Perkins Text PP Notes Modified by Professor Sisay AsefaPart OneChapter 1Chapter 1: Outline2. Rich and Poor Countries: There is more between rich & poor3. Growth and Development4. A Development Continuium5. A Glance at HistoryApproaches to DevelopmentFig. 1.1Fig. 1.2Fig. 1.3Fig. 1.4End Chapter 1Country StudiesIdentification &Paired-ConceptsLecture Summary I.Three stories Ethiopia, Malaysia & UkraineChapter 1 Summary Development Economics TermsIII.Economic Growth & Economic developmentMeasuring Diversities of Developing EconomiesV. Different Historical ExperiencesVI.Economic Development DefinedVI. Economic Development & Economic GrowthStudying Economic DevelopmentPerkins Text PP Notes Modified by Professor Sisay AsefaEconomics ofDevelopmentProfessor Sisay AsefabyDwight H. PerkinsSteven RadeletDavid L. LindauerSIXTH EDITIONPART ONEDevelopmentand GrowthChapter 1Patterns ofDevelopmentNorton Media LibraryDwight H. PerkinsSteven RadeletDavid L. LindauerChapter 1: Outline•1. Three Vignettes (3 contrasting stories about livelihood change in …. •A. Malaysia•B. Ethiopia•C. Ukraine•D. Development & Globalization2. Rich and Poor Countries: There is more between rich & poor•Learn Terminology abut different stages of County level of development based on Income•Developed vs developing or less developed (LDCs)= Low income Countries(LICs) lower middle income (LMIC), upper middle income (UMIC), high income (HIC), newly industrialized or OECD countries, third world, North vs South.3. Growth and Development•Growth is not the same as Development•Development = Economic Growth + structural change involving participation of people in the economy.•A Key feature of economic growth is that modern economic Growth that involves the application of Science and Technology for human progress (Simon Kuznets view)4. A Development Continuium•Developing country covers a diverse group of African and other developing economies in Asia, Latin America, Caribbean, etc...•Income per capital is a key indicator of development but, limited.•One limitation is the international comparison requires converting country currency into a common currency•A more accurate method is Purchasing Power Parity compared to using simple exchange rates conversion.•Other methods include using physical measures of wellbeing such as Energy Use, life Expectancy, Adult Literacy, Proportion of rural population, etc.• See Figures 1.1 to 1.4 carefully5. A Glance at History•A. Multiple Paths to Development across the World nations based on different historical & colonial experiences for Africa, Latin America, & Asia.•B. Diversity in Development Achievements• But, there is also common features or goals of desire for education, developed institutions, self-government, cultural identity & pride, etcApproaches to Development•Development is a complex and multi-dimensional process that can be understood by combining the undertanding of economics, empirical analysis, and institutions and politics as well as culture•Development is foremost a process about people involving mobilization of inputs, the role of trade, sectors including the role of government in human development. It is multi-disciplinary.This concludes the Norton Media LibrarySlide Set for Chapter 1W. W. Norton & CompanyIndependent and Employee-OwnedEconomics ofDevelopmentSIXTH EDITIONByDwight H. Perkins Steven RadeletDavid L. LindauerCountry Studies•Look up selected African countries in annual publications such as the World Development Report (World Bank) & Human Development Report ( UNDP)Identification &Paired-ConceptsNote: Explain the meaning and the relationships, if any•Economic Growth & Economic Development• Modern Economic Growth & Modernization•North & South•GDP and per capita income•World Bank , OECD•Industrialization, Urbanization•Substitutes, LDCS•Institutions, Economic DevelopmentLecture Summary I.Three stories Ethiopia, Malaysia & Ukraine•I. Your book opens with three vignettes: one of Rachmina Abdullah, a young Malaysian woman; another of Getachew, a young Ethiopian man; and one of Viktor and Yulia from Ukraine. •These three contrasting stories reflect the profound economic and social changes under way in developing countries, affecting billions of poor people throughout the world. These examples, are aimed to to help students understand the economic forces underlying the historic changes in the world economy and how economic policies influence the changes for better or worse. Introduction of the concept of globalization and broadly describing its effect on developing countries.Chapter 1 SummaryDevelopment Economics Terms•II. The first step is to introduce terminology distinguishing different stages of development. Some basic terms include developing versus developed countries; less-developed countries (LDCs); low-income, lower-middle-income, upper-middle-income, and high-income countries; industrial or OECD coun tries; transitional (postsocialist) economies; newly industrializing countries; third world; and North versus South.III.Economic Growth & Economic development• Economic development is not synonymous with economic growth. Beyond rising income per capita, development also entails basic structural changes and wide participation of the people of each country.• A key ingredient in what Simon Kuznets called the epoch of modern economic growth is the application of science to achieve increased production.Measuring Diversities of Developing Economies•The label developing country covers a diverse group of economies spanning a wide continuum of conditions. Income per capita remains the most useful single indicator of development, although it is far from ideal. •One limitation is that international comparisons require the conversion of national statistics into common currency units, usually U.S. dollars.• A more accurate method uses purchasing power parity (PPP) calculations. This method shows that income differences between rich and poor countries are less acute than one finds in statistics based on exchange rates. •Other than income, an alternative comparison method is to use physical measures of structural change. Examples in the text include energy consumption, rural population, life expectancy, and female adult literacy.V. Different Historical Experiences •Different historical experiences imply different trajectories for Asia, Latin America, and Africa. •Countries with the greatest potential