...Linear Stages of Growth/Harrod-Domar Model This model proposes that a balanced growth in the economy has no natural reason. It includes three concepts of growth which mainly are warranted growth, natural growth and actual growth. Warranted growth is the rate that firms believe that growth will be achieved without additional investment. Natural growth is the increase of labor force which keeps unemployment at a constant level. Lastly, actual growth is the final actual result that you obtain by using the Harrod-Domar model. The model implies that the amount of labor and capital are dependent factors of growth because it leads to more investments that accumulate more capital and economic growth. The growth of the economy underlies with the policies to increase investment, by increasing the amount of saving, and using investment more productively through technology. For less economically developed countries, labor has a higher amount compared to the physical which means that there is no balance. This distortion results to insufficient income and low rate of saving. The limitation of this model is that it sees economic growth and development as the same. Economic growth, in reality, is just a division of development. It also involves that less developed countries should get money to finance the investments being made to result in economic growth. However, this implication often leads to the increase of debt rate due to repayment problems. Structural Change Model/Lewis Theory of...
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...regional economic growth of China 1. Introduction Economic growth is always an important topic in the economics research. Many study in the past just considered region as an isolated “island”, and the mutual relations among different regions were usually ignored. However, regional economy is an open system. Factors such as trade, factor mobility (labor or capital), and technology or knowledge spillover will all make relations among regions become complicated. Under such circumstance, regional economy is no longer isolated but strongly related. The development of regional economy not only relies on its own endowment, also highly depends on the development of other regions This paper is going to bring relative spatial autocorrelation analysis and econometrics methods in the analysis of regional economic growth in China. It attempts to test the spatial