POLI 227 Lecture Notes - Lecture 4: Comparative Advantage, Human Capital

• School: McGill University
• Department: Political Science
• Course: POLI 227
• Professor: Daniel Douek

Document Summary

Raw materials" price tend to not keep pace with manufacture d goods" prices in the long term; this means developing countries need to produce more to keep up revenue. Raw materials (i. e. coffee, oil) are subject to broad price fluctuations due to factors beyon the producers" control. In 2015, primary commodities lost nearly 1/3 of their purchasing power relative to manufactures. Falling oil prices, in particular, have hit oil producing countries hard. Notion that your economy becomes incredibly vulnerable if it is reliant on the expo raw materials. Gained it"s independence in 1964 from the uk. For the first ten years of independence, the global copper boom made zambia a middle- income country. By the early 1970s, copper prices started to drop dramatically, and zambia found itself in economic crisis by the 1980s (experiencing relative stability) Beginning in the early 2000s, rising chinese demand for copper boosted zambia"s econom again.