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basic necessities of life (food, shelter, and clothing) -development: process of improving quality of all human lives/capabilities by raising people’s levels of living, self-esteem, and freedom -development economics: how econ transformed from stagnation to growth and from low to high income status, and overcome problems of absolute poverty -> deal with econ, social, political, and institutional mechanisms necessary for rapid and large-scale improvements in levels of living -TRAD meaning: emphasizes utility, profit maximization, market efficiency, and determination of equilibrium; achieve sustained growth of income per capita to enable nation to expand its output at a rate faster than growth rate of its population. GNI used to measure overall economic well-being of a population (how much real goods/services is available to avg citizen for consumption/investment). Strategies focused on rapid industrialization at expense of agriculture and rural development. Emphasis on increased output, measured by GDP. -NEW: reduction/elimination of poverty, inequality, and unemployment within growing economy. “redistribution from growth” as slogan. More broadly understood, leads to improvement in wellbeing not just income. -AMARTYA SEN’S CAPABILITY: “capability to function” is what really matters for status (ex being able to live long, being well-nourished, healthy, literate, mobile, take part of community, happy as state of being). Matters more what people is or can be and what he does or can do; functionings – what a person does/can do with the commodities of given characteristics that they come to possess of control/achievement (ex. Freedom of choice/control of one life is central aspect of most understandings of well-beings). Five sources of disparity between real incomes/actual advantages- personal heterogeneities, environmental diversities, variations in social climate, distribution within the family, differences in relational perspectives. Capabilities – freedoms that people have, given their personal features and their command over commodities (ex. More emphasis on health/education b/c needed to convert characteristics of commodities into functionings). -CORE VALUES: Sustenance (basic needs), self-esteem, freedom from servitude (able to choose) -OBJ: increase availability of life-sustaining goods, raise levels of living, and expand range of economic and social choices -MDGS: 1) eradicate extreme poverty/hunger. 2) achieve universal primary education. 3) promote gender equality and empower women. 4) reduce child mortality. 5) improve maternal health. 6) combat hiv/aids, malaria, other diseases. 7) ensure environmental sustainability. 8) develop global partnership for development BY 2015 reduce by half the proportion of ppl living on less than $1/day, who suffer from hunger CHAPTER 2 -DIFF: population, geographic size, natural resource endowments, language/religion, exp in colonial era, levels of educ, industrial structure, role of govt/degree of democracy, degree of dependency in intl econ and political affairs, -SIM: low levels of living/productivity, high pop growth and dependency burdens, dependence on agri and primary export, imperfect markets/incomplete information, intl relations
lower levels of industrialization and manufactured exports (higher dependence on primary exports. crude birth rate. .553)-0/0. higher levels of inequality and absolute poverty (contribute to world poverty). larger rural pop but rapid rural-urban migration. raw materials. GDP. most consequential change is that now computer with geometric mean -EXAMPLE: Indicators: life expectancy at birth (yrs) 73.4.pop LE – 25/max pop LE (85)-25 ED index -> adult literacy index 2/3(%) + gross enrollment 1/3 (%) -varies among groups within countries. also about human capital -NEW HDI 2010: takes cube root of product of 3 component indexes (TRAD assumed one component traded off against another as perfect substitutes).> holistic measure of living levels.GNI.-INDICATORS OF DVPT: real income. reformulation allows for imperfect substitutability -GNI replaces GDP. greater social fractionalization (sign ethnic.663 -CHARACTERISTICS: lower levels of living and productivity. lower income dep on small number of agri and mineral exports). no stable and trustworth currency. rate of undernourishment. GNI per capita (PPP US $) 7.553 ED index: √0.568 Exp years: 11. lower levels of human capital (health. infrastructure of roads/utilities lacking resulting in low transport and communication costs to have interregional trade. linguistic. equal 1/3 weight for all. higher population growth rates (crude birth rate: number of kids born alive/year per 1000pop).000:maxPPP) – log(100) LE