IB 3101 Lecture Notes - Lecture 3: Pest Analysis, Gender Development Index, Gross National Income

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Published on 19 Mar 2017
Week 3- Chapter 2 continued- Political Economy and Economic Development
Gross national income per person
Measures total annual income received by residents or citizens of a nation
Gross national income per person, purchasing power parity
Adjusts for cost of living standard in each country
Good to adjust and compare countries to the USA
Ex. in China can buy 3,650 worth of goods equals USA 6,890 worth of goods
GDP Growth Rate
Good to look at future of economy
High GDP shows very profitable to invest in because growing economy
Institutions: Cause and Effects
Property rights
Rule of law
Free press
Honest gov’t, courts, police
Open markets
Countries have different institutions
Education levels
Determinants of Economic Growth
Amartya Sen argues economic development should expand the real freedoms
that people experience
o What opportunities and capabilities people enjoy
o Economic freedom
o Political freedom
Democratization of political communities give citizens a voice
Developed human development index (HDI)
o Life expectancy at birth
o Educational attainment
o Whether average incomes are sufficient to meet basic needs
Index = 0 to 1
o 0 - .5 = poor human development
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