Podcast
Questions and Answers
What is a major cause of global inequality today?
What is a major cause of global inequality today?
- Inequality between countries (correct)
- Inequality within countries
- Unequal distribution of natural resources
- Variations in government policies
Which Gini ratio values reflect the state of international and global inequality in 1820?
Which Gini ratio values reflect the state of international and global inequality in 1820?
- International inequality - 0.54, Global inequality - 0.67
- International inequality - 0.2, Global inequality - 0.5 (correct)
- International inequality - 0.5, Global inequality - 0.67
- International inequality - 0.4, Global inequality - 0.6
Why is measuring per capita income in poor countries especially challenging?
Why is measuring per capita income in poor countries especially challenging?
- Rural economies often lack market transactions (correct)
- Income from foreign aid is disregarded
- All income is reported accurately in tax returns
- High levels of inflation affect currency values
What does the Gini ratio for global inequality account for?
What does the Gini ratio for global inequality account for?
When comparing countries' per capita incomes, what must be done to facilitate accurate comparison?
When comparing countries' per capita incomes, what must be done to facilitate accurate comparison?
What does the concept of 'big push' theory in development economics refer to?
What does the concept of 'big push' theory in development economics refer to?
Which of the following concepts is related to the challenges faced by developing countries due to dependency on developed ones?
Which of the following concepts is related to the challenges faced by developing countries due to dependency on developed ones?
What criticism is often levied regarding the empirical approach in development economics?
What criticism is often levied regarding the empirical approach in development economics?
Which of the following is NOT a focus of new empirical development economics?
Which of the following is NOT a focus of new empirical development economics?
What is a primary goal of the New International Economic Order (NIEO)?
What is a primary goal of the New International Economic Order (NIEO)?
In the context of development economics, what does the term 'low-level equilibrium trap' refer to?
In the context of development economics, what does the term 'low-level equilibrium trap' refer to?
Which approach in development economics emphasizes the necessity of both theoretical and empirical perspectives?
Which approach in development economics emphasizes the necessity of both theoretical and empirical perspectives?
What does 'immisering growth' refer to in development economics?
What does 'immisering growth' refer to in development economics?
What does a Gini Ratio of 0 indicate?
What does a Gini Ratio of 0 indicate?
Which Gini Ratio value corresponds to the year 2002 for international inequality?
Which Gini Ratio value corresponds to the year 2002 for international inequality?
In the year 2011, which Gini Ratio value reflects global inequality?
In the year 2011, which Gini Ratio value reflects global inequality?
Which year shows the highest Gini Ratio for unweighted international inequality from the data?
Which year shows the highest Gini Ratio for unweighted international inequality from the data?
What is the Gini Ratio for population weighted inequality in 1913?
What is the Gini Ratio for population weighted inequality in 1913?
How does the Gini Ratio in 1993 compare to that in 1988 for global inequality?
How does the Gini Ratio in 1993 compare to that in 1988 for global inequality?
What was the Gini Ratio for international inequality in 1820?
What was the Gini Ratio for international inequality in 1820?
Which statement best describes the trend of the Gini Ratio from 1820 to 2013?
Which statement best describes the trend of the Gini Ratio from 1820 to 2013?
What does the Neoclassical growth model suggest occurs if capital grows faster than labor?
What does the Neoclassical growth model suggest occurs if capital grows faster than labor?
According to the Neoclassical model, what is expected to happen to per capita incomes across countries?
According to the Neoclassical model, what is expected to happen to per capita incomes across countries?
What major factor do studies find most important for growth in developing countries compared to developed countries?
What major factor do studies find most important for growth in developing countries compared to developed countries?
What is a key assumption in the Neoclassical growth model regarding returns to capital?
What is a key assumption in the Neoclassical growth model regarding returns to capital?
What does the 'New' (endogenous) growth theory challenge?
What does the 'New' (endogenous) growth theory challenge?
What does the Neoclassical growth model argue against from Harrod's conclusions?
What does the Neoclassical growth model argue against from Harrod's conclusions?
In the production function approach, what is commonly treated as a residual factor?
In the production function approach, what is commonly treated as a residual factor?
What are key factors identified in the 'New' growth theory?
What are key factors identified in the 'New' growth theory?
What can affect the elasticity and rate of return in the production function approach?
