ECS 3013

What does Amartya Sen mean by "Functionings" and explain Sen's "capabilities" approach. How does the capability approach help us gain insight into development goals and achievement? Is money enough? Why or why not?

Amartya Sen refers to "functionings" as a state of "being and doing" such as being happy or having food. "Capabilities" are concepts that relate to the freedom to choose different values that he or she deems important. The capability approach helps us gain insight because it relies on values of "being and doing" to receive happiness. This to us means that money is not enough unless is is valued towards helping other people's well-being.

Harrod-Domar growth model

An economic model which maintains that the growth rate of GDP depends upon the level of savings and the capital output ratio.

Poverty simply means that people don't have enough income.

FALSE

real GDP

GDP adjusted for inflation

Which measure uses a common set of international prices for all goods and services produced?

GNI

How is economic growth measured?

Gross Domestic Product (GDP)

GDP

Gross Domestic Product- the total market value of all final goods and services produced annually in an economy. Located DOMESTICALLY

Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries.

In poor countries purchasing power parity is different than in rich countries because less money could be used to buy more. Rich countries have already developed further and the purchasing power parity is higher.

middle income countries

LMC and UMC grouper together GNI between $1,025-$12,475

factors of production

Land, labor, capital, and entrepreneurship goods and services produced using these resources

World Bank rankings

Low income countries (LIC) Lower middle income (LMC) upper middle income (UMC) Higher Income (HIC)

three vignettes

Malaysia, ethiopia, ukraine

newly industrialized countries (NIC)

Refers to countries that are building up their industries and infrastructure. These countries are generally shifting from an agricultural to an industrial economy. EX: Hong Kong, Malaysia, Singapore, South Korea, Taiwan

In 2020, which country is the poorest and second poorest country in the world? What were their GDP per capita?

Republic of Congo, 457 US dollars Mozambique , 502 US dollars

The poorest nations in the world, representing 12 percent of humanity, are primarily located in:

Sub-Saharan Africa.

What are the dimensions and indicators that make up the Human Development Index?

The dimensions and indicators that make up the Human Development Index are life expectancy, education, and per capita income indicators

development economics

The study of how economies are transformed from stagnation to growth and from low-income to high-income status, and overcome problems of absolute poverty.

Viktor and Yulia's country comes from which of the following groups of countries

Transitional

Nike has a factory in China producing and selling shoes. The value of transactions will be counted into

U.S GNP by not U.S. GDP

Production Possibilities Frontier (PPF)

a curve showing the maximum attainable combinations of two products that may be produced when both depend on the same finite resource

In 2017, Argentina's GNI per capita was $14,402. This classifies Argentina as

a high-income country.

economic development

adopting new ideas and technology to advance in improvement and quality of life. Transitions in an economy

A country's nominal GNP for a given year is defined as the total market value of:

all final goods and services produced.

Development economics is the study of the

allocation of resources in developing countries. transformation of institutions. alleviation of absolute poverty

transitional economy

an economic system in the process of shifting from central planning to competitive markets

economic growth

an increase in the amount of goods and services produced per head of the population over a period of time. improves national income and output

Organization for Economic Cooperation and Development (OECD)

classifies countries by their economic statues EX: Portugal and Greece

savings

comes from current income

malaysia

considered an NIC, income has gone up because of technological advancements (Rachima)

developing countries

countries with less productive economies and a lower quality of life they have access to little information. EX: Asia, Africa, Eastern Europe, Soviet Union, Middle East, Latin America

Purchasing Power Parity (PPP)

difference between cost of a given good / service in different countries. Takes into account relative cost of living and inflation

Developed Country (MDC)

economically advanced capitalist countries EX: Western Europe, North America, Australia, New Zealand, Japan

Traditional Economy

emphasizes utility, profit maximization, market efficiency, and determination of equilibrium

Investments

financed by saving

final goods

goods which are used either for consumption or for investment. It is a commodity used by the consumer. EX: microwave

The primary economic activities for three-quarters of Ethiopians are

growing crops and tending livestock

rule of 70

how long it takes for an investment(income) to double

Factor Accumulation

increase in quantity of "FOP" to produce goods and services

new investment

increases capital stock

Ukraine

independent in 1991 from the soviet union. Since then the government has become corrupt and communist socialism ex: Viktor & Yulia

how does capital stock change?

it is equal to new investments - depreciation

low income countries GNI

less than $1,025

Human Development Index (HDI)

measure socio economic development based on education, health, and real income per capita

nominal GDP

measures GDP using current prices. does not adjust for inflation

GNP or GDP divided by total population provides a measure of

per capita income

growth rate

percentage change in value of goods/services. how fast the economy is growing. measure the comparative health of an economy over time.

Ethiopia

poorest in the nation. droughts and food shortages, exports coffee. Ex: Getachew

World Bank

provides development funds to developing countries EX: Loans, grants, technology

Labor-augmenting technological progress

quality of skills or labor force is upgraded

production function

quantity of a good produced and the quantity of inputs required to produce it

intermediate goods

refer to those goods which are used either for resale or for further production in the same year. EX Nature: They are included in both national and domestic income.

While working in the Japanese electronics factory in Penang, Rachmina Abdullah from Malaysia?

saved money to provide herself with a better future.

Capital-augmenting technological progress

technological progress that raises the productivity of capital by innovation and inventions (existing capital goods)

Countries tend to be classified as more or less developed based on

the level of income per capita.

Market Exchange Rate

the value of a countries currency based off of demand and supply

GNP (Gross National Product)

total income earned by factors of production no matter where is is located

GNI (Gross National Income)

value of goods and services produced domestically or abroad using resources supplied by the countries citizens. EXCLUDES things produced by foreign owned businesses

per capita

"by head" per person

Millennium Development Goals (MDG)

1. Eradicate extreme poverty and hunger 2. Universal 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 a global partnership for development

Sustainable Development Goals (SDGs)

1. leave no one behind (focus on reaching excluded groups) 2. sustainable development 3. transform economies for jobs 4. build peace and effective insititutions 5. new global partnerships that improve poverty, civil society, multi lateral institutions, businesses, acadamia, philanthropy

different patters of development

1. political systems 2. demographic shifts 3. endemic disease 4. international trade 5. international capital movement 6. info and ideas

Which year did the Millennium Development Goals expire?

2015

Capital-output ratio

A ratio that shows the units of capital required to produce a unit of output over a given period of time. higher savings = higher investment

Stages-of-growth model of development

A theory of economic development, associated with the American economic historian Walt W. Rostow, according to which a country passes through sequential stages in achieving development.