Emerging and developing economies: measures of development Microeconomics Topic 1: The Economic Problem Emerging and developing economies: measures of development

Microeconomics Topic 1: The Economic Problem 4.3.1 Unit content Students should be able to: Define the three dimensions of the Human Development Index, HDI, (education, health and living standards) and explain how they are measured and combined Assess the advantages and limitations of HDI in making comparisons between countries and over time Interpret and use other measures of development such as the % of adult males working in agriculture

Macroeconomic measurements recap from 2.1.1 The main methods of measuring national economic performance are

Bobby Kennedy and GDP (1968): take notes

HDI definition The United Nations calculates a measure of economic development called the Human Development Index. This is based on three indicators of development: Longevity Education Income It uses these to create an overall score between 0 (low) and 1 (high), the higher the value the __________ the level of development.

Longevity, education and income Longevity refers to average _____________________ So this measure is a measure of the health of the population. Education attainment looks at ___________ years of schooling for an adult aged __ and expected years of schooling for a _________________ child Income Index refers to the standard of ________ as measured by real ___ per capita at purchasing power parities. So this measure is looking at living standards.

GDP, GNI and GNP recap from 2.1.1 What is gross domestic product (GDP)? GDP does not include earnings by its ________ while __________ of the country. Gross National Income (GNI) is GDP plus income paid into the country by other _________ for such things as interest and dividends. Gross National Product (GNP) is GDP plus income that residents have received from_________, minus ________ claimed by non-residents. abroad, countries, income, outside, residents

HDI examples

Limitations of using HDI to compare countries Microeconomics Topic 1: The Economic Problem Limitations of using HDI to compare countries

Advantages of using HDI to compare countries

Other measures: the inequality-adjusted HDI (IHDI) Introduced in 2010 IHDI is HDI adjusted for ___________ in the distribution of achievements in each dimension of the HDI (health, education and __________) IHDI = HDI value when there is _____ inequality But IHDI < HDI value as inequality ______ The difference between the HDI and the IHDI represents the ‘loss’ in potential _________ development due to inequality and can be expressed as a percentage. human, income, inequalities, no, rises

Other measures: the multi-dimensional poverty index (MPI) This identifies deprivations across the three HDI dimensions (health, __________ and standard of living). It shows the __________ of people who are multi-dimensionally _______ (suffering deprivations in 33% of _________ indicators) and the number of deprivations with which poor households typically contend. It can be deconstructed by_______, ethnicity and other groupings as well as by dimension, making it a useful tool for policymakers. education, number, poor, region, weighted

Other measures to compare countries

Why might a measure such as the % working in agriculture be useful?