This document outlines several theories of economic development. It discusses classical theories from the 19th century, as well as Marxism, Rostow's stages of growth model, vicious circle theory, balanced vs. unbalanced growth, Lewis-Fei-Ranis model, dependency theory, and neoclassical theories. It provides an overview of each theory and some critiques. The document aims to systematically explain relationships between economic variables in order to understand development and inform policymaking.
1. The document discusses the theories of balanced and unbalanced economic growth. It describes Rosenstein-Rodan's "big push" theory of balanced growth, which argues for coordinated investment across multiple industries to generate demand.
2. Nurkse's version of balanced growth stresses balancing investment between sectors to avoid bottlenecks. Hirschman's theory of unbalanced growth proposes strategically investing in certain industries to stimulate growth in other sectors through linkages.
3. Hirschman categorized investment as either social overhead capital or direct productive activities and argued that underdeveloped countries should initially focus on one type, which would then stimulate the other.
The Big Push Theory proposes that developing countries require a minimum threshold of investment across multiple industries to overcome issues of indivisibilities and break out of poverty. It identifies three types of indivisibilities: in production due to infrastructure needs, in demand due to small markets, and in savings due to high investment requirements. The theory argues for coordinated investment in social overhead capital and multiple industries to realize increasing returns to scale. However, it has been criticized for not providing clear guidance and overlooking constraints faced by developing countries.
The document discusses development gaps between rich and poor countries. It provides definitions and classifications of development gaps. There are three stages of economic development: preparatory, take-off, and self-sustained growth. There are large income gaps between nations and people, classified as North-South divide and by continent or World Bank definitions. Measures of development gaps include absolute income gap, relative income gap, standard deviation, coefficient of variation, and Gini ratio. These measure differences in per capita income levels and dispersion to quantify narrowing or widening of gaps over time.
Econometrics notes (Introduction, Simple Linear regression, Multiple linear r...Muhammad Ali
Econometrics notes for BS economics students
Muhammad Ali
Assistant Professor of Statistics
Higher Education Department, KPK, Pakistan.
Email:Mohammadale1979@gmail.com
Cell#+923459990370
Skyp: mohammadali_1979
Adam Smith is considered the Father of Economics. In his seminal book, The Wealth of Nations, he argued that a country's wealth comes from the total value of goods and services produced, not just gold or agriculture. Smith identified two key drivers of economic growth: the division of labor and capital accumulation. The division of labor leads to specialization and higher productivity, while capital accumulation raises productivity by increasing capital per worker. This starts a virtuous cycle of growth, but eventually diminishing returns set in and growth slows, reaching a stationary state.
Joan Robinson developed growth models that rejected many neoclassical assumptions. Her models considered capital as durable and heterogeneous, not easily substitutable for labor. She argued the value of capital depends on distribution and cannot be estimated without knowing interest rates. Robinson built multiple models to analyze growth under different economic conditions. Her key model showed the relationship between the actual and desired rates of accumulation and profit. Steady growth required these rates to be equal, but various factors could cause them to diverge, making sustained steady growth difficult to achieve.
The classical theory of Economic DevelopmentSharin1234
The Classical theory of economic development is the sum total of all theories of classical economists. The views of Adam Smith, Malthus, and Mill on Economic development form the crux of the classical theory of development. Though they differ on a number of development issues, the essence of the classical approach to development is the same.
This document discusses endogenous and exogenous growth theories. Endogenous growth theory views technological progress as endogenous to the economic system and driven by factors like investment in human capital and ideas. Exogenous growth theory sees technology as an external factor determined outside the economic system. The Harrod and Domar models emphasize the role of capital accumulation in driving growth, and define actual, warranted, and natural growth rates. Steady growth requires the actual and warranted rates to be equal, and the natural rate puts an upper limit on growth. Disequilibriums can cause inflation or overproduction.
1. The document discusses the theories of balanced and unbalanced economic growth. It describes Rosenstein-Rodan's "big push" theory of balanced growth, which argues for coordinated investment across multiple industries to generate demand.
2. Nurkse's version of balanced growth stresses balancing investment between sectors to avoid bottlenecks. Hirschman's theory of unbalanced growth proposes strategically investing in certain industries to stimulate growth in other sectors through linkages.
3. Hirschman categorized investment as either social overhead capital or direct productive activities and argued that underdeveloped countries should initially focus on one type, which would then stimulate the other.
