ECON 6280 Study Guide - Midterm Guide: Exchange Rate, Poverty Trap, Extreme Poverty
Document Summary
Economic development process of improving all human lives and capabilities through raising people"s level of economy. Libertarianism expand political liberties: criticism but people might value materialistic gains even more (e. g. india sees china doing well economically and try to follow their model although india is democratic) Capabilities freedom to achieve what a person deems to be a worthwhile life. Exchange rate prices that depend on traded goods and service: non-traded goods and services are much cheaper in developing countries, method: use exchange rates to express income in a common unit (e. g. usd$) Ppp method expenditure on an item by multiplying quantity by price. Hdi human development index composition of 3 indicators (income, life expectancy, education: better measure of development than gdp/capita, but more complicated to explain and arbitrary. Nhdi new hdi geometric mean for 3 indicators of hdi: uses gni rather than gdp, which gives a better measure of economic welfare since it includes remittances.
