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Chapter Seventeen: How Economies Grow and Develop

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  • Slide 1
  • Chapter Seventeen: How Economies Grow and Develop
  • Slide 2
  • Development and Economic Growth
  • Slide 3
  • Inflation rate () Output (Y ) AS 0 AS 1 Expanded maximum capacity AD 0 AD 1 Figure 17.1: Economic Growth in the AS/AD Model
  • Slide 4
  • Bolivia0.5% Brazil1.0% Chile3.2% Colombia1.6% Ecuador0.8% Mexico0.7% Peru1.1% Venezuela-0.2% Middle Income3.5% Table 17.1: Per Capita Annual Real GDP Growth in Select Latin American Countries, 1980-2010 (%) Source: World Bank, World Development Indicators Database, 2013
  • Slide 5
  • Country Growth Experiences
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  • Figure 17.2: World Economic Growth, 1971-2011 Source: World Bank, World Development Indicators Database 2013
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  • Table 17.2: Income, Growth, and Population Comparisons, Selected Countries and Country Groups Country or Category GDP per Capita, 2011 (PPP, 2005, US $s) Percent Growth in GDP per Capita (PPP, Annual Average, 1990- 2011) Percent of World Population (2011) High Income 33,5661.5%16.3% Hong Kong 44,6403.0%0.1% United States 42,4861.4%4.5% Japan 30,6600.7%1.8% France 29,8191.0%0.9% South Korea 27,5414.3%0.7% Middle Income 6,2453.5%72.0% Russia 14,8210.8%2.0% Turkey 13,4682.5%0.8% Brazil 10,2791.7%2.8% China 7,4189.5%19.3% India 3,2034.7%17.8% Low Income 1,1821.9%11.7% Bangladesh 1,5693.6%2.2% Nepal 1,1062.1%0.3% Haiti 1,034-1.4%0.1% Ethiopia 9792.8%1.2% Congo, DR 329-3.0%1.0% Source: World Bank, World Development Indicators Database, 2013. * Data for Haiti growth rate is for 19912011.
  • Slide 8
  • Figure 17.3: GDP per Capita in 2011 (in constant 2005 PPP $ per person) Source: World Bank, World Development Indicators Database, 2012
  • Slide 9
  • South Korea Botswana China India GDP per capita, PPP Percent of High-Income GDP Figure 17.4a: Per Capita GDP Expressed as a Percentage of per-Capita GDP in High-Income Countries Source: World Bank, World Development Indicators Database, 2013
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  • GDP per capita, PPP Percent of High-Income GDP Figure 17.4b Source: World Bank, World Development Indicators Database, 2013
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  • Figure 17.5: Growth and Income Relationship with Area Proportional to Population Source: World Bank, World Development Indicators Database, 2013
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  • Table 17.3: Growth Rates and Changes in Poverty Rates, Select Countries Period Annual Growth Rate in per Capita GDP, % Poverty Rate at Beginning of Period, % Poverty Rate at End of Period, % Bangladesh1984-20102.960.643.3 Brazil1981-20091.113.66.1 China1981-20099.184.011.8 Egypt1991-20082.94.51.7 Ethiopia1982-20111.866.230.7 India1978-20103.965.932.7 Indonesia1984-20103.662.818.1 Mexico1984-20100.812.80.7 Nigeria1986-20102.353.968.0 Philippines1985-20091.634.918.4 South Africa1993-20091.524.313.8 Thailand1981-20104.222.00.4 Source: World Bank, World Development Indicators Database, 2013. Note: The poverty rate is based on a poverty line of $1.25 per day.
  • Slide 13
  • Inequality
  • Slide 14
  • Top 20%: 82.8% of world income Next 20%: 9.9% of world income Third 20%: 4.2% of world income Fourth 20%: 2.1% of world income Poorest 20%: 1.0% of world income Figure 17.6: The Unequal Distribution of the Worlds Income, 2007 Source: I. Ortiz and M. Cummings, Global Inequality: Beyond the Bottom Billion, UNICEF Social and Economic Policy Working Paper, April 2011.
  • Slide 15
  • Top 10 Percent Top 1 Percent Figure 17.7: Shares of U.S. Income Going to Top 10 Percent and Top 1 percent, 1920-2012 Source: Thomas Pickett and Emmanuel Saez U.S. incomes series, http://elsa.berkeley.edu/~saez/TabFig2012prel.xls
  • Slide 16
  • Figure 17.8: The Relation Between Life Expectancy and Income, with Area Proportional to Population Source: World Bank, World Development Indicators Database, 2013