dependence of economic growth among different provinces in China and its tendency. The inner mechanism of regional economic growth will also be discussed. In the second section, I will briefly introduce the literature review about regional economic study in China. In the third section, using a sample of per capita GDP data over 1978-2008 in 31 provinces in mainland China, I compute a global spatial autocorrelation, and use the local spatial autocorrelation to get general idea where this global spatial autocorrelation come from. In the fourth part, the spatial factors which influence regional economic growth will be tested...
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...:ﺗﺌﻮری ﺣﺴﺎﺑﺪاری :)درﺟﮫ اول اھﻤﯿﺖ (ﻣﻨﺎﺑﻊ اﺻﻠﯽ ﺗﺌﻮری ﺣﺴﺎﺑﺪاری (ﺟﻠﺪ اول)، دﮐﺘﺮ ﺳﺎﺳﺎن ﻣﮭﺮاﻧﯽ، دﮐﺘﺮ ﮐﺮﻣﯽ، ﺳﯿﺪ ﻣﺼﻄﻔﯽ ﺳﯿﺪ ﺣﺴﯿﻨﯽ، اﻧﺘﺸﺎرات ﻧﮕﺎه داﻧﺶ (ﺟﻠﺪ دوم ھﻨﻮز ﻣﻨﺘﺸﺮ ﻧﺸﺪه .1 )اﺳﺖ )ﻧﻈﺮﯾﮫ ھﺎی ﺣﺴﺎﺑﺪاری ( ﺟﻠﺪ اول )، دﮐﺘﺮ ﺛﻘﻔﯽ ، اﻧﺘﺸﺎرات ﺗﺮﻣﮫ ( ﺟﻠﺪ دوم ھﻨﻮز ﻣﻨﺘﺸﺮ ﻧﺸﺪه اﺳﺖ .2 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، اﺳﮑﺎت، ﺗﺮﺟﻤﮫ دﮐﺘﺮ ﭘﺎرﺳﺎﯾﯿﺎن، اﻧﺘﺸﺎرات ﺗﺮﻣﮫ ﻓﺼﻮل ۱، ۲، ۳، ۴، ۵، ۶، ۸ ، ۹ .3 )ﻧﺸﺮﯾﮫ ۳۱۱ ﺳﺎزﻣﺎن ﺣﺴﺎﺑﺮﺳﯽ (ﻣﻔﺎھﯿﻢ ﻧﻈﺮی ﮔﺰارﺷﮕﺮی ﻣﺎﻟﯽ .4 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، واﺗﺲ و زﯾﻤﺮﻣﻦ، دﮐﺘﺮ ﭘﺎرﺳﺎﺋﯿﺎن، ﻓﺼﻮل ۴ و ۵ و ۷ .5 :درﺟﮫ دوم اھﻤﯿﺖ ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، ھﻨﺪرﯾﮑﺴﻦ (ﺟﻠﺪ اول و دوم)، دﮐﺘﺮ ﻋﻠﯽ ﭘﺎرﺳﺎﯾﯿﺎن، اﻧﺘﺸﺎرات ﺗﺮﻣﮫ ﻓﺼﻮل ۲۱، ۲۲ و ۳۲ .1 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، ﺑﻠﮑﻮﯾﯽ ، ﺗﺮﺟﻤﮫ دﮐﺘﺮ ﭘﺎرﺳﺎﯾﯿﺎن، اﻧﺘﺸﺎرات ﺗﺮﻣﮫ. ﻓﺼﻮل ۹ ، ۰۱، ۲۱ و ۴۱ .2 Munich Personal RePEc Archiveدﮐﺘﺮ ﮐﺮﻣﯽ و ﮐﺎﻣﺮان ﺗﺎﺟﯿﮏ، اﻧﺘﺸﺎرات ﻧﮕﺎه داﻧﺶ، ﻓﺼﻮل ۲ ، ۴ ، ۷ .3 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، وﻟﮏ ، ﺗﺮﺟﻤﮫ :درﺟﮫ ﺳﻮم اھﻤﯿﺖ ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، ھﻨﺪرﯾﮑﺴﻦ (ﺟﻠﺪ اول)، دﮐﺘﺮ ﻋﻠﯽ ﭘﺎرﺳﺎﯾﯿﺎن، اﻧﺘﺸﺎرات ﺗﺮﻣﮫ ﻓﺼﻮل ۴، ۶، ۸، ۹ ، ۰۱ .1 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، ﺑﻠﮑﻮﯾﯽ ، ﺗﺮﺟﻤﮫ دﮐﺘﺮ ﭘﺎرﺳﺎﯾﯿﺎن، ﻓﺼﻮل ۵، ۶ و ۱۱ .2 ﺗﺌﻮری ﺣﺴﺎﺑﺪاری، اﺳﮑﺎت، ﺗﺮﺟﻤﮫ دﮐﺘﺮ ﭘﺎرﺳﺎﯾﯿﺎن، ﻓﺼﻮل ۰۱ و ۱۱ .3 :ﺣﺴﺎﺑﺪاری ﻣﺪﯾﺮﯾﺖ :)درﺟﮫ اول اھﻤﯿﺖ (ﻣﻨﺒﻊ اﺻﻠﯽ ﺣﺴﺎﺑﺪاری ﻣﺪﯾﺮﯾﺖ، دﮐﺘﺮ ﺳﺎﺳﺎن ﻣﮭﺮاﻧﯽ، دﮐﺘﺮ ﮐﺮﻣﯽ، ﻣﺤﻤﺪ ﻋﺒﺪزاده و اﻣﯿﺪ ﻓﺮﺟﯽ، اﻧﺘﺸﺎرات ﻧﮕﺎه داﻧﺶ .1 :درﺟﮫ دوم اھﻤﯿﺖ ﺣﺴﺎﺑﺪاری ﻣﺪﯾﺮﯾﺖ، دﮐﺘﺮ ﻧﯿﮑﺒﺨﺖ و زھﺮا دﯾﺎﻧﺘﯽ دﯾﻠﻤﯽ، ﻧﺸﺮ ﻣﮭﺮﺑﺎن ( ﻓﺼﻮل ھﺰﯾﻨﮫ ﯾﺎﺑﯽ ﮐﯿﻔﯿﺖ، ھﺰﯾﻨﮫ ﯾﺎﺑﯽ ھﺪف، ﺳﯿﺴﺘﻢ اﻗﺪام ﺑﮫ ھﻨﮕﺎم .1 ).ﺧﻮاﻧﺪه ﺷﻮد ﺣﺴﺎﺑﺪاری ﺻﻨﻌﺘﯽ ( ﺟﻠﺪ دوم)، ھﻮرن ﮔﺮن و ھﻤﮑﺎران، ﺗﺮﺟﻤﮫ دﮐﺘﺮ ﭘﺎرﺳﺎﯾﯿﺎن و ﻣﻮﺳﯽ ﺑﺰرگ اﺻﻞ (ﻓﺼﻮل ﺑﻮدﺟﮫ ﺟﺎﻣﻊ، ﺑﻮدﺟﮫ اﻧﻌﻄﺎف .2 )ﭘﺬﯾﺮ...