The Big Push Theory proposes that developing countries require a minimum threshold of investment across multiple industries to overcome issues of indivisibilities and break out of poverty. It identifies three types of indivisibilities: in production due to infrastructure needs, in demand due to small markets, and in savings due to high investment requirements. The theory argues for coordinated investment in social overhead capital and multiple industries to realize increasing returns to scale. However, it has been criticized for not providing clear guidance and overlooking constraints faced by developing countries.
The document discusses development gaps between rich and poor countries. It provides definitions and classifications of development gaps. There are three stages of economic development: preparatory, take-off, and self-sustained growth. There are large income gaps between nations and people, classified as North-South divide and by continent or World Bank definitions. Measures of development gaps include absolute income gap, relative income gap, standard deviation, coefficient of variation, and Gini ratio. These measure differences in per capita income levels and dispersion to quantify narrowing or widening of gaps over time.
Econometrics notes (Introduction, Simple Linear regression, Multiple linear r...Muhammad Ali
Econometrics notes for BS economics students
Muhammad Ali
Assistant Professor of Statistics
Higher Education Department, KPK, Pakistan.
Email:Mohammadale1979@gmail.com
Cell#+923459990370
Skyp: mohammadali_1979
Adam Smith is considered the Father of Economics. In his seminal book, The Wealth of Nations, he argued that a country's wealth comes from the total value of goods and services produced, not just gold or agriculture. Smith identified two key drivers of economic growth: the division of labor and capital accumulation. The division of labor leads to specialization and higher productivity, while capital accumulation raises productivity by increasing capital per worker. This starts a virtuous cycle of growth, but eventually diminishing returns set in and growth slows, reaching a stationary state.
Joan Robinson developed growth models that rejected many neoclassical assumptions. Her models considered capital as durable and heterogeneous, not easily substitutable for labor. She argued the value of capital depends on distribution and cannot be estimated without knowing interest rates. Robinson built multiple models to analyze growth under different economic conditions. Her key model showed the relationship between the actual and desired rates of accumulation and profit. Steady growth required these rates to be equal, but various factors could cause them to diverge, making sustained steady growth difficult to achieve.
The classical theory of Economic DevelopmentSharin1234
The Classical theory of economic development is the sum total of all theories of classical economists. The views of Adam Smith, Malthus, and Mill on Economic development form the crux of the classical theory of development. Though they differ on a number of development issues, the essence of the classical approach to development is the same.
This document discusses endogenous and exogenous growth theories. Endogenous growth theory views technological progress as endogenous to the economic system and driven by factors like investment in human capital and ideas. Exogenous growth theory sees technology as an external factor determined outside the economic system. The Harrod and Domar models emphasize the role of capital accumulation in driving growth, and define actual, warranted, and natural growth rates. Steady growth requires the actual and warranted rates to be equal, and the natural rate puts an upper limit on growth. Disequilibriums can cause inflation or overproduction.
Hypothesis of secular deterioration of terms of tradeRitika Katoch
The document summarizes the Prebisch-Singer thesis, which argues that terms of trade tend to deteriorate against primary commodities and in favor of manufactured goods over time. It presents the key assumptions of the thesis, including that income elasticity of demand is greater for manufactured goods than primary products. As a result, as incomes rise in developed countries, demand shifts away from primary commodities exported by developing countries towards manufactured goods produced in developed nations. This leads to a long-term decline in terms of trade for developing country exports.
The document discusses the theory of unbalanced growth as proposed by economists like Hirschman and Rostow. The key points are:
1. The theory argues for prioritizing investment in strategic sectors rather than all sectors simultaneously due to scarce resources in developing countries.
2. Investment in priority sectors will stimulate growth in other sectors through "linkage effects" as costs decrease and demand increases.
3. Hirschman classified investments as either social overhead capital (infrastructure) or direct productive activities (agriculture, industry) and argued the two cannot be expanded simultaneously so one sector should be prioritized initially.
The theory of Technical dualism is one of the theories of dualism. Professor Higgins has developed the theory of Technological Dualism. By this, he means: "The use of different production functions in the advance sector and in the traditional sectors of UDCs".
The Harrod-Domer model theorizes that a country's economic growth rate is defined by its savings level and capital-output ratio. It suggests there is no natural balanced growth. The model was developed independently by Roy Harrod and Evsey Domar to explain growth in terms of savings and capital productivity. It requires continuous net investment to sustain real income and production growth. The model's assumptions include no government intervention, full initial employment, a closed economy, fixed capital-labor ratios and constant savings and interest rates. Its main criticism is the unrealistic assumption of no reason for sufficient growth to maintain full employment.
