IB Economics Sara Shackett Economic Development IB Economics Sara Shackett http://www.unfpa.org/pds/mapping.htm

How many people out of 10 have electricity at home?

How many children out of 10 are vaccinated against measles?

How many girls out of 10 go to primary school?

Growth v. Development Military Equipment Health Care

Economic Growth Charades You and one partner will consider the sources of economic growth. Draw a charade card and decide how you can best act out the source of economic growth using no words or props. You get one point for each team that correctly identifies your source. You also get one point for each source you identify correctly. Good luck!

Consequences of growth

Consequences of growth Higher incomes Consequences of growth

SRAS AD Y rGDP PL PL1 PL AD1 Y1

Consequences of growth Improved economic indicators of welfare Higher incomes Consequences of growth

Consequences of growth Higher government revenues Improved economic indicators of welfare Higher incomes Consequences of growth

Consequences of growth Creation of inequality Consequences of growth

The Lorenz Curve

Consequences of growth “uneconomic growth” Negative externalities, lack of sustainability Creation of inequality Consequences of growth

Negative externalities of production Price of paint ($) Quantity of paint (liters) Q MSC MSB P1 Q1 Negative externality Welfare loss MPC P

Growth v. Development Military Equipment Health Care

Common characteristics of developing countries Low standards of living, characterized by low incomes, inequality, poor health, and inadequate education Common characteristics of developing countries

GDP/capita on a purchasing power parity, 2014 (CIA World Fact Book) 

Source: Dale DeBoer, UCCS

2013 HDI data from UNDP

Common characteristics of developing countries Low levels of productivity (output per person) Common characteristics of developing countries

Common characteristics of developing countries High rates of population growth and dependency burdens Common characteristics of developing countries

Dependency Ratio Dependency ratio = Australia 20.3 10.7 69.0 0.45 US (% of population under 15) + (% of population over 64) (% of population 15 to 64) Country % under 15 % over 64 % 15-64 Dep Ratio Australia 20.3 10.7 69.0 0.45 US 21.1 68.2 0.47 Burkina Faso 47.7 2.3 50.0 1.00 Laos 41.7 2.9 55.4 0.81 Cambodia 38.3 2.8 58.9 0.70 World Bank stats

Common characteristics of developing countries Substantial dependence on agricultural production and primary product exports Common characteristics of developing countries

Common characteristics of developing countries Prevalence of imperfect markets and limited information Common characteristics of developing countries

Common characteristics of developing countries Dominance, dependence, and vulnerability in international relations Common characteristics of developing countries

Common characteristics of developing countries High and rising levels of unemployment and underemployment Common characteristics of developing countries

Diversity among developing countries Resource endowment Diversity among developing countries

Diversity among developing countries Historical background Diversity among developing countries

Diversity among developing countries Geographic and demographic factors Diversity among developing countries

Diversity among developing countries Ethnic and religious breakdown Diversity among developing countries

Diversity among developing countries The structure of industry Diversity among developing countries

Diversity among developing countries *Resource rich countries Per capita income levels Diversity among developing countries

Diversity among developing countries Political structure Diversity among developing countries

Hans Rosling’s Best Stats