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...Questions for Test 2 ECO 320 Economics of Development Chapter 1 1.Developing countries share some features (low levels of income, etc.), but they are quite different in many respects. Explain what we mean by “institutions” and how is it that developing countries different in institutional development. How would the differences in the development of institutions make it more difficult to formulate policies for development and theories of development? 2.Is there a fixed set of prerequisites for development? Explain. Chapter 2 3.Comment on the following statement: The level and growth rate of real GDP per capita can be a misleading indicator of development. At the same time, countries that experience sustained increases in real GDP per capita over time will tend to be more developed. 4.Why is an understanding of what “development” means crucial to policy formulation in developing nations? Why do you think a country may have difficulties in agreeing on a rough definition of development? 5.Why do we use “purchasing power parity” measures when comparing incomes across countries? 6.Suppose that you had to explain this graph to someone who is not a “visual learner” – he just doesn’t get pictures. You have to explain every feature of the graph using words. 7.What are the components of the Human Development Index? What are some strengths and weaknesses of the HDI as a comparative measure of human welfare? 8.Discuss the Millennium Development Goals...
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...a very favorable state of the economy in 2000. The NBER determined that business activities were at a peak during this year, evident in the below graph where you can see the rates peaked during the Spring of 2000. Since a peak marks the end of an economic expansion and beginning of a recession, many economists braced for the economic downturn. There is some controversy amongst economists about whether the United States was actually in a recession following the 2000 peak; regardless, any down turn was light and did not create an enormous stir in the country’s business activities. Everything about the status quo of the economy in 2000 led to the notion that the U.S. was at a peak. For example, per capita GDP was $33,900, real GDP growth rate was at 4.1%, inflation rate was at 2.2%. All these factors were up from the previous year. According to Wikipedia, “from 2000 to 2001, the Federal Reserve in a move to quell the stock market, made successive interest rate increases, credited in part for ‘plunging the country into a recession’ beginning in 2001.” Using the stock market as an unofficial benchmark, a recession would have begun in March 2000 when the NASDAQ crashed following the collapse of the Dot-com bubble. However, economic conditions did not satisfy the common shorthand definition of recession, which is "a fall of a country's real gross domestic product in two or more successive quarters.” But, the last quarter of 2000 revealed several major corporations announcing...
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...Telecommunications and Economic Development: Empirical Evidence from Southern Africa by James Alleman Carl Hunt Donald Michaels Milton Mueller Paul Rappoport Lester Taylor 2 International Telecommunications Society • Sydney TABLE OF CONTENTS 1 Executive Summary1-5 1.1 Methodology / Economic Analysis 1-2 1.2 Reasons for Under-Investment in the Telecommunications Sector 1.3 Conclusions 1-3 2 Overview 2-1 2.1 Introduction 2-1 2.2 Purpose of this Paper 2-1 3 Methodology 3-1 3.1 Literature Review 3-1 3.1.1 Macroeconomic statistical studies 3.1.2 Policy Implications 3-6 3-3 4 Data 4-1 4.1 Data Deficiencies for Southern Africa 4-1 4.2 Data Problems 4-2 4.3 Limited data 4-2 5 Results 5-1 5.1 GDP and Telephone penetration 5-2 6 Conclusions Error! Bookmark not defined. 7 Selected Bibliography and References 7-1 1-2 4 International Telecommunications Society • Sydney "... telecommunications policies affect not only telecommunications..., but also the economic development... and social, cultural and political growth." Pekka Tarjanne1 1 Executive Summary 2 Many countries in the developing world must decide how to best allocate scarce resources for improved economic development. An ITU study of telecommunications and development, The Missing Link, concluded that "telecommunications can increase the efficiency of economic, commercial, and administrative activities, improve the effectiveness...
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...Economic Modelling 28 (2011) 2404–2408 Contents lists available at SciVerse ScienceDirect Economic Modelling j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e c m o d Regime-switching effects of debt on real GDP per capita the case of Latin American and Caribbean countries Tsangyao Chang ⁎, Gengnan Chiang Department of Finance, Feng Chia University, Taichung, Taiwan a r t i c l e i n f o a b s t r a c t In this paper, we try to investigate how the debt and real GDP per capita relationship varies with indebtedness levels and other country characteristics in a balanced panel of 21 developing Latin American and Caribbean countries over the period 1992–2006. The empirical results indicate that there exist two threshold values of 32.88% and 55.89%. The latter is lower than the Maastricht criterion and Stability and Growth Pact of a total external Debt per GDP ratio at 60% in the OECD countries. Both thresholds divide our panel into three regimes. In the middle (stimulus) regime, the Debt per GDP ratio has a positive impact on real GDP per capita, which is consistent with the stimulus view (Eisner, 1984). However, the impact becomes negative and consistent with the crowding-out view (Friedman, 1977, 1985) in the left and right (crowding-out) regimes. Based on our findings, we find no supportive evidence for Ricardian view (Barro, 1989). Therefore, our empirical results have important implications for fiscal policymakers in these Latin...
