Economics 2

100問 • 1年前

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The analysis of challenges and opportunities in transforming an emerging economy into a developed one. Its purpose is to help developing nations identify and overcome hurdless in economic growth, such as poverty, inequality and market failure.

Development Economics

a situation where the free market fails to efficiently allocate goods and services in a way that maximize society's welfare. Occurs when the market does not produce the optimal level of goods or services, or when the distribution of goods and services is not equitable.

Market Failure

occurs when the production or consumption of a good or service has an impact on a third party that is not accounted for in the market price. Ex: Pollution from a factory affects the health of people living nearby.

Externalities

Goods or services that are non-excludable (difficult to exclude anyone from enjoying the good) and non-rivalrous (one person's consumptions does not reduce the availability of the good for others. Ex: Public parks and national defense

Public Goods

Occurs when there are few or no competitors in a market, which can lead to higher prices and reduced output. Ex: Monopilies and oligopolies

Imperfect Competition

Occurs when one party in a transaction had more information than the other party, whiich can lead to inefficiencies in the market. Ex: A car dealer has more information about the car than the buyer

Asymmetric Information

a market structure in which there is some degree of market power held by individual firms or a group of firms. In an imperfectly competitve market, firms have the ability to influence the market price of their products or services.

Imperfect Competition

a single form controls the entire market for a product or service

Monopoly

a large number of firms competing in the market, but each firms sells a slightly differentiated product

Monopolistic Competition

a small number of large firms dominate the market.

Oligopoly

Buyer side of imperfect competition. There is only one buyer or dorminant buyer.

Monopsony

Market condition characterized by a small number of buyers or purchasers who have significant control over the purchase and pricing of goods or services in a particular industry.

Oligopsony

Theory based on the idea that wealth and power of a nation depend on the amount of gold and silver it possesses, and that the accumulation of these precious metals shoud be the primary goal of economic policy.

Mercantilism

Theory that emphasizes the importance of protecting and promoting the domestic economy, often at the expense of international trade and cooperation.

Economic Nationalism

Theory that explains how economies progress through five distinct stages of growth: trditional society, preconditions for takeoff, takeoff, drive to maturity and high mass consumption

Linear Stages of Growth Model

Economy based on agriculture, with most people engaged in subsistence farming.

Traditional Society

A few sectors of the economy begin to develop, such as manufacturing and infrastracture, which lead to increased productivity and higher living standard.

Preconditions for Takeoff

The economy experience rapid growth as the manufacturing sector expands and new industries emerge.

Takeoff

The economy continues to diversify and mature, with a focus on developing new technologies and improving efficiency.

Drive to Maturity

The economy reaches a stage of maturity where consumption of goods and services becomes the primary driver of economic growth. This is characterized by high levels of wealth and hight dtandard of living.

High Mass Consumption

Theory explains the relationship between savings, investment, and economic growth. The model was developed by economists Sir Roy Harrod and Evsey Domar in the 1940's. Theory that explains that the rate of economic growth in a country is determined by two factors: the rate of savings and the capital-outpyt ratio. Theory that states that the rate of growth of GDP = Savings Ratio/Capital output ratio.

Harrod-Domar Model

Theory that was developed by Nobrl Prize-winning economist Rovert Solow. Changes in the level of output in an economy over time as a result of changes in the population (labor) growth rate, the savings rate, and the rate of technological progress.

Solow-Growth Model

Theory which emphasizes that economic growth is driven by shifts in the structure of an economy, as well as changes in the composition of output and employment (technology and government policies).

Structural Change Theory

Large portion of population is engaged in farming.

Agricultural

Manufacturing is the dominant sector

Industrial

Majority of workers are employed in service-related industries, such as finance, education, and healthcare.

Service-based

Framework in economics that emphasizes the relationships between developed and developing countries, and how these relationships contribute to the economic underemployment of the latter. The theory suggest that the global economic system is structured in a way that perpetuates the economic dependency of developing countries on developed countries, thereby hindering their economic growth and development.

International Dependence Theory

The process of setting goals and objectives for an economy, and then designing policies and strategies to achieve those goals.

Economic Planning

Economic Planning Approaches

Centralized Planning Market-Based Planning Mixed Economy Planning Targeted Planning Participatory Planning Green Planning Decentralized Planning Export-Oriented Planning Import Substitution Planning Human Capital Development Rural Development Regional Integration Sustainable Development Cancellation of Nation's Debt

The government makes all the decisions about how resources will be allocated and how goods and services will be produced and distributed.

Centralized Planning

The government taking control of private industries and making them state-owned.

Nationalization

The government ser prices for goods and services.

Price Control

The government put in place strict rules on who, what, how business can enter the market and sets price

Regulation

The market, rather than a central authority, determines production, dustribution, and pricing of goods and services.

Market-Based Planning

Individuals and businesses make their own decisions about what to produce and consume, and price are set by supply and demand with minimal government intervention and limited price control.

Free Market

The government supports competitions

Competition

The government reduces or eliminates regulations on businesses and industries.

Deregulation

The government plays a role in regulating and guiding the economy. but also allows market forces to operate.

Mixed Economy Planning

The government provides public goods and services such as healthcare, education, and infrastracture.

Public goods and services

The government uses taxes and subsidies to encourage or discourage certain types of economic activity.

Taxes and subsidies

The government collaborates with private businesses to provide goods and services.

Private-Public Partnership

The government sets specific goals and objectives for certain sectors of the economy, such as infrastracture or education.

Targeted Planning

The government supports for specific industries or sectors of the economy.

Industrial policies

The government spending on public infrastracture such as roads, bridges and public transportation

Infrastracture Investment

The government promotes economic growth in specific regions or areas that may be struggling economically.