What can affect the elasticity and rate of return in the production function approach?
What does empirical research suggest about conditional convergence?
What does empirical research suggest about conditional convergence?
Which model suggests that economies will naturally converge on a growth rate over time?
Which model suggests that economies will naturally converge on a growth rate over time?
What is a focus of 'growth diagnostics' in economic development?
What is a focus of 'growth diagnostics' in economic development?
Which factor could be a reason for low investment according to the growth diagnostics approach?
Which factor could be a reason for low investment according to the growth diagnostics approach?
Why is there no evidence of convergence in the world economy?
Why is there no evidence of convergence in the world economy?
What does the idea of 'catch up' imply in the context of growth?
What does the idea of 'catch up' imply in the context of growth?
What is one of the main reasons countries experience volatile growth rates?
What is one of the main reasons countries experience volatile growth rates?
Study Notes
Development Concepts in Economics
- Low-level equilibrium trap impedes growth in underdeveloped economies.
- Models of population and growth address demographic influences on economic development.
- 'Big push' theory suggests a significant investment surge is needed to break out of poverty.
- Dynamic externalities indicate how economic activities impact others, creating positive or negative effects.
- Immisering growth refers to situations where growth benefits few while harming many.
- Models of dualism examine the coexistence of traditional and modern sectors in the economy.
- Dual gap analysis highlights the resource gap in less developed countries in achieving growth.
- Dependency theory critiques the influence of international economic structures on developing countries.
- Growth pole analysis identifies areas or sectors that can drive economic development due to their growth potential.
- Rent-seeking behavior emphasizes how individuals or groups may exploit resources for personal gain rather than societal benefit.
New Empirical Development Economics
- Growth in empirical studies, emphasizing the need for micro and macro-empirical methods.
- Micro-empirics validate theories through household-level decision-making studies, such as randomized control trials.
- Macro-empirics analyze relationships between broader economic variables and growth determinants.
- Balance between empirical studies and theoretical frameworks is necessary for effective prediction and policy evaluation.
New International Economic Order (NIEO)
- Aims for equitable economic participation of poor countries on a global scale.
- Advocates for improved terms of trade and greater access to developed markets.
- Emphasizes the need for increased aid and debt relief for poorer nations.
- Promotes inclusion of poorer countries in decision-making processes of international institutions.
International and Global Inequality
- Three Gini ratio measures: international inequality (equal country weight), population-weighted international inequality, global inequality (individual households).
- Historical context shows decline in international inequality compared to rising global inequality over centuries.
- Gini ratio for international inequality rose from 0.20 in 1820 to 0.54 today; global inequality increased from 0.50 to 0.67.
- Current global inequality primarily stems from disparities between countries rather than within them.
Measurement of Per Capita Incomes
- Difficulty in comparing per capita income in impoverished regions due to various factors.
- Revenue figures are often skewed as informal economies and subsistence production are not fully captured.
- Conversion of income figures into common currency is complicated by non-traded goods and fluctuating exchange rates.
Neoclassical Growth Model
- Solow's model challenges earlier pessimistic views, suggesting mechanisms do exist for growth rate equilibrium.
- Capital and labor interplay dictates growth rates, favoring capital accumulation over time.
- Predicts that poorer nations will experience faster economic growth due to higher marginal product of capital.
Production Function Approach
- Neoclassical production function assesses aggregate output based on labor, capital, and technological progress.
- Initial studies indicated technical progress as key for growth in developed nations.
- Differentiated findings in developing countries highlight capital input as a primary growth driver.
Endogenous Growth Theory
- Emerged in the 1980s, countering the notion of inevitable diminishing returns in capital.
- Human capital and research play crucial roles in sustaining growth and preventing convergence.
- Evidence for conditional convergence suggests faster growth in poorer nations, given equal educational levels.
Growth Diagnostics
- Methodology investigates specific constraints affecting individual countries' growth trajectories.
- Emphasizes the variability of growth experiences due to differing investment climates and financial conditions.
- Identifies binding constraints that may hinder investment and economic advancement.
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Description
Explore the factors contributing to global inequality today through this quiz. Test your knowledge on the Gini ratio, its historical context, and the challenges of measuring per capita income in poorer nations. Understand what the Gini ratio accounts for and how to compare per capita incomes accurately.