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...the Solow model for convergence in the living standards, that is, for whether rich countries tend to grow slower than poor countries. The findings of the study indicate that the augmented Solow model can forecast accurately the rate of convergence of different countries while keeping the growth of population and capital accumulation constant. The authors states that two variables, that is, rates of saving and population growth of a country, can be used to determine the country’s steady-state level of income per capita. This model predicts that higher the rate of population growth of a country, poorer is the country and on the other hand, higher the rate of saving, richer is the country (Edward Gamber, 2006). Overall, the findings reported in this paper shows doubt on the recent style among the economists to abandon the Solow model growth in the favor of endogenous-growth models which assume steady or growing returns to scale in capital. The author argues about the fact that the predictions of the Solow model are firstly to an approximation, consistent with the evidence and by examining the current data for a large set of countries we also find that saving and population growth affect income the same way the Solow model predicted. Moreover, more than half of the country variation in income per capital can be explained by these two variables alone. And also it can be added that even the Solow model can predict the direction of effects of savings and population growth, it is unable...
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...investments embodied in the labour force. High capital per worker is likely to reflect high living standards and I will discuss strengths and weaknesses of this argument, and its role for developing economies using the neo-classical growth model. Neoclassical Growth Model The neo-classical growth model attempts to explain long-run economic growth by looking at capital accumulation, labour or population growth, and increases in productivity. We assume savings are based on a constant fraction of total income (Y). Yt – Ct = St = sYt Where Y is income in year t, C is consumption, S is the gross aggregate savings, s is the ratio of saving to GDP or the gross savings rate. There are two relationships between output and capital. Firstly, the level of capital stock determines the amount of output produced; also the amount of output determines the level of saving and in turn, the capital accumulation over time. We assume capital is subject to decreasing returns so when the capital per worker is already high, the impact on output of the last unit of capital accumulated will always be less than the one before. Another assumption, for simplicity, is that there is no technological developments or labour force growth. In the short run the model predicts the rate of growth of the economy is determined by capital accumulation, which is in turn determined by the savings rate (s) and the rate of deprecation. Kt+1 = s f (kt ) − (n...
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...Solow Model The Solow Model states that by looking at productivity, capital accumulation, population growth and technological progress we can explain how long run economic growth can be achieved. The Solow Model also makes a clear distinction that new capital is more valuable than old capital. This is because since capital is produced based on new technology and technology is improved within time, then new capital will be more productive than old capital. One of the most important things any economy would like to achieve is a steady state. A steady state is a situation in which the economy’s output per worker, consumption per worker, and capital stock per worker are constant (Abel & Bernanke & Croushore, 2012, pg. 216). The rate of growth of an economy as it emerges to a steady state is determined by the rate of capital accumulation. Capital accumulation is in turn determined by the saving rate. Of course the higher the saving rate the high the amount of capital accumulation. The higher a countries saving rate the faster it will grow, however this is true only in the short run. In the long run, the Solow Model states that it is technological innovation rather than capital accumulation that sustains the growth. In fact capital accumulation might hinder growth in the long run because of the marginal productivity of labor, which will decrease. Thus saving while desirable in the short run is not in the long run, unless it is accompanied with technological innovation...
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...Chapter 1: Introduction Introduction Over a decade, the consensus of economics growth remains the key focus for every nation notably in least development countries (LDC). Poverty eradication, income distribution and welfare enhancement often discussed widely by these nations. Economic growth is often seen as the 'holy grail' of economic policy. This simplistic emphasis on economic growth is often criticized because of the limitations of economic growth in improving living standards. Another question arise is does economic growth promote sustainable improvement on country development? Malaysia economy has been transformed from a protected low income supplier of raw materials to a middle income emerging multi-sector market economy in the past 20 years. This is driven by the export of manufacturing goods, particularly electronics and semiconductors, which constitute about 90% of exports. In this paper, the primary objective is to investigate what is the relationship between openness, inflation and FDI with economic growth. Export and import often plays pivotal role in determine the gross domestic product (GDP) in a nation. In particular, the research question to be outlined is how does openness, inflation and FDI affect economic growth. Multinational corporations (MNCs) are those organizations that own or controls productions of goods or services in one or more countries other than its home country. MNC plays major role in foreign aids recipient countries, it contribution to...
