http:// copyright 2006 – biz/ed indicators of economic development
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http://www.bized.co.uk
Copyright 2006 – Biz/ed
Indicators of Economic Development
http://www.bized.co.uk
Copyright 2006 – Biz/ed
Warm-Up
• How do you tell how developed a country is?
• What are the indicators?
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Copyright 2006 – Biz/ed
Population Map
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Wealth Map
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Growth vs. Development
• Economic growth may be one aspect of economic development but it is not the same
• Economic growth:– A measure of the value of output of goods
and services within a time period
• Economic Development:– A measure of the welfare of humans in a
society
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Economic Growth• Using measures of
economic growth can give distorted pictures of the level of income in a country – the income distribution is not taken into account
• A small proportion of the population can own a large amount of the wealth in a country
But this could be just around the corner!
This might be a common picture……
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Economic Growth• Using measures of economic performance in
terms of the value of income, expenditure, and output
• GDP – Gross Domestic Product – The value of goods and services produced within a
country during a time period
• GNI – Gross National Income– The value of goods and services produced within a
country plus net income from abroad
• GDP/GNI per head/per capita – GNI divided by the total population
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Economic Growth
• High economic growth fuelled through capital spending can hide a number of underlying economic problems
Shopping Mall in Saudi Arabia Dubai Skyline
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National Income – Problems with using GDP/GNI
• Reliability of data?– How accurate is the data that is collected?
• Distribution of income?– How is the income distributed? – Does a small proportion of the population earn a high
percentage of the income or is income more evenly spread?
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National Income – Problems with using GDP/GNI
• Quality of life?– Can changes in economic growth
measure changes in the quality of life?
– Does additional earnings power bring with it additional stress, increases in working hours, increased health and family problems?
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Development
• Development incorporates the notion of measuring human welfare
• It is open to interpretation and subjectivity
• What should it include?
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Development
• Levels of poverty– Absolute poverty– Relative poverty
• Inequality
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Poverty in the World
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Poverty in the U.S.
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How is Poverty Measured?
• https://www.youtube.com/watch?v=mFHctW3zQgg&feature=player_embedded
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What is Poverty?
• Poverty is a ‘relative’ term
Romanian gypsies – is this man living in poverty? Or is this villager in rural China?
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Development• Other considerations of human welfare:
– Political freedoms?– Sustenance?– Sustainable development?– Self esteem?
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