Development Economics

Development Economics is the branch of economics that deals with the development process of low-income areas. It focuses on economic growth and the structural changes to support the growth, as well as improving public welfare. For a short lesson on Development Economics:

Development Economics

 

Development Economics

●Branch of economics
●Development process of low-income areas
●Economic growth and structural changes
●Improve public welfare
●Applied at domestic or international level
●Political and social considerations
●Normative economics

Systems of Development

●Mercantilism
●Nationalism
●Linear Stage of Growth Model
●Structural Change
●International Dependence
●Neoclassical

Mercantilism

●Prosperity depends on capital supply
●Higher exports than imports
●Protectionist measures
●Colonialism
●Production and exports

Nationalism

●Deemphasis on colonies
●Domestic Production
●Similar to mercantilism

Linear Stage of Growth Model

●The Stages of Growth: A Non-Communist Manifesto
●Accumulation of capital
●Savings as investments to support growth
●Traditional society
● Pre-conditions for take-off
● Take-off
● Drive to maturity
● Age of high mass-consumption
Structural Change
●Advancing past agricultural society
●Developing urban centers
●More service industry based economies
●Labor surplus used to fuel changes
International Dependence
●Origins in developed nations
●Dominant nations hold back lesser nations
●Try to maintain dominant position
●Neocolonialism
Neoclassical
●Free market based
●Free market allocates resources efficiently
●Limited government when possible

Applications of Development Economics

●Consulting with World Bank and IMF
●Policies used to promote self reliance
●Measuring GDP in developing nations
Limitations
●Accurate GDP measures from poor nations
●Other measures of progress
Well Known Development Economists
●Joseph Stiglitz- Nobel Prize winner
●AmartyaSen- Nobel Prize winner