Bài giảng MicroEconomics - Chapter 39W: The Economics of Developing Countries

The Economics of Developing CountriesMcGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.ClassificationsIndustrially advanced countriesHigh income nationsWell-developed market economiesPer capita income $37,665 in 2008Developing countriesMiddle income nations Low income nationsWide variation in income per capitaLO139W-2Classifications39W-3ComparisonsU.S. GDP $14.6 trillionCombined GDP of DVCs $15.6 trillionU.S. has 4.5% of population but produces 25.1% of world’s outputU.S. per capita GDP is 150 times that of Sierra LeoneWalmart’s annual revenue is greater than all but 23 nations’ GDPLO139W-4Growth, Decline and Income GapsSome developing countries have grown considerablyChina, Malaysia, Chile, ThailandSome developing countries have become high-incomeSingapore, Greece, Hong KongIncome gap has widenedDeveloping countries must grow faster to reduce the gapLO139W-5Human Realities of PovertyLO2Selected Socioeconomic Indicators of Development39W-6The path to economic developmentUse existing resources more efficientlyExpand available supplies of resourcesSimple generalizations are not possibleLO2Obstacles to Development39W-7Obstacles to DevelopmentNatural ResourcesShortage of land, resources, powerTropical climates hinder labor, lead to diseaseDifficult to solveLO239W-8Obstacles to DevelopmentHuman resourcesLarge populations Reduced standard of living Less saving and investment Lower productivity Overuse of land resources Urban problems QualificationsUnemployment and underemployment LO239W-9Obstacles to DevelopmentCapital accumulationThis is key for economic developmentDomestic capital formationSavings potentialCapital flightInvestment obstaclesLack of infrastructureLO239W-10Technological advanceBorrowed technologySocio-cultural obstaclesInstitutional obstaclesLand reformObstacles to DevelopmentLO239W-11The Vicious Circle of PovertyRAPIDPOPULATIONGROWTHLOW LEVELOF DEMANDLOWPRODUCTIVITYLOW LEVELS OFINVESTMENT INPHYSICAL ANDHUMAN CAPITALLOWPER CAPITAINCOMELO3LOW LEVELOF SAVING39W-12Role of GovernmentA positive roleEstablishing the rule of lawBuilding infrastructureEmbracing globalizationBuilding human capitalPromoting entrepreneurshipDeveloping credit systemsControlling population growthMaking peace with neighborsLO439W-13Role of GovernmentPublic sector problemsMisadministrationBriberyCorruptionLO439W-14Role of GovernmentLO439W-15Expanding tradeAdmitting temporary workersDiscouraging arms salesForeign aidDirect aidThe World Bank groupLO5Role of Advanced Nations39W-16