Development Economics

risk strategies for farmers
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Risk Strategies for Farmers in Developing Economies

Ex-ante strategies prevent or reduce risk like savings. While ex-post or risk coping strategies cope up with risk like dis-savings. These are two types of risk strategies for farmers to mitigate risk outcome. Factors such as weather, rainfall, pests and diseases hitting crops, irrigation can alleviate some income risk. Aggregate shocks are problems that affect everyone in the village. They are not unique...
Purchasing Power Parity
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Purchasing Power Parity

In Economics, Purchasing Power Parity (PPP) is a theory that says that in the long run (over several decades), the exchange rates between countries should even out so that goods essentially cost the same in both countries. The Purchasing Power Parity theory explains that there should be no arbitrage opportunities (where price differences in countries...
environmental kuznets curve
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The Environmental Kuznets Curve

The Kuznets curve is an inverted U curve, with the Y-axis as inequality and time or per-capita incomes as the X-axis. It is used to graph the hypothesis that as an economy develops, market forces begin to increase and economic inequality decreases. This suggests that as a nation is going through industrialization, and mechanization of...
harrod domar model
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Harrod Domar Model

The Harrod Domar model shows the importance of saving and investment in a developing economy. The model was developed independently by Roy F. Harrod in 1939. The growth of an economy is positively related to its savings ratio and negatively related to the capital output ratio. It suggests that there is no natural reason for...
characteristics of developing economies
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Characteristics of Developing Economies

Even though developing nations have very different backgrounds in terms of resources, history, demography, religion and politics, they still share a few common characteristics. Today, we will go over six common characteristics of developing economies. Common Characteristics of Developing Economies 1. Low per capita real income This is one of the most defining characteristics of...
Equitable Distribution of Income
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Equitable Distribution of Income

Distribution of wealth and income is the way in which the wealth and income of a nation are divided among its population, or the way in which the wealth and income of the world are divided among nations. A more equitable distribution of income may help accelerate growth and promote economic development. Equitable doesn't mean equal...

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