Midterm 1 Ch 1-8 Flashcards
Agro-export-led Growth
Development strategy according to which the necessary imports for the process of industrialization are financed by exports of agricultural commodities. In some cases the country will have a comparative advantage in the specific crop.
Dutch Disease
A sudden influx of foreign currency.
Economic Development
The process of creating wealth through the mobilization of human, financial, capital, physical, and natural resources to generate marketable goods and services.
Economic Growth
Sustained increases in the real GDP of an economy over a long period of time.
Economic Rent
Difference between the market price of a good/production factor and its opportunity cost. It is also known as price needed to produce a good or keep the factor of production in its current use.
Gross Domestic Product
Total market value of final goods and services produced within an economy in a given year.
Growth led by agricultural development
Strategy aiming at minimizing any conflict between growth and equity in development which has not actually been adopted in the Middle East.
Growth led by manufactured exports
Strategy which achieves foreign exchange without sacrificing the goal of industrialization as well as the reduction of production costs.
Import-Subsidizing Industrialization
Development strategy according to which economies traditionally dependent on the export of primary commodities and raw materials moved to producing goods that were previously imported and processing domestic raw materials.
LDC
Less developed countries, that is countries of low and middle income.
MENA
Middle East and North Africa.
Mineral-export-led Growth
Strategy aiming to acquire revenues from mineral exports in order to create an industrial base for sustained development after the natural resource is exhausted.
Monetary Dutch Disease
Stimulation of a rate of inflation that is higher than the one of the major Western trading partners of the exporting country due to the spending of the oil revenues.
Purchasing Power Parity (PPP)
Rate such that a representative basket of goods in country A costs the same as in country B if the currencies are exchanged at that rate.
Real Economy Dutch Disease
An increase in the demand for both tradable and non-tradable goods due to an increase in the spending of government revenues.
Social Actors
All interests, groups and classes that interact with the state, seek to shape its policies and are affected by the state’s growth strategies.
Standard of Living
The level of material comfort as measured by the goods, services, and luxuries available to an individual, group or nation.
State Structure
The organization of the monopoly of coercive means within society, the interventions into the economy that such a monopoly makes possible and the institutions through which intervention is carried out.
Structural Transformation
Process of unbalanced sectoral growth.
Urban Biased
Concentration on urban growth that may promote growth in certain sectors (durable consumer goods).
Agro-Poor
Poorest countries for which a growth strategy led by agricultural development seems the only solution.
Backstop Technology
Cost of production of the closest available substitute.
Coupon Clippers
Countries almost entirely dependent on oil and any income earned from overseas investments.
Debt Overhang
Refers to any country with a debt/exports ratio greater than 200% which deters private investors from risking their capital.
Derived Demand for Oil
Need for oil not for our own sake, but because we need to heat homes or move around.
External Cartel Problem
When prices are high, consumers and producers have incentives to change their behavior.
Internal Cartel Problem
Cartel members have an incentive to cheat on production quotas.
Minimum Price
Lowest price at which a good will be supplied and is determined by the cost of production.
Newly Industrializing Countries (NICs)
Countries with relatively large populations, good agricultural land, long experience with industrial production and not enough oil.
Oil Industrializers
Countries with substantial oil exports and revenues as well as large population.
Peak Oil Debate
Opposing views about whether the world oil production will reach its maximum.
Price Ceiling
Price that cannot exceed a predetermined level. It is also related to the “backstop technology”.
Pro-rationing System
Unintended outcome of the system to protect domestic producers.
Proved Reserves
Reserves that can be recovered using the existing technology and prices.
Stagflation
Recession combined with inflation.
Supply Side
Relates to countries’ attempts to get a higher percentage of the oil rents (cash) and the contest for control between nation states and oil companies (control).
Watchmakers
Countries with limited natural resources which focus on investing in human capital.
Children as Pension Funds
Parents’ expectation that their children will support them financially and take care of them when they will be in old age.
Demographic Dividend
The rise in the rate of economic growth due to a rising share of working age people in a population, which exhibits a relation with the level of the savings rate.
Demographic Momentum
Continued population increase despite reduced reproductive rates which ensures large total additions to the labor force.
Demographic Transition
This transition refers to the fact that despite the decline in the population growth due to declines in fertility, populations will still continue to expand.
Dependency Ratio
The number of people under fifteen and over sixty five years old, divided by the working age population.
Enrollment Ratio
The number of students enrolled in primary, secondary and tertiary levels of education, regardless of age, as a percentage of the population of official school age for the three levels.