The document discusses several economic growth models:
1) The Harrod-Domar model which expanded Keynesian analysis to the long-run and analyzed investment's role in creating output capacity.
2) The Roy Harrod and Evsey Domar models which also expanded Keynesian analysis and emphasized investment's dual role of generating income and increasing productive capacity.
3) The Solow growth model which views capital accumulation and labor as the drivers of economic growth assuming full employment and perfect competition. Technological progress is treated as exogenous.
4) The Meade model which incorporates natural resources and technological progress as additional factors influencing economic growth.
The document discusses the three major functions of government in economics according to Professor Musgrave:
1) Allocation function - The government provides goods and services called "social goods" that satisfy collective wants when the market cannot.
2) Distribution function - The government adjusts the distribution of wealth and income to ensure a "fair" state through taxes and transfer payments policies.
3) Stabilization function - The government uses fiscal and monetary policies to maintain high employment, price stability, and economic growth while considering trade and balance of payments effects. This is also called compensatory finance.
Domar's growth model from 1946 analyzes how a capitalist economy can grow at a constant rate after reaching full employment. It assumes aggregate supply equals aggregate demand during steady growth. The model shows that for steady growth, the rates of investment, capital stock growth, output growth, and employment growth must all be equal. It derives the equation that the growth rate equals the savings ratio multiplied by the incremental output-capital ratio. Investment has dual effects of increasing both aggregate demand and productive capacity in the long-run.
The Harrod-Domar model of economic growth extends Keynesian analysis to the long run by considering the dual effects of investment on aggregate demand and productive capacity. It seeks to determine the unique growth rate of investment and income needed to maintain full employment. The Domar version presents a fundamental growth equation showing that the increase in national income depends on the increase in capital stock multiplied by the marginal output-capital ratio. Harrod's model treats growth more dynamically, with the warranted growth rate determined by the population growth rate, output per capita based on investment level, and capital accumulation. Equilibrium is achieved when the actual incremental capital-output ratio equals the required ratio warranted by technology.
Don Patinkin criticized the neoclassical assumptions of homogeneity and dichotomization. He proposed the real balance effect to reconcile goods and money markets. The real balance effect posits that changes in the price level affect real purchasing power, which impacts demand for goods. When prices rise, real balances and goods demand fall, pushing prices back down. This feedback loop between prices, real balances, and goods demand is represented using the IS-LM model, where a fall in prices shifts the LM curve right, raising output and employment until full employment is reached. Patinkin argues this real balance effect denies the homogeneity assumption and integrates goods and money markets.
The document summarizes Samuelson's model of business cycles, which relates economic fluctuations to the interaction between the multiplier and accelerator effects. It explains that the multiplier amplifies changes in autonomous investment and consumption, while the accelerator reinforces increases in income through further induced investment. The model is represented mathematically to show how different combinations of the multiplier and accelerator can produce equilibrium, damped cycles, explosive cycles, or cycles of constant amplitude to describe business cycle patterns.
The big push theory argues that economic development requires a minimum level of comprehensive investment in mutually supporting industries to take advantage of economies of scale and externalities. It identifies three types of indivisibilities - in production, demand, and savings - that must be overcome through a large investment package rather than gradual increases. Social overhead capital, like infrastructure, requires huge initial investments but leads to lower costs and indirect contributions to development over the long term. Underdeveloped countries face challenges achieving the necessary savings levels for a big push and must rely on outside sources.
Lewis proposed that less developed countries could stimulate growth by exploiting their unlimited supplies of labor. His model assumes these countries have high populations engaged in subsistence work, making labor perfectly elastic at that wage. The economies are dual, with a subsistence sector employing most workers at low productivity and a capitalist sector using capital. Growth occurs as labor moves from subsistence to capitalist sectors, increasing output and allowing reinvestment which further raises productivity and employment in a self-sustaining cycle until labor pressures subside. Bank credit can also aid capital formation though inflation is self-correcting. Critics argue the model overlooks demand factors and difficulties transitioning large agricultural populations.
Boserup theory of agricultural developmentVaibhav verma
- Esther Boserup developed the Boserup Theory of Agricultural Development which refutes Malthus' theory of population growth.
- She argued that population growth leads to technical and other changes in agriculture that result in increased food production rather than famine.
