development

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Policies for Economic Development

Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards. Policies for economic development could involve:Improved macroeconomic conditions (create stable economic climate of low inflation and positive economic growth) Free market supply-side policies – privatisation, deregulation, lower taxes, less regulation to stimulate private sector investment. Government interventionist supply-side policies – increased spending on ‘public goods’ such as education, public transport and healthcare.For developing economies, other issues…

Factors that affect population size and growth

Factors that affect population size and growth

Readers question: Explain the main factors which affect population size and growth? Population growth is determined by fertility rates – the number of children per adult and also fatality rates. Birth rates and mortality rates are, in turn, determined by a combination of factors. Often economic growth and economic development have led to a decline in population growth, but there are no hard and fast rules and other factors, such as availability of family planning, social expectations and government intervention can play an important role.

mncs-pros-and-cons

Multinational Corporations in Developing Countries

Readers Question: I have to debate why multinational corporations are good for developing countries, and I know the arguments for them being bad are strong so are there any really good positive arguments I could use to smash the opposition?  Multinational companies like Nike, Sony, Apple, Toyota, Coca-Cola all have investments and operations in developing economies. This can lead to both benefits and disadvantages for developing economies. Advantages of Multinational Corporations in developing countries.Multinationals provide an inflow of capital into the developing country. E.g. the investment to build the factory…

dual-economy

Dual economy

Readers question: What is a ‘dual economy’? A dual economy refers to the existence of two distinct types of economic segments within an economy. This involves:A capitalist based manufacturing sector (geared towards global markets) Labour intensive agricultural sector (low productivity, geared towards subsistence farming or local markets)The British economist W. Arthur Lewis wrote an influential paper on the ‘dual economy’ in 1954. He observed that in many developing economies (usually a former colonial country) that the economy was split into…

Countries_by_GDP_(PPP)_Per_Capita_in_2015

Difficulties in measuring living standards

The most common method for measuring living standards is using GDP per capita. This is national income divided by population and gives a rough guide to average incomes. High real GDP per capita indicates citizens are able to purchase more goods and services. World Map of GDP per CapitaGDP per Capita. Source: Source: IMF This shows variation in GDP per capita of $100,000 to $118 in the poorest countries. However, there are several difficulties in using GDP to measure…

Measuring Living Standards

Measuring Living Standards

Measuring living standards is important for economic policy. However, in practice, there are several difficulties in measuring living standards and therefore there are several different measures we could use. The most common measure of living standards is to start with real GDP per Capita. World Map of GDP per Capita GDP per Capita. Source: Source: IMF   GDP per capita – GDP measures National Output / National Income. Per capita is the average income per person in the…

Difference between economic growth and development

Difference between economic growth and development

Readers Question: What is the difference between growth and development? Explain the factors affecting macroeconomic growth in an underdeveloped country? Can a country experience economic growth without development?In summaryEconomic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, we would expect economic growth to enable more economic development. Higher real GDP enables more to be spent on health care and education. However,…

Indian economy in 2014

Indian economy in 2014

I have quite a few readers in India, so I’d like to have a brief look at the Indian economy and it’s prospects for the coming year. After spending so much time looking at the (rather depressing) economics of austerity in Europe and UK, it makes a welcome change to look at a developing economy with a different set of challenges and problems. GDP per capita (in 1990 Geary-Khamis dollars) (data range 1950-2003) Indian economy in summary For those not familiar…