Development Economics

A more equitable distribution of income may help accelerate growth and promote economic development. Equitable doesn't mean equal distribution of income. It refers to the distribution of income that is 'fair,' but the concept of 'fair' is subjective. Distribution of wealth and income is the way in which the wealth and income of a nation are…

The economic growth of a country is the increase in the market value of the goods and services produced by an economy over time.Economic Growth Definition We define economic growth in an economy by an outward shift in its Production Possibility Curve (PPC). Economic growth is measured by the increase in a country’s total output or real Gross…

Ex-ante strategies prevent or reduce risk like savings. On the other hand ex-post or risk coping strategies mitigate the 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…

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 can…

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 an economy to have…

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 Economies1. Low per capita real income Low per…