index . adult literacy) -HDI: health. mean years of schooling 7. life expectancy. different types of units so hard to know what equal weight is. health/education – life expectancy. lack well-developed and efficien regulate system of banking/indurance with access and formal credit markets that give out loans and enforce repayment. educ.5-20)/(83.4-0/20. rural and urban areas.2-0=0. underdeveloped financial and other markets (legal/indstitutional foundations for markets are weak -> lack legal system that enforces contracts and validates property rights. Imperfect market (small #of buyers/sellers.589 INC index: ln(7263)-ln(163)/ln(108211)-ln(163)=0.847x0. adverse geography (resource endowment: nation’s supply of usuable factors of prod like mineral deposits.2-20)=0. lack social norms for long-term biz relationships.951-0=0. quan/qual of prod and resources. # of units of foreign country’s currency required to purchase identical quantity of goods/services in local developing country market as $1 would buy in US). and other social divisions within country).263 LE Index: (73. -TRAD HDI: 1/3 (income index) + 1/3 (life expectancy index) + 1/3 (education index) Income index – log(PPP GDP/capita) – log(100)/log(40. max values of each part has been increased. ADV: show country’s potential for improvement.589x0. Drawback: gross enrollment overstates amt of schooling (doesn’t consider drop outs). exp years of schooling 11.6-0=0. health.584 HDI: (o. regions in country. lower goalpost for income.847 Mean years: 7. labor -> low). under-5 mortality.568x0.584)^(1/3)=0. PPP (calc of gni using common set of international prices for all goods/services. skills). lack market info for consumers and produces abour prices.5-0/13. no sttention to role of quality. education .5. education index revamped: average actual education attainment of whole pop and expected attainment of today’s kids (ambigious). show that development is more than just income.5. education .
pop size/distribution/growth (pop increasing and growth rate). shows actual quantitative relationship between . World-as-one country convergence CHAPTER 5: -MEASURE INEQ&POV: size distributions (divide pop in quintiles 5ths or deciles 10ths according to ascending income levels and determine what proportion of total national income is received by each income group. private property. Measured by area between line and Lorenz curve/total area of everything after line (triangle). historic role of international migration (larger brain drain now. emigration of highly edu/skilled pros and techs moving to developed world. personal taxation. dev countries use tariff/nontariff barriers to trade. the closer curve is to line. greater degree of inequality represented as farther away. terms of trade declined. population-weighted relative country convergence. Gini coefficients (aggregate measure of inequality ranging from 0 eq to 1 ineq.). colonial legacy and external dependence (institutions. poor in less temperate and unfavorable geo conditions). fewer migration possibilities). but increasing evidence of per capita income converagence (weighting changes in per capita income by population size). other restrictions. Cannot be above line because no one has perfect equality or inequality. Absolute country convergence. efficacy of domestic institutions (developed countries have stronger political stability and more flexible social institusions with broader access to mobility. the more equal. climate differences (most successful in temperate zone. evidence for this is weak. developing countries good at being lower-cost producers. %of income (y) by % of pop (x). taxes in case rather than in kind -RICHvPOOR: physical and human resource endowments (less now). poor less stable/flexible). limited). international trade benefits (free trade-goods be import/export without any barriers in forms of tariffs. . see disproportionate distribution of total natl income among households). per capita incomes and levels of GDP in relation to the rest of the world (lower). Relative country convergence (examine whether poorer countries are growing faster.barriers to entry and incomplete info: absence of info that produ/consumers need to make efficient decisions resulting in underperforming markets). Lorenz curves (depicts variance of size distribution of income from perfect equality. quotas. no financial resources or this to know what their best long-term econ interests are. greater cultural heterogeneity -CONV/DIV: evidence of unconditional convergence is hard to find. fewer benefits from intl trade). dff in growth conditions). etc. import quotas. catch up to rich. basic scientific/tech r&d capabilities (devping at a disadvantage.
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