- Boserup identified 5 stages of agricultural development that societies progress through due to increasing population density: forest fallow, bush fallow, short fallow, annual cropping, and multiple cropping. Each stage requires more intensive use of land and labor.
- Her theory claims population growth is the driving force behind innovation and improvements in farming techniques throughout history in order to feed more people.
Hirschman's theory of unbalanced growth proposes strategically selecting and heavily investing in priority sectors to spur development, as underdeveloped countries cannot invest in all sectors simultaneously. The theory argues that intentionally creating imbalances in the economy by focusing investment in some sectors over others is an effective development strategy. Specifically, it recommends initially investing in social overhead capital like education and infrastructure to initiate development, which will then induce greater investment in directly productive activities like manufacturing.
This document provides an overview of John Maynard Keynes and the development of his economic theories. It discusses Keynes' background and education, as well as his major works that broke from classical economics. Specifically, it outlines Keynes' critique of the classical labor market theory, interest rate theory, and demand for money theory. It then explains Keynes' alternative theories regarding these topics. The document also summarizes Keynes' concept of aggregate demand and supply, the multiplier effect, and his views on fiscal and monetary policy to stabilize economies and reduce unemployment.
The classical theory of international trade was formulated by Robert Torrens, David Ricardo, and John Stuart Mill. Their theory relates to comparative advantage. Ricardo's theory states that countries will export commodities where they have a comparative advantage and import commodities where they have a comparative disadvantage. Ricardo used a numerical example to illustrate how trade benefits both Portugal and England even when Portugal has an absolute advantage in both goods - by specializing in their comparative advantages, both countries can consume beyond their production possibilities.
The Philip curve shows an inverse relationship between the rate of unemployment and the rate of change in money wages in the short run. Friedman argued that in the long run, there is no tradeoff between inflation and unemployment - the Philip curve becomes vertical at the natural rate of unemployment, which is the rate where expected and actual inflation are equal. Temporary reductions in unemployment below the natural rate are only possible if inflation rises above expectations, but eventually expectations will adjust and unemployment will return to the natural rate, even as inflation accelerates.
The document discusses four classic theories of economic development:
1) The linear-stages-of-growth model viewed development as a series of successive stages all countries must pass through, with the key being increasing investment and growth.
2) Structural-change theories focused on the internal process of changing economic structures as countries industrialize.
3) Dependence theories emphasized external and internal constraints like exploitation and unequal power relationships that hindered development.
4) Neoclassical theories emphasized the role of free markets and privatization in development and saw lack of development primarily as a result of too much government intervention.
This document summarizes four classic theories of economic growth and development:
1) Linear stages theory proposes that countries progress through defined stages from traditional to industrialized societies.
2) Structural change models emphasize the transformation of economic structures, such as the shift from agriculture to industry.
3) International dependence theories argue that underdevelopment results from unequal power relationships that benefit wealthy countries and developing country elites.
4) Neoclassical counterrevolution favors free markets and privatization over government intervention and statist policies. While perspectives differ, each approach provides insights into factors that influence economic development.
Hypothesis of secular deterioration of terms of tradeRitika Katoch
The document summarizes the Prebisch-Singer thesis, which argues that terms of trade tend to deteriorate against primary commodities and in favor of manufactured goods over time. It presents the key assumptions of the thesis, including that income elasticity of demand is greater for manufactured goods than primary products. As a result, as incomes rise in developed countries, demand shifts away from primary commodities exported by developing countries towards manufactured goods produced in developed nations. This leads to a long-term decline in terms of trade for developing country exports.
The document discusses the theory of unbalanced growth as proposed by economists like Hirschman and Rostow. The key points are:
1. The theory argues for prioritizing investment in strategic sectors rather than all sectors simultaneously due to scarce resources in developing countries.
2. Investment in priority sectors will stimulate growth in other sectors through "linkage effects" as costs decrease and demand increases.
3. Hirschman classified investments as either social overhead capital (infrastructure) or direct productive activities (agriculture, industry) and argued the two cannot be expanded simultaneously so one sector should be prioritized initially.
The theory of Technical dualism is one of the theories of dualism. Professor Higgins has developed the theory of Technological Dualism. By this, he means: "The use of different production functions in the advance sector and in the traditional sectors of UDCs".
