hand out 3 Flashcards
(24 cards)
What is the difference between linear stages and international dependency models?
Linear stages: underdevelopment is due to lack of savings/investment. Dependency model: underdevelopment is caused by external exploitation (poor keep being dependend on the rich)
.
Why is the debate between dependency and neoclassical schools called ‘finger pointing’?
Dependency school blames developed countries, neoclassical school blames developing countries for underdevelopment.
What are the advantages and disadvantages of structural change, growth models?
Explains economic transformation, highlights sectoral shifts, guides policy, focuses on internal development.
Ignores external factors, assumes smooth transition, overlooks political barriers, not one-size-fits-all.
What is a key criticism of Rostow’s stages of economic growth?
Fails to consider external constraints, assumes savings alone drive growth, and has counterexamples like Argentina.
What are the two sectors in the Lewis Model?
Traditional agricultural sector and modern industrial sector.
What happens to surplus labor in the Lewis Model?
It is absorbed by the industrial sector, increasing productivity and economic growth.
What is the primary source of growth in the Lewis Model?
Transfer of labor from agriculture to industry.
How does the Lewis Model explain economic development?
Shift from low-productivity agriculture to high-productivity industry leads to growth.
What is the role of wages in the Lewis Model?
Industrial wages remain stable initially due to labor surplus, encouraging industrial expansion.
What are the center and periphery in dependency theory?
Center: developed countries, Periphery: developing countries dependent on the center.
Does the false-paradigm model claim the World Bank deliberately harms development?
Not necessarily; suggests misguided policies may unintentionally hinder growth.
What are major structural changes emphasized in development?
Shifts in industry, institutions, and economic structure within a country.
What is the ‘idea gap’ in development economics?
Developing countries lack knowledge and innovation compared to developed ones.
What are the key features of the Harrod-Domar model?
Emphasizes savings, investment, and a fixed capital-output ratio as drivers of growth.
What is the Harrod-Domar model’s main growth source?
Investment and capital accumulation.
Why is the Harrod-Domar model limited for developing countries?
Assumes capital alone drives growth, ignores institutions, policies, and structural changes.
What is the Malthusian Trap?
Population growth outpaces resource growth, keeping per capita income stagnant.
What are the dimensions of technological progress?
More output per input, better/new products, and increased variety of goods.
What are fertility and appropriability in research?
Fertility: how many ideas research generates. Appropriability: how much firms benefit from research.
What is the Solow residual?
Growth unexplained by labor and capital, often attributed to technological progress.
What is the difference between the Solow and endogenous growth models?
Solow: technology is external. Endogenous: technology results from investment in human capital and R&D.
What is knowledge spillover in growth models?
One firm’s innovation benefits others, driving overall economic growth.
What is the role of human capital in the endogenous growth model?
Investment in education and skills drives technological progress and long-term growth.
What policy implications come from the endogenous growth model?
Policies supporting education, R&D, and innovation boost economic growth.
