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Development Economics

Equitable Distribution of Income

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…
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What is Economic Growth?

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…
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Purchasing Power Parity

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…
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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 an economy to have…
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