The Harrod-Domer model theorizes that a country's economic growth rate is defined by its savings level and capital-output ratio. It suggests there is no natural balanced growth. The model was developed independently by Roy Harrod and Evsey Domar to explain growth in terms of savings and capital productivity. It requires continuous net investment to sustain real income and production growth. The model's assumptions include no government intervention, full initial employment, a closed economy, fixed capital-labor ratios and constant savings and interest rates. Its main criticism is the unrealistic assumption of no reason for sufficient growth to maintain full employment.
The document discusses several economic growth models:
1) The Harrod-Domar model which expanded Keynesian analysis to the long-run and analyzed investment's role in creating output capacity.
2) The Roy Harrod and Evsey Domar models which also expanded Keynesian analysis and emphasized investment's dual role of generating income and increasing productive capacity.
3) The Solow growth model which views capital accumulation and labor as the drivers of economic growth assuming full employment and perfect competition. Technological progress is treated as exogenous.
4) The Meade model which incorporates natural resources and technological progress as additional factors influencing economic growth.
The document discusses the three major functions of government in economics according to Professor Musgrave:
1) Allocation function - The government provides goods and services called "social goods" that satisfy collective wants when the market cannot.
2) Distribution function - The government adjusts the distribution of wealth and income to ensure a "fair" state through taxes and transfer payments policies.
3) Stabilization function - The government uses fiscal and monetary policies to maintain high employment, price stability, and economic growth while considering trade and balance of payments effects. This is also called compensatory finance.
Domar's growth model from 1946 analyzes how a capitalist economy can grow at a constant rate after reaching full employment. It assumes aggregate supply equals aggregate demand during steady growth. The model shows that for steady growth, the rates of investment, capital stock growth, output growth, and employment growth must all be equal. It derives the equation that the growth rate equals the savings ratio multiplied by the incremental output-capital ratio. Investment has dual effects of increasing both aggregate demand and productive capacity in the long-run.
The Harrod-Domar model of economic growth extends Keynesian analysis to the long run by considering the dual effects of investment on aggregate demand and productive capacity. It seeks to determine the unique growth rate of investment and income needed to maintain full employment. The Domar version presents a fundamental growth equation showing that the increase in national income depends on the increase in capital stock multiplied by the marginal output-capital ratio. Harrod's model treats growth more dynamically, with the warranted growth rate determined by the population growth rate, output per capita based on investment level, and capital accumulation. Equilibrium is achieved when the actual incremental capital-output ratio equals the required ratio warranted by technology.
Don Patinkin criticized the neoclassical assumptions of homogeneity and dichotomization. He proposed the real balance effect to reconcile goods and money markets. The real balance effect posits that changes in the price level affect real purchasing power, which impacts demand for goods. When prices rise, real balances and goods demand fall, pushing prices back down. This feedback loop between prices, real balances, and goods demand is represented using the IS-LM model, where a fall in prices shifts the LM curve right, raising output and employment until full employment is reached. Patinkin argues this real balance effect denies the homogeneity assumption and integrates goods and money markets.
The document summarizes Samuelson's model of business cycles, which relates economic fluctuations to the interaction between the multiplier and accelerator effects. It explains that the multiplier amplifies changes in autonomous investment and consumption, while the accelerator reinforces increases in income through further induced investment. The model is represented mathematically to show how different combinations of the multiplier and accelerator can produce equilibrium, damped cycles, explosive cycles, or cycles of constant amplitude to describe business cycle patterns.
The big push theory argues that economic development requires a minimum level of comprehensive investment in mutually supporting industries to take advantage of economies of scale and externalities. It identifies three types of indivisibilities - in production, demand, and savings - that must be overcome through a large investment package rather than gradual increases. Social overhead capital, like infrastructure, requires huge initial investments but leads to lower costs and indirect contributions to development over the long term. Underdeveloped countries face challenges achieving the necessary savings levels for a big push and must rely on outside sources.
Lewis proposed that less developed countries could stimulate growth by exploiting their unlimited supplies of labor. His model assumes these countries have high populations engaged in subsistence work, making labor perfectly elastic at that wage. The economies are dual, with a subsistence sector employing most workers at low productivity and a capitalist sector using capital. Growth occurs as labor moves from subsistence to capitalist sectors, increasing output and allowing reinvestment which further raises productivity and employment in a self-sustaining cycle until labor pressures subside. Bank credit can also aid capital formation though inflation is self-correcting. Critics argue the model overlooks demand factors and difficulties transitioning large agricultural populations.
