ECONOMIC DEVELOPMENT (ECON 225)
OVERVIE
W
OF CHAPTER 2
ECONOMI
2.1 INTRODUCTION
DEVELOP
MENT
ECONOMI
THROUGH THE EYES OF EAST ASIA
CS
Among other continents, East Asia can provide a fertile ground
when we talk about economic development issues.
It has achieved a dynamic economic growth and development
throughout the postwar period. This rapid development and
growth continued despite several economic crises that followed,
both in the region and around the globe. The economic
resiliency of these countries marked the region as an “Economic
Miracle”.
The industrialization experiences of Japan and these Asian
“tigers” formed the basis of the “East Asian Development
Model”, which has now become accepted part of the economic
development literature. Recent studies have used this model to
characterize the growth and development in the neighboring
ASEAN economies and China.
What did they do to have such resilient economies?
ECON 225
TOPI 2.1 Introduction
2.2 How is development economics distinct from other
CS aspects of economics?
2.3 Measuring growth and development
2.4 New approaches to measuring economic development
2.4.1 The Human Development Index (HDI)
2.4.2 Healthy life expectancy
2.4.3 Green GNP
2.5 Making comparisons between countries
2.5.1 Exchange rate method
2.5.2 PPP Method
2.6 Summary
2.2 How is Development Economics
Distinct from Other Aspects of
Economics?
DISTINCT It is the study of how
ION OF to improve economic
conditions in
DEVELOP developing countries.
It focuses on improving
MENT the standard of living
ECONOMI
for people in these
countries.
CS
Focus on Low Income Economies
It concentrates on economies with low per
2.2 How is Development Economics capita incomes, differentiating it from the
Distinct from Other Aspects of study of industrialized economies.
Economics?
Learning from Industrialized
While development economics focuses on
Economies
DISTINCT
low-income countries, it acknowledges the
relevance of industrial countries'
experiences in analyzing economic growth.
ION OF Application of Diverse Economic Tools
interdisciplinary field that draws upon
DEVELOP various branches of economics, including
growth theory, macroeconomics,
MENT
microeconomics, labor economics, and
more.
ECONOMI
Long-Term Perspective
Long-term focus of development
economics, emphasizing its concern with
CS
sustainable development, human capital
development, and environmental
sustainability.
2.2 How is Development Economics Address Market Failures
Distinct from Other Aspects of Directly addresses market failures, exploring
Economics? solutions to mitigate their negative impacts
and strengthen institutions for sustainable
growth.
DISTINCT
ION OF
Focus on Inequality
prioritizes reducing inequality, recognizing
its detrimental effects on social cohesion
DEVELOP and long-term growth.
MENT Policy Relevance
strongly policy-oriented, informing policy
ECONOMI recommendations through rigorous
research and collaboration with
CS
governments and organizations to improve
lives in low-income countries.
2.3 Measuring Growth and
Development
ECONOMI the increase in the production of Goods and
C
Services
GROWTH
ECONOMI is an economic growth accompanied with
positive changes in socio economic structure
C of a country
DEVELOP
KEY
DIFFERENC
E ECONOMIC GROWTH ECONOMIC DEVELOPMENT
Human Development Index(HDI)
Gross Domestic Product(GDP)
MEASURED BY Healthy Life Expectancy
Gross National Product(GNP)
Green GNP
Better living standards and social
FOCUS More production and higher income
progress
TIMEFRAME Short-term Long-term
NEW APPROACHES
TO MEASURING
ECONOMIC
1. THE HUMAN DEVELOPMENT INDEX ( HDI) 2. HEALTHY LIFE EXPECTANCY 3. GREEN GNP
1990.
DEVELOPMENT
- developed by the UNITED NATIONS
DEVELOPMENT PROGRAM (UNDP) in the late
1980s and has been publishing it since
- A measure used by the World Health
Organization (WHO) summarizes the
expected number of years to be lived in
"full health." The years of ill-health are
weighted according to severity and
- Green GNP is the informal name given to
national income measures that are adjusted to
take into accountis the
A presentation
resources
delivered(both
and
renewable
in front
envi ronmental
conveying
depletion
a formal talk, ofoften
natural
and non-renewable)
of an audience,
degradation.
information,
aimed at
persuading others,
- This index has 3 components: PER-CAPITA or sharing insights on a particular topic.
subtracted from the overall life
INCOME, LIFE EXPECTANCY AT BIRTH, - The types of can
Presentations adjustments made
take various to standard
forms, such
AND LEVEL OF EDUCATIONAL expectancy rate to give the equivalent GNP as wouldverbal
includespeeches,
the cost of slideshows,
exploiting a
ATTAINMENT that combines adult literacy years of healthy life. demonstrations,
natural resource andor valuing
multimedia displays.
the social cost of
and educational enrolment rates. They are
pollution commonlyDamages
émissions. used in to academic,
the global
- A high health life expectancy suggests professional, such
environment, and associal
globalsettings
warmingto and
- The HDI is a valuable tool for policymakers that a country has a strong healthcare communicate
depletion of theideas,
ozone proposals, reports,also
layer, should or be
findings. Effective presentations typically
and development experts. It helps them system, good living conditions, and low deducted; but these damages are hard to
involve careful planning, organization, and
understand where a country stands in terms levels of poverty. It also indicates that estimate.
delivery techniques to engage the audience
of human development and identify areas people are able to live productive and and effectively convey the intended
that need improvement. It also encourages - Itmessage.
is a powerful tool for promoting sustainable
fulfilling lives.
countries to focus on policies that promote development. It encourages countries to adopt
social progress and well-being, not just policies that reduce environmental damage and
economic growth. promote economic growth that doesn't come at
the expense of the planet.
2.5 Making comparisons between
countries Exchange Rate
Method
This method converts a country’s GDP into U.S.
MAKING
dollars using the exchange rate between its local
currency and the U.S. dollar. This method shows
the GDP and GDP per capita in U.S. dollars but
only reflects the prices of traded goods, not the
COMPARI
overall cost of living in a country.
SONS Purchasing Power Parity (PPP)
Method
BETWEE
This method compares the cost of a “basket” of
goods and services in a country to the cost of the
same basket in the U.S. It calculates how much
of the country’s currency is needed to buy what
N $1 can buy in the U.S. Economists prefer this
method because it includes both traded and non-
traded goods, which are usually cheaper in
COUNTRI
developing countries, giving a more accurate
picture of living standards.
2.6 SUMMARY
SUMMA
RY
01
Economic development is a special field of economics
which concentrates on the study of countries which
are in the process of moving upward from low levels
of income, and social progress.
It is important to take note that there are two popular
ways to compare levels of income. The exchange rate
method has the advantage of simplicity and ease of
02 calculation. The PPP Method, while more costly to
calculate and maintain over time, is a better measure
of relative living standards since it is unaffected by
exchange rate fluctuations and includes all the goods
produced rather than traded goods only.
ECON 225
GROUP 2
Dhea Hannah Mae Eric Vincent Clarie Jane Cortes
Idahan Diabordo Sagmon Quevedo
END OF
THANK
SLIDES
YOU
