other
countries. However, it is merely a
continuation of internal or domestic
commerce.
prosperity in a short period. This
success is arguably the least
contentious of the hypotheses
offered to explain the South Korean
economic miracle. Economists and
officials of all political stripes believe
that developing human capital via
substantial investments in
education is one of the Asian
nation's secrets to success. Other
hypotheses are more complicated
and have much more detractors.
Korea's wealth is due to its culture.
Many alternative theories for what
transpired in South Korea have
been floated throughout the years.
Others contended that the issue
was culture, namely Asian culture
inspired by Confucius and his focus
on order, commitment to the
Why do these highlights tell What questions can you
you about? relate these highlights with?
Smaller countries should gain 1. Does a developing country
more from trade based on like the Philippines
comparative advantage than actually benefit from
larger countries. This reason is international trade?
that the benefits of comparative 2. What, if any, difficulties or
advantage are proportionate to challenges exist in
the difference between relative international trade?
pricing in international markets 3. What role does
and compare prices in home international trade play in
markets if the transaction does economic development?
not exist. If the gap is
significant, a country gains a
considerable benefit through
trade. If the difference is
modest, trading provides just a
marginal benefit. Smaller
nations are more likely than
larger ones to discover that
relative pricing in the global
market differs considerably
from those in their domestic
markets.
A robust business climate 1. Can the Philippines
promotes local growth and replicate Korea's success?
attracts international 2. Is it true that cultural
investment. To encourage conservation, or simply
prosperity, South Korea has culture, is the key to
prioritized technological success? Can other
development and innovation. developing countries use it
South Korean export for their economic
competitiveness has been development?
backed by innovation and 3. What hurdles or difficulties
technology, which has driven did Korea experience prior
the country's spectacular to achieving economic
economic growth over the last success?
decades.
Koreans have a goal in mind
and will go to any length to
achieve it. “Juk-gi-sal-ki-ro”
means “life or death” in Korean
and is used to signify
tremendous hard effort and
preparedness.
 common good, and respect for
hierarchies, all of which were
formerly portrayed as ideal for
economic progress.
 Two more reasons have
contributed to South Korea's
increased foreign commerce and
industrialization:
o An improvement in the
business climate
o Policies that encourage
investment in innovation
 Historians have cited several
causes for the Industrial Revolution,
including the rise of capitalism,
European imperialism, coal mining
activities, and the consequences of
the Agricultural Revolution.
 The Agricultural Revolution resulted
in new agricultural practices, the
use of farm machinery, and an
expansion in private ownership of
land.
o Lord Turnip Townshend
popularized crop rotation,
Video 3: Causes of the which enabled British farmers
Industrial Revolution to grow more crops more
quickly.
The Agricultural o The Rotherham triangle
Revolution in England plough, with an iron blade
lighter and simpler to wield
than the typical wooden
plough, was patented by
Joseph Foljambe.
o Jethro Tull created the seed
drill, enabling farmers to sow
crops more quickly and in
straight lines.
o The Enclosure Movement
resulted in greater private
ownership of farms in Britain,
forcing smaller farmers off their
customary land.
 Before the 1997 Asian financial
crisis, the Four Asian Tiger
countries (dubbed "the Asian
Miracle") ascribed to export-
oriented policies and aggressive
Video 4: The Secret of development plans. These
the “Asian Economic economies distinguish by their
Miracle” continuous fast development and
high levels of income equality. Two
development policies, among
others, are to blame for the Asian
miracle: factor accumulation and
macroeconomic management.
The Agricultural Revolution 1. What impact has the
was indeed a significant Agricultural Revolution?
contributor to the Industrial 2. Was the Agricultural
Revolution. In the 17th century, Revolution better and
Britain saw the Agricultural more significant than the
Revolution, which included Industrial Revolution?
discoveries and advancements
3. How does the Industrial
that increased food production.
Revolution compare to the
As previously noted, more
excellent food supply allowed Agricultural Revolution?
England's population to grow,
which aided the Industrial
Revolution in two ways. For
starters, the growing
population aided in producing
employees for the industries
and mines, which was vital to
the Industrial Revolution.
Second, the increased
population generated a market
for commodities to be sold to,
allowing factory owners to profit
from selling their goods.
The Miracle is primarily a 1. Can developing countries
success of capitalism, but it now achieve the "Asian
also demonstrates that Economic Miracle"?
economic development is 2. Corruption is one of the
dependent on carefully problems that have
shielding some sectors of the plagued the miracle
economy from market economies; is it
pressures. The single most conceivable that it is the
potent principle driving the East cause for the lack of
Asian Economic Miracle is progress in emerging
export discipline. The concept nations with corrupt
is straightforward: the only way governments?
to create money is to create
  The establishment of stable
macroeconomic settings served as
the foundation for the Asian miracle.