Boserup theory of agricultural developmentVaibhav verma
- Esther Boserup developed the Boserup Theory of Agricultural Development which refutes Malthus' theory of population growth.
- She argued that population growth leads to technical and other changes in agriculture that result in increased food production rather than famine.
- Boserup identified 5 stages of agricultural development that societies progress through due to increasing population density: forest fallow, bush fallow, short fallow, annual cropping, and multiple cropping. Each stage requires more intensive use of land and labor.
- Her theory claims population growth is the driving force behind innovation and improvements in farming techniques throughout history in order to feed more people.
Hirschman's theory of unbalanced growth proposes strategically selecting and heavily investing in priority sectors to spur development, as underdeveloped countries cannot invest in all sectors simultaneously. The theory argues that intentionally creating imbalances in the economy by focusing investment in some sectors over others is an effective development strategy. Specifically, it recommends initially investing in social overhead capital like education and infrastructure to initiate development, which will then induce greater investment in directly productive activities like manufacturing.
This document provides an overview of John Maynard Keynes and the development of his economic theories. It discusses Keynes' background and education, as well as his major works that broke from classical economics. Specifically, it outlines Keynes' critique of the classical labor market theory, interest rate theory, and demand for money theory. It then explains Keynes' alternative theories regarding these topics. The document also summarizes Keynes' concept of aggregate demand and supply, the multiplier effect, and his views on fiscal and monetary policy to stabilize economies and reduce unemployment.
The classical theory of international trade was formulated by Robert Torrens, David Ricardo, and John Stuart Mill. Their theory relates to comparative advantage. Ricardo's theory states that countries will export commodities where they have a comparative advantage and import commodities where they have a comparative disadvantage. Ricardo used a numerical example to illustrate how trade benefits both Portugal and England even when Portugal has an absolute advantage in both goods - by specializing in their comparative advantages, both countries can consume beyond their production possibilities.
The Philip curve shows an inverse relationship between the rate of unemployment and the rate of change in money wages in the short run. Friedman argued that in the long run, there is no tradeoff between inflation and unemployment - the Philip curve becomes vertical at the natural rate of unemployment, which is the rate where expected and actual inflation are equal. Temporary reductions in unemployment below the natural rate are only possible if inflation rises above expectations, but eventually expectations will adjust and unemployment will return to the natural rate, even as inflation accelerates.
The document discusses four classic theories of economic development:
1) The linear-stages-of-growth model viewed development as a series of successive stages all countries must pass through, with the key being increasing investment and growth.
2) Structural-change theories focused on the internal process of changing economic structures as countries industrialize.
3) Dependence theories emphasized external and internal constraints like exploitation and unequal power relationships that hindered development.
4) Neoclassical theories emphasized the role of free markets and privatization in development and saw lack of development primarily as a result of too much government intervention.
This document summarizes four classic theories of economic growth and development:
1) Linear stages theory proposes that countries progress through defined stages from traditional to industrialized societies.
2) Structural change models emphasize the transformation of economic structures, such as the shift from agriculture to industry.
3) International dependence theories argue that underdevelopment results from unequal power relationships that benefit wealthy countries and developing country elites.
4) Neoclassical counterrevolution favors free markets and privatization over government intervention and statist policies. While perspectives differ, each approach provides insights into factors that influence economic development.
The document discusses four classic theories of economic development:
1) The linear-stages-of-growth model proposed by Walt Rostow which viewed development as a series of successive stages all countries must pass through.
2) Theories of structural change which focused on the internal process of structural transformation required for sustained economic growth.
3) Dependence theories which viewed underdevelopment as resulting from exploitative internal and external power structures and institutions.
4) Neoclassical theories which emphasized the role of free markets and viewed underdevelopment as stemming from excessive government intervention. Current approaches draw from all four perspectives.
The document summarizes several classical theories of economic development:
1) Adam Smith, David Ricardo, and J.S. Mill believed that economic growth would slow or stop due to increasing population and limited resources.
2) Thomas Malthus argued that population growth alone does not lead to development and that capital accumulation is necessary for continued growth.
3) Walt Rostow proposed a model of economic growth occurring in five stages: traditional society, preconditions for take-off, take-off, drive to maturity, and high mass consumption.
4) John Stuart Mill viewed economic development as dependent on land, labor, and capital, and distinguished between productive and unproductive consumption.
Milton Friedman was a prominent 20th century American economist known for his research on monetary policy and criticism of Keynesian economic theory. Some of his most influential ideas included:
1) His interpretation of the "quantity theory of money" which held that increases in the money supply beyond real economic growth would lead solely to price inflation, not increased output.
