Characteristics Of A Developed Economy

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There is no set criteria for what make a economy developed. When looking at the measures we would expect mostly higher levels of GDP, GNP, advanced infrastructure and standard of life. It is important that we consider both economic and non economic indicators.

A developed Economy is in generally said to be that of a industrialised , sovereign state with highly developed technological infrastructure relative to other nations. More recently new scales such as the Human Development Index (HDI) have been introduced. In this approach we consider three basic areas of a country Health, Education and Living standards which provides a proxy of the level of development. (See appendix A)

Interestingly in recent decades developing countries have been
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Which is a physical excess of the production, which if used effectively can create a profit of which can reinvested i.e Growth. Of-course a surplus must be managed correctly if used unproductively it will become waste ( Meek, 1977) . We can also thing about Slows model of growth, adding more capital and labour with capital investment this effecting the capital labour …show more content…
(Holt 2007, 93). So general theory like this may not always be successful. This is one of the main criticism of the lewis model. In recent decades only a few countries such as South Korea and Taiwan have managed to shift from Agriculture to manufacturing advanced society (El Dorado) . PK economists identified some fundamental difference between developed and developing economies. Once a surplus is in effect and the growth process is initiated one issue is a shortage of productive capacity, not underutilisation. To resolve this requires high levels of investment to support capacity as well as income. Unemployment in developed economies is usual due to a lack of effective demand following a down turn. Contrasty the underdeveloped case differs fundamentally as it is born from a shortage of capital equipment, opposed to just lack of effective demand. ( Kalecki 1960 p. 3 ). As a country develops, it will move from a Marxian regime, where employment is limited by the size of the capital stock, to a Keynesian one ( Kriesler, 2012

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