4.3.1: Measures Of Development Flashcards
What is economic growth measured with?
Real GDP and the productive potential of the country.
What is economic development measured with?
Improvements in living standards.
What are characteristics of developed countries?
-High income per capita.
-High levels of capital.
-Low unemployment rate.
-High healthcare & education levels.
What are characteristics of developing countries?
-Low income per capita.
-Low levels of capital.
-High unemployment rate.
-Dependency on exports.
How can economic growth encourage economic development?
-Lifts per capita income, raising people out of poverty.
-Creates new jobs, providing a flow of income.
-Raises tax revenues that can be invested into financing public goods & welfare spending.
What is the main measure of economic development?
Human Development Index (HDI).
What is the Human Development Index (HDI)?
It is a composite index measure based on 3 factors:
-Health: life expectancy at birth.
-Education: mean years of schooling.
-Income: GNI per capita.
How are the three factors of the HDI weighed?
Equally, and a mean is taken to give a figure between 0-1.
The higher the HDI number…
… the greater the level of development.
What are advantages of the HDI?
-Takes into account 3 factors that are important for development.
-Highlights countries with similar GNI per capita, but different levels of economic development.
What are disadvantages of the HDI?
-No consideration for income inequality.
-Doesn’t take the environment into account.
What are other measures of development?
-Inequality-Adjusted Human Development Index (IHDI).
-Multidimensional Poverty Index (MDI).
What is the Inequality-Adjusted Human Development Index (IHDI)?
A broader adjustment of HDI which includes a fourth indicator of development in inequality.
What is the Multidimensional Poverty Index (MDI)?
A broad measure of the percentage of the population that is multidimensionally poor (using data for health, education and standard of living).
