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ECONOMIC GROWTH & ECONOMIC DEVELOPMENT
Transcript of ECONOMIC GROWTH & ECONOMIC DEVELOPMENT
DOES ECONOMIC GROWTH LEAD TO ECONOMIC DEVELOPMENT?
Increases in output & incomes over time, measured on a per capita basis.
more developed / less developed
Process that leads to improved standards of living for a population as a whole.
increased output & income
reduction of unemployment & poverty
increase in availability of food, shelter, sanitation, education and health care services
Economic Growth does not necessarily follow Economic Development. (GNI per capita gap)
3 core values of development
3)Freedom from Ignorance & Squalor
opportunities to make choices
Income poverty vs. Human poverty
SOURCES OF ECONOMIC GROWTH
1. NATURAL FACTORS
Q/Q OF FOP
2. HUMAN CAPITAL FACTORS
Q/Q OF POPULATION
3. PHYSICAL CAPITAL & TECHNOLOGY
4. INSTITUTIONAL FACTORS
Q/Q OF GOVERNMENT SYSTEMS
POLITICAL, LEGAL, BANKING, EDUCATION, INFRASTRUCTURE & INTERNATIONAL RELATIONS
1. HIGHER INCOMES
INCREASED INCOMES = HIGHER INCOMES PER CAPITA ?=? INCREASED STANDARD OF LIVING (DISTRIBUTION OF INCOME?)
2. IMPROVED ECONOMIC INDICATORS OF WELFARE
HIGHER GDP = IMPROVED INDICATORS OF WELFARE (HDI RANKING -- LIFE EXPECTANCY, LITERACY RATES, ETC.)
3. HIGHER GOVERNMENT REVENUES
HIGHER GDP = HIGHER GOVERNMENT TAX REVENUE = INCREASED SPENDING ON MERIT GOODS/SERVICES
4. CREATION OF INEQUALITY
MKT-BASED INITIATIVE GROWTH = INCREASED GDP = INCREASED INEQUALITY (TRICKLE DOWN EFFECT MOSTLY INEFFECTIVE)
5. NEGATIVE EXTERNALITIES & LACK OF SUSTAINABILITY
NEGATIVE EXTERNALITIES OF PRODUCTION & CONSUMPTION
GLOBAL WARMING EFFECTS DECREASE ECONOMIC DEVELOPMENT( POTABLE WATER, DROUGHTS, FOOD PRODUCTION, COASTAL FLOODING, TROPICAL DISEASES)
DOES ECONOMIC GROWTH LEAD TO ECONOMIC DEVELOPMENT