Formulas Flashcards
What is the key takeaway of the Harrod-Domar model?
Growth = savings rate/(capital/output
What is terms of trade?
Price of a country’s exports/price of its imports
What is the gravity equation?
Barriers to trade * (GDP1*GDP2)/Distance
What is the Solow model formula?
change of capital per work = savings rate times output - (labour force growth + capital depreciation) * capital per worker
How do we calculate HDI?
(1/3)Income + (1/3)Education + (1/3)Health
Income: Log(Actual income per capita)-log(100) / Log (40,000) - Log(100)
Education: 2/3(adult literacy) + 1/3(gross school enrolment)
Health: Actual Life expectancy-25/85-25
How do we calculate the Gini Coefficient and what does it measure?
1/(population^2 * average income) * sum of income differences
To calculate gini, make an table to calculate income differences
0 = perfect equality
1 = perfect inequality
What is Kuznet’s Ratio?
Income of different groups divided by the other half
What is the world bank poverty line?
$2.15PPP in 2017
What is the headcount poverty index?
N of people under poverty line / population
What is the total poverty gap
sum of all individuals belows poverty line * (poverty line - income of persons)
sum of everyone’s gap between poverty line and incomes
What is the average poverty gap?
Total poverty gap/number of people below the poverty line
What is the normalised poverty gap
APG/income per capita
1/N*(Poverty line - PL-income for person 1, PL-income for person 2…)
What is the Foster-Greer-Thorbecke Measyre of Poverty?
1/N sum of all individuals below poverty line {(poverty line - income)/poverty line)}
Where alpha = 2, this gives greater weight to observations away from the poverty line
What is the microeconomic theory of Fertility?
Cd = f(Y,Pc,Px, tx)
Cd = demand for surviving children
Y = household income
Pc = net price of children
Px = price of other goods
tx = preferences for other goods relative to children
What are the rates of return to education
Sum (income with education-income without education)/(1+discount rate)^years