2) His advocacy for monetarism and the idea that central banks should target low and stable inflation through steady monetary growth.
3) His empirical research challenging ideas like the Phillips Curve and arguments that unemployment and inflation were inversely related.
Classical theories of Economic Development.pptxKirti441999
The document discusses several classical and contemporary theories of economic development:
1. Early theories included Smith's laissez-faire views and Marx's critique of capitalism. Rostow's model proposed 5 linear stages of growth.
2. Structural change models emphasized shifting labor from agriculture to industry. The Harrod-Domar and Lewis models focused on investment and capital.
3. Dependence theories argued poor countries were exploited by wealthy nations.
4. Neoclassical theories promoted free markets over government intervention. The Solow model included technology and human capital.
5. New growth theories treat technology as endogenous and knowledge-driven. Coordination failure theories address market inefficiencies.
W2L3_Lecture 6-Strategies of economic development and growth-I (1).pdfAMBIKABHANDARI5
This document discusses various economic growth models. It begins by recapping key concepts from the previous lecture, such as historical growth rates and Kuznets' characteristics of modern economic growth. It then outlines several classical and neoclassical growth models, including the Harrod-Domar model and Solow growth model. Several trends in development thinking are also summarized, such as development as economic growth, modernization, and structural change. The document concludes by discussing balanced growth theory and key aspects of the Harrod-Domar and Solow growth models.
The document discusses economic growth and development models. It provides an overview of Rostow's stages of growth model which outlines five stages that countries progress through: traditional society, preconditions for take-off, take-off, drive to maturity, and high mass consumption. Key factors that influence economic development are also examined, including natural resources, human resources, capital formation, technology, and socio-cultural factors. The application of Keynesian economic theory to developing countries is also considered.
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Modernization Theory dependency Theory Early DevelopmentJoyNapier3
The document discusses several theories of international development from the mid-20th century, including modernization theory, dependency theory, and early development economics. It analyzes how these theories viewed processes like modernization, industrialization, and structural economic change. It also evaluates the legacy and critiques of these paradigms and how understandings of development have shifted over time.
W3L3_Lecture 9- Strategies of economic development and growth-IV.pptxAMBIKABHANDARI5
This document provides an overview of several economic growth models and theories that will be covered in the lecture, including: the balanced growth doctrine; unbalanced growth concept; Schumpeter's analysis of growth; Rostow's stages of growth; big push theory; critical minimum efforts thesis; Harrod-Domar growth model; and Solow growth model. It also recaps key aspects of Schumpeter's theory of economic development and Rostow's stages of growth theory covered in the previous lecture. Finally, it outlines Rosenstein-Rodan's big push theory, Leibenstein's critical minimum efforts thesis, and Nelson's concept of a low-level equilibrium trap.
This document discusses sustainable economic systems and provides context around stability and sustainability. It covers several key topics:
1. It discusses the need for more stability in economic systems to avoid large swings and volatility, as well as the importance of sustainability and responsible use of resources.
2. It analyzes different approaches to economic growth, including "roll-over growth" which can create instability, approaches that focus on continuing growth through technology, and those that advocate for amended growth metrics beyond just GDP.
3. It also discusses the failure of convergence between economic models and the need for pluralism, examining different varieties of capitalism systems and arguments against a one-size-fits-all model.
This document summarizes the evolution of economic development theories from the 1950s to the 1990s. It describes four main strands: 1) linear stages of growth models in the 1950s-60s, 2) structural change theories in the 1970s, 3) dependency theories in the 1970s, and 4) neoclassical, free-market theories in the 1980s-90s. It outlines the economic and political context behind each period and the major ideas that emerged, such as structuralism, import substitution, neoclassical policies, and new structuralism.
The document compares economic development ideas from the 1960s and 1980s. In the 1960s, government played a central role in development through policies like import substitution. By the 1980s, government was seen as an obstacle, and private investment, trade liberalization, and foreign direct investment were emphasized instead of government borrowing. Development assistance also shifted from project loans to policy-based lending to encourage market-friendly reforms.
This document provides an overview of several influential theorists in development economics and sociological/political development theories. It summarizes the key contributions and perspectives of thinkers such as Adam Smith, David Ricardo, Thomas Malthus, Karl Marx, Joseph Schumpeter, and others. It also examines the origins and perspectives of sociological theorists including Auguste Comte, Emile Durkheim, Max Weber, and Talcott Parsons. The document analyzes how their work has shaped the study of development economics and sociology.
