Lesson 1 Flashcards
What are the global trends in development?
- World population living in extreme poverty: falling trend in the last 200 years (but not for SSA), large dispersion globally
- Basic Education: increasing
- Literacy: increasing
- Democracy: increasing
- Vaccination: increasing
- Child mortality: decreasing
Define economic development. What is the structural change process?
Economists think of development as a transformation of the economic structure characterized by shifts in:
1. Sectoral shares: agriculture –> manufacturing & services
2. Organisation of labor: micro-entrepreneurs turn into salaried workers hired by large firms
This is also called the structural change process.
Name ways to measure economic development.
Macro-level:
* GDP per capita
* HDI ( GDP per capita, life expectancy & educational attainment)
Micro-level:
* household consumption surveys
- night light intensity
Discuss the strenghts and weaknesses of GDP per capita as a proxy.
Strenghts:
* correlates well with other indicators of human well-being (life-satisfaction, education)
*
Weaknesses:
* national average does not represent distribution of wealth/ income
* biased towards economic activity in the formal sector (measurement error may not be random)
* infrequent (annual or quarterly data)
How does the World Bank define poverty?
- those living with less than 2.15$ a day in PPP terms (international poverty line)
