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26 Cards in this Set
- Front
- Back
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what is the unit of measurement used to view traditional development? |
Growth of Income per capita |
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Is their a correlation between income and happiness? |
not really. Kinda looks like an X^(1/2) graph |
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Is their a correlation between income per person and poverty rate? |
Yes. As income per person goes up, poverty down. many African countries have low income, high poverty. Many Europeans have high (relative) income and low poverty. |
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Name the 8 development goals. Will be M/c question so just get the gist of it. |
1. eradicate extreme poverty and 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 and other diseases. 7. Ensure environmental sustainability 8. Develop partnership for development |
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what are the two main methods to compare income across countries? explain them |
exchange rate method: allows conversion to a common currency. Purchasing Power Parity: # of units of local currency required to purchase a given bundle of goods and services which cost US$1 in the US. (remember BIg mac index) |
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what is the human development index? what was the old formula and whats the new? |
human development index combines three fundamentals to a statistic to show development. Old: (1/3)income + (1/3)health + (1/3)education New: income^(1/3) + health^(1/3) + education^(1/3) |
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what were the four main changes from the old HDI to the new one? |
1) functional for; new geometric form captures complementaries 2) GNI instead of GDP 3) Education index now uses: average attainment across population, expected attainment of todays children, geometric mean (again) 4) change to upper and lower goalposts. All relative to the best and worst country. |
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traditional HDI treats sub-indicies as BLANK new HDI treats sub indices as BLANK |
perfect substitutes complements |
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End of first lecture |
End of first lecture |
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Write out fully the Harrod-Domar model from slide 7 and 8 |
Write out fully the Harrod-Domar model from slide 7 and 8 |
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the main implication of the Harrod-Domar model, is that Growth is possible and depends on BLANK. It also depends on BLANK and BLANK |
saving rate. productivity, and depreciation. |
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why was the HD model so popular? |
Simplicity, and historical timing. |
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the explanation of why the Harrod-Domar model is poor is incentives. Why are incentives out of whack here? |
aid recipients get less if their domestic savings increased. (AKA they have the same allotment, regardless of the percentage of it is savings) Savings rates were also low because of weak incentives for investing the future. (weak property rights) |
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extensively go over the Solow model. slides 14-23 |
extensively go over the Solow model. slides 14-23 |
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to summarize Solow model. Technological progress is BLANK accumulation of physical capital is not, because of BLANK |
the source of long run growth diminishing marginal returns |
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the important implication of Solow is convergence. explain this in 2 sentences. |
if technology is available across economies, then all else equal if country A is poorer than B it is becuase A has less capital per worker. this also means the return to capital is higher in A, so they should grow faster than B in future. |
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Go over endogenous growth theory. Slides 29-32 understand graphs on slide 35 |
Go over endogenous growth theory. Slides 29-32 understand graphs on slide 35 |
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start of lecture 3 |
start of lecture 3 |
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a couple of definitions, what is co-ordination problems (with respect to development economics) what is poverty traps? |
Co-probs: no-one wants to change their behaviour unless sufficiently many others do too. poverty traps: can not shift from the unfavourable outcome because of insufficient income/wealth. |
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two things block superior technology from being able to replace existing technology. what are they? |
Increasing returns to scale. aka huge fixed cost, increase profit per unit produced. Network effects. |
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what are 4 bad norms of developing countries? define Graft (one of the 4) |
corruption dishonesty punctuality Graft. = not voted for stealing then steal. no incentive to deviate. politicians, part of corruption. |
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describe the basic idea behind the big push model. |
the government must push the economy to be bigger, and wealthy. This incentivizes many companies to invest there, and in turn raises the wages of the workers. Modernize everything at once. |
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why does a shift to modern production require a sufficiently high demand? |
increasing returns to the fixed costs. (understand what this means in context to big push) |
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why will demand be higher when income is higher? |
increase in disposable income |
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can a super entrepreneur solve the coordination problem? |
probably not. tough to borrow the money required. vote for one person not multiple. |
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stopped at lecture slide 30 |
stopped at lecture slide 30 |