Each of the Four Asian Tiger
nations handled three factors with
varying degrees of success: budget
deficits, foreign debt, and currency
rates. Each Tiger nation's budget
deficits were managed within its
financial constraints to not disrupt
the macro-economy.
 The de facto cause for the growth of
these Four Asian Tiger economies
has been exported policy. Each of
the four countries has chosen a
different strategy. Hong Kong and
Singapore implemented neoliberal
trade regimes that favored free
trade, but South Korea and Taiwan
chose mixed powers that
accommodated their export
sectors. Local pricing in Hong Kong
and Singapore is tied to
international prices due to their
limited domestic markets. South
Korea and Taiwan have
implemented export incentives for
the traded goods industry.
 These four countries concentrated
extensively on infrastructure and
education to benefit their countries
through trained employees and
higher-level employment such as
engineers and physicians. The
program was essentially practical,
and it aided the countries'
development into more
sophisticated, high-income
industrialized, developed countries.
 The role of Confucianism is one of
the things to explain the Four Asian
Tigers' success.
 The economic developments of the
18th century saw the transformation
of agricultural and handicraft
civilizations in Europe and America
into industrialized urban
economies. The phrase used to
Video 5: The Industrial
characterize this phenomenon is
Revolution (18th-19th
the "Industrial Revolution," which
Century)
was coined by French writers but
popularized by English economic
historian Arnold Toynbee.
 The Industrial Revolution changed
agriculture and handicraft
economies into economies based
something that people in other 3. What should the
nations want to purchase, yet government do to enhance
impoverished countries have a the Philippine economy's
comparative disadvantage in quality?
sophisticated manufacturing.
Corruption has plagued all
Miracle economies, but it
appears to be a byproduct of
wealth growth. After all, there
can only be anything taken if
there is something to steal.
A shockingly high degree of
corruption, like inflation, is
tolerated in the near term but
ultimately becomes a problem.
While it is difficult to quantify,
the accurate heuristic is that
bribery is prosocial in a rising
market when it aids in the
circumvention of norms that
inhibit wealth development. It
becomes an issue when the
threat of corruption drives the
adoption of regulations that
stifle progress.
The Industrial Revolution 1. How did the Industrial
improved total wealth and Revolution affect people's
dispersed it even more broadly self-sufficiency?
than in previous eras, 2. Is the Industrial Revolution
contributing to the expansion of beneficial or detrimental to
the middle class. However, the working-class people?
factory system and mass 3. Did the Industrial
production replaced the Revolution improve or
domestic system of industrial deteriorate life?
output, in which self-sufficient
artisans started working inside
or near their households. Also,
it subjected a significant
amount of people, such as
 on large-scale industry, automated
production, and the factory system.
 Existing sectors become more
productive and efficient due to new
equipment, new power sources,
and new ways of arranging labor.
New industries developed as well,
notably the automobile industry in
the late nineteenth century.
 W. Arthur Lewis' most notable
contribution to economic
development was his seminal work
on the transfer of labor from a
subsistence or agricultural sector to
a capitalist industry in the presence
of unlimited labor supply.
 Wages in the modern capitalist
sector, according to this model, are
decided by the opportunity cost of
labor rather than its productivity. As
the sector grows, so do
employment and output, and the
percentage of profits (savings) in
national income grows. As the
Video 6: Lewis Model
excess labor is depleted, the wage
rate rises. At this time, the economy
transitions from a dual to a single
integrated labor market, and real
wages rise in tandem with
increasing productivity, as
predicted by traditional growth
models.
 The transition process or structural
reform, according to Lewis' model,
begins with an individual increase in
consumption in industry owing to
differences in national customer
preferences, overseas markets, or
government expenditures.
women and children, to long
hours of tedious and often
dangerous work at minimum
wages. In the mid-nineteenth
century, their unfortunate
working circumstances gave
rise to the labor union
movement.
When agricultural productivity 1. Is the Lewis Economic
grows to the point where the Development Model still
supply price of labor rises, i.e., relevant for developing
when agricultural alternatives countries?
of production and income are 2. What are some of the
sufficiently appealing to would- Lewis model's flaws or
be industrial employees to weaknesses?
keep them in farming, the 3. What are the limitations of
process grinds to a standstill. In the Arthur Lewis economic
the absence of variations in the development model?
cost of living between rural and
urban areas, this occurs when
the marginal product of labor in
the two sectors is identical.
Lewis hypothesizes the
presence of a subsistence
sector with surplus labor and
sees this as the germ of the
subsistence sector. One key
feature of the capitalist sector is
that it employs replicable
capital and generates profit.