Macroeconomics is the branch of economics that deals with the structure, performance, behavior, and decision-making of the whole, or aggregate, economy. The two main areas of macroeconomic research are long-term economic growth and shorter-term business cycles.
Similar to Ch_ 5_ Theories of Economic Development.ppt (20)
International trade allows countries to specialize and gain from exporting goods they produce cheaply while importing goods from other countries that produce them cheaply. There are direct benefits like increased income and indirect benefits like technology transfer. However, international trade can also negatively impact poorer countries if it prices out their domestic industries or leads to deterioration in their terms of trade. Trade agreements and economic integration aim to liberalize trade but have both costs and benefits that are debated. Governments use policies like tariffs and quotas to protect domestic industries from foreign competition and further other goals. Regional economic integration involves countries reducing barriers to create free trade areas, customs unions, common markets or unions with deeper coordination of economic policies.
The document discusses several theories of interest rate determination:
1. The classical theory argues that interest rates are determined by the supply of savings and demand for investment, where the equilibrium rate balances the two.
2. The liquidity preference theory views interest as the price of money, with rates set by demand for and supply of money in the economy.
3. The loanable funds theory sees rates as set by demand for and supply of credit in the economy from savers, borrowers, and foreign actors.
Micro Theory of Consumer Behavior and Demand.pptxJaafar47
This document provides an overview of microeconomics and consumer theory. It discusses:
1) Consumer behavior can be understood by examining preferences, budget constraints, and how preferences and constraints determine choice.
2) Utility is the satisfaction from consuming goods and is subjective. There are two approaches to measuring utility - cardinal and ordinal.
3) In cardinal utility theory, utility is measured in utils and has assumptions like diminishing marginal utility. In ordinal utility theory, utility is ranked and shown through indifference curves.
4) Consumer equilibrium occurs when marginal utility per dollar spent is equal across goods, or when marginal utility equals price for a single good. The consumer maximizes utility subject to their budget.
This document provides an overview of comparative statistics. It begins by defining comparative statistics as the comparison of different equilibrium positions associated with changes in exogenous variables or parameters of an economic model. It then provides examples of how comparative statistics can be used to analyze how changes in things like taxes, government spending, or weather would affect equilibrium outcomes. The document walks through examples of comparative statistics analyses for a simple market model and national income model. It discusses techniques for models with explicit solutions versus general functional forms. Finally, it outlines some limitations of comparative statistics, such as ignoring adjustment processes and time dynamics.
This document outlines the key functions and activities of commercial banks. It discusses commercial banks' primary functions of receiving deposits through various account types like demand deposits, savings accounts, and fixed deposits. It also covers commercial banks' important role in credit creation by lending out deposits and maintaining required reserves. An example is provided to illustrate how the money multiplier allows commercial banks to generate additional deposits and effectively create credit in the banking system.
This document discusses different types of adult learning, including formal education, non-formal education, and informal learning. It distinguishes between education and training, noting that training focuses on developing specific skills for present jobs while education prepares individuals for future challenges. The document then discusses teaching versus training functions. It introduces andragogy, the theory of adult learning, tracing its historical development and outlining Malcolm Knowles' assumptions about adult learners. Finally, it contrasts the roles of teachers and facilitators, defining a facilitator as someone who guides participants to explore their own knowledge and experiences rather than taking a position themselves.
This document discusses different types of adult learning, including formal education, non-formal education, and informal learning. It distinguishes between education and training, noting that training focuses on developing specific skills for present jobs while education prepares individuals for future challenges. The document then discusses teaching versus training functions. It introduces andragogy, the theory of adult learning, tracing its historical development and outlining Malcolm Knowles' assumptions about adult learners. Finally, it contrasts the roles of teachers and facilitators, defining a facilitator as someone who guides participants to explore their own knowledge and experiences rather than taking a position themselves.
The National Bank of Ethiopia (NBE) was established in 1963 through proclamation to serve as Ethiopia's central bank. It was granted autonomy and tasked with key central banking functions like monetary policy, managing reserves, supervising other banks, and issuing currency. In 1976, a new proclamation expanded the NBE's role in accordance with Ethiopia's socialist policies at the time. The NBE remains the central bank of Ethiopia today, guiding monetary policy and overseeing the financial system.
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[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.