Regional Development

The government engages with citizens and other stakeholders to develop policies and strategies that are inclusiveand address the needs and concerns of all segments of society.

Participatory Planning

Creating opportunities for citizens to deliverate and discuss public issues in a structured and inclusive way.

Deliberative Democracy

Bringing together stakeholders from different sectors such as government, business, and non-profit organizations, to work together on a common goal and involved in decision-making.

Collaborative Decision-Making

Allowing community members to directly participate in the budgeting process, by proposing and voting on projects and initiatives that will be funded by public resources.

Participatory Budgeting

Giving individuals snd communities more control over the decisions that affect their lives. This can involve providing education and training, creating opportunities for participation. and building capacity for collective actions.

Empowerment

a planningapproach that aims to achive sustainable development by prioritizing environmental considerations.

Green Planning

Devolving economic decision-making power to local or regional governments, allowing them to set priorities and allocate resources based on local beeds and circumstances.

Decentralized Planning

Approach that focuses on the production and exports of specific goods or services. , with the aim of increasing foreign exchange earning and stimulating economic growth

Export-Oriented Planning

Promoting the domestic production of goods that are currently being imported, with the aim of reducing dependence on foreign goods and romoting economuc self-sufficiency.

Import-Oriented Planning

Investing in education and training in order to develop a skilled workforce that can drive innovation and economic growth.

Human Capital Development

Promoting agriculture and rural industries in order to reduce poverty and inequality in rural areas.

Rural Development

Promoting economic integration and cooperation among neighboring countries in order to achive economies of scale and greater reginal stability.

Regional Integration

Development that aims to ensure that the next generation enjoy the resources we are enjoying now.

Sustainable Development

The reduction, if not total elimination of the country's national debt.

Cancellation of Nation's Debt

also known as public debt, refersto the total amount of money owed by a country's central government to its creditors.

National Debt

Debt that is owed to creditors within the country, such as domestic banks, pension funds, or individual investor.

Internal Debt

Debt that is owed to foreign creditors, such as other countries, international organizations, or foreign banks.

External Debt

Debt securities issued by governments to raise capital. The buyer receives regular interest payments and the return of the principal amount at maturity

Government Bonds

Short-term debt securities issued by a government, typically with a maturity of less than one year. These are sold at a discount to their face value and do not pay interest. Instead, the investor earns a profit when they redeem the bill at face value.

Treasury Bills

Direct loans from international organizations or other countries to finance their expensitures.

Loans

An older method that divided the countries into rich developed countries and poor undeveloped countries.

Developed vs. Undeveloped

Similar to Developed/Undeveloped Model, but this one allows that countries can change over time.

Developed vs. Developing

often have high levels of economic and social development and economies based on the service sector.

Developed Countries

often have low levels of economic and social development and economics based on primary industries like agriculture.

Developing Countries

These countries are most often within the sphere of American influence. They share common political and economic interests. Industrialized, developed, caputalist countries.

First World Countries

Former communist-socialist countries with strong industrial and social development

Second World Countries

The underdeveloped countries of the world, especially those with widespread poverty

Third World Countries

Countries that have a: mature and sophisticated economy, advanced technological and physical infrastracture, and diverse industrial and service sectors.

Industrialized Countries

Countries that are not yet "developed" but are doing better than "developing countries". Usually, these countries: switch from agricultural to industrial, increase ipen-market economy, and receive investment from foreign countries.

Newly Industrialized Country

Countries that have a high GNI per capita and a high quality of life.

High Income Countries

Countries that have a low GNI and a low quality of life.

Low Income Countries

Rapidly getting richer countries. Their economy is moving from primary industry to secondary industry

New Emerging Economies

aims to increase a country's national income

Economic Growth

aims to increase the country's welfare.

Economic Development

Metrics of Economic Growth

Gross Domestic Product Gross National Product Gross National Income

The total value of final goods and services produced within an economy in a given period of time.

Gross Domestic Product

Gross Domestic Product without any effect of inflation. Based on current year prices.

Nominal GDP

Inflation-adjusted GDP of a country. Based on base-year prices.

Real GDP

Expenditure Approach

Z = C + I + G + (X-M)

Income Approach

Z = R + I + P + W

The total value of final goods and services produced during a given period by the citizens of a country.

Gross National Product

The total amount of money earned by the nation's people and businesses, including subsidies.

Gross National Income

Metrics of Economic Development (Welfare Measures)

Human Development Index Poverty Measures

Measures Social and Economic Development, via: Number of years of schooling, Life expectancy, GNI per capita.

Human Development Index

Economic condition where humans experience a lack of certain commodities essential for stable living.

Poverty

Households whose per capita income fall below the poverty threshold at most observable points.

Chronic Poverty

Households that are not poor on average, but are only poor at given points in time.

Transient Poverty

Minimum level of income needed to satisfy needs (Adequate)

Poverty Threshold/Poverty Line/Poverty Limit

Poverty is multifaceted. The three dimension of poverty are: Health, Education, Standard of Living

Multidimensional Poverty Index

Government Intervention

Price Control Measures Fiscal Policy Monetary Policy Monetary Policy Tools

A legal maximum on the price of a good or service. Example: Rent control

Price Ceiling

A legal minimum on the price of a good or service. Example: minimum wage

Price Floor

The government's decisions about taxation and spending.

Fiscal Policy

The government levies more taxes and tariffs

Tight Fiscal Policy

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The government lower taxes and tariffs

Loose Fiscal Policy

Trends and Issues Overall

Cydrix James Natanauan · 154問 · 1年前

Trends and Issues Overall