Lecture Block 4 Flashcards
(37 cards)
Name the 4 Pillars that cause growth
1) Infrastructural investment
2) Technical Change
3) Human Capital
4) Policy and social Capital
Give 3 reasons why was variation in growth levels between countries
1) Varying levels of trade and exports
2) some countries suffered with no export booms
3) Richer countries had more factors of production and varying levels of tech
The global economy fluctuated a lot from 1850-1900, why?
Industrialisation, post and interwar period. The beginning of globalisation.
What were the variations in policy during the global economy era?
1) Policy makers came to the conclusion that the free market was the best
2) In 1914-1945 Market was relatively free
What were the institutional variances between rich and poor countries.
1) Stronger Property rights for rich countries
2) Property rights in relation to colonial history, longer stay is equated to better property rights.
3) We can see this variation due to comparison of income and mortality
What diagram an we use to make comparison between the rich and poor countries in the world
1) The production function, showing output with respect to labour and capital Y=F(K,L)
2) we measure wealth and income by using this function
What are the 3 pillars to the new growth theory
1) add more factors of production such as human capital
2) Make technical process internal to factors of production
3) Human capital can greatly increase leverage and increase returns
Describe the process of human capital in the new growth
1) Traded in imperfect Markets
2) difficult access normally to Capital markets in LEDCs
3) Understatements in H caused individuals believing they wanted other factors of production
After LED’s realised Human capital wasn’t suitable for economic growth what type of capital did they turn to
Social Capital
What is the production function with social Cap and human cap added
Y=F(L,K,H,S)
What factors caused increases in output
1) Higher levels of education
2) better policies
How does education increase output
1) Increases H and a source of increasing returns
2) Tony Blair 1997 E E E
How do policies increase output
1) Facilitate growth of human capital by scholarships
2) Reducing inflation variance to around 2%
3) Compensating for market failures
4) reducing the risk on insurance
5) Increase Social Capital,Human Capital
What are some reasons why rich countries are richer
- More Cap and infrastructure spending
- faster tech progress
- investment into education
- better policies
- better social networks
- better institutions
What is the second approach to growth theory
Historical approach
Three Historians who studied the difference between the rich and the poor
1) Gerschenkon 1950’s
2) Clang
3) Karl Marx
Describe Gerschenkon discoveries
1) earlier industrialised countries had:
- More Capital intensive projects
- Monopolistic production
- Higher tariffs
Describe Clangs discoveries
1) development doesn’t spread rapidly due to multi national corporations. they keep diffusion tech and machine tech knowledge to themselves.
Name 4 factors of production stimulating GDP growth
- Physical C
- Human A
- Social P
- Policies and institutions
Name 2 factors increasing the well being between countries
1) political relations
2) L and K spreading
What were Karl Marx’s discoveries
Production being driven via labour due to more capital exploiting workers leading to ‘World of workers unite’
Give an example of a workers rebellion
Decembertis in Russia 1825
How do trade terms between the north and south differ
- North South divide with the Brenton report
- Exploitation by TNCs posting up in LEDCs extracting resources as well as taking profits back to the north
- Commodities traded in the North for higher prices as the markets are more competitive
- Industrial goods traded in North
Give two examples of rebellions in 2 countries which aimed to see the positive progression of the economy and well being continuously.
Scotland and Ireland in the 19C