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...composed of three elements that together determine a certain ability of an individual to work: namely, skills, experiences and knowledge. Human capital can be developed through continuing education and attention to the health of an individual. The inclusion of human capital in the economic analysis is an important step. It is generally theorized that accumulation of human capital is a key driver of economic growth. According to economists, dissemination of knowledge to general population allows increasing returns and generates positive externalities. Therefore, it is a central concept of development economics that investment in human capital should be the foremost priority of developing countries. Foreign direct investment refers to international movement of capital across national boundaries. This may take the shape of creation of a subsidiary abroad or to exercise control on the management of a company in another country. The effects of FDI are generally considered to be highly positive on the growth of host country since it leads to transfer of technology and generation of employment in host countries. FDI has experienced strong growth since the mid-1980s and also contribute significantly to economic globalization. Foreign direct investment is also presumed to have positive outcomes for workers in the form of higher wages (Eicher &...
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...Management as a critical element in economic growth In the light of the increasing concern for economic growth, it is natural for social scientists to look for underlying causes of that growth. Why does one country have a higher per capita national income than another? Or why do productivity increases differ in various countries? Concern for productivity and economic growth. Because of the disparity in national incomes and the problems caused in much of the world by incomes that do not allow for adequate subsistence, let alone the raising of cultural standards, the attention of world leaders and development economists has naturally turned to the need for increasing productivity. The necessities of economic development were thought to be the transfer of technology, education, and capital. But as important as these are, it is now recognized that advanced managerial know-how is essential and often overlooked as an element responsible for growth and improved productivity. Although one must grant that pure technical knowledge is necessary for economic growth, such knowledge is fairly easy to transfer between countries, and no nation holds a monopoly on it for very long. Even a technological development as sophisticated as that of the atomic bomb, whose secrecy was closely protected by the US, became known in Russia, France, China, and elsewhere in less than two decades. Most advances in technology are neither as complex nor as well guarded, and so their transfer...
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...Does Saving really matter for Growth in Developing Countries? The Case of a Small Open Economy Olajide S. Oladipo, PhD Department of Economics and Finance School of Business, Medgar Evers College 1637 Bedford Avenue, Brooklyn, NY 11225 Email: ooladipo@ mec.cuny.edu Abstract The study employed the Toda and Yamamoto (1995) and Dolado and Lutkepohl (1996) – TYDL- methodology to uncover the direction of causal relationship between savings and economic growth in Nigeria between 1970 and 2006. The empirical results suggest that savings and economic growth are positively cointegrated indicating a stable long run equilibrium relationship. Further, the findings revealed a unidirectional causality between savings and economic growth and the complementary role of FDI in growth. Keywords: Cointegration, FDI, Savings and Economic Growth JEL Classification: C32; E21;O11 Does Saving really matter for Growth in Developing Countries? The Case of a Small Open Economy Introduction The relationship between savings and economic growth has received increased attention in recent years especially in developed and emerging economies [see Bacha (1990), DeGregorio (1992), Levine and Renelt (1992), and Jappelli and Pagano (1994)]. This might not be unconnected to the central underpinning of Lewis’s (1955) traditional development theory that increasing savings would accelerate economic growth. Research efforts by Kaldor (1956) and Samuelson and Modigliani (1966) examined how different savings...
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...consumption-driven development model basically established http://news.hexun.com/2015-04-17/175037256.html The 2015-04-17 00:17:46 source: China business times author: ren-ping li "Consumption rate exceeded 50% for the first time in the past decade, ranking first in the Troika." The 2015 Consumption Market Development Report which is issued by Ministry of Commerce pointed out that the consumption-driven development model will be basically established this year, and the growth rate, structure, hotspots, drive of consumption will change accordingly. Unlike the spokesman of Statistics Bureau Sheng Yun’ opinion that the contribution of consumption to GDP ratio in the first quarter may reach 60%, according to Zhao Ping’s interpretation, who is deputy director of Consumption Economic Research Department of Ministry of Commerce, the full-year contribution ratio of consumption was always used to clarify the status of consumption, which in fact only reflected the proportion of consumption in economic growth, while consumption proportion in the stocking economy has always been low and hovering around 40% for a long time. However, consumption rate, which means the consumption share of GDP, is a more comprehensive measure of the proportion of consumption. Therefore, “consumption rate exceeded 50% for the first time in the past decade with the specific measurement data of 50.5 percent, which means the consumption-driven development model is basically established. ...
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