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Indicator of wealth
Resources available
Production & consumption
on environment
Equal distribution of
income
Health and education services
No info abtallocation
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Per capitaNDPmost appropraitemeasure
^ GDP or GNP
Or per capita NDP
^capacityto produce goods and services
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• Economic growth
• Extensive growth by using more resources
• Intensively using same amt of resources
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Michael Todaro – “Economic development is an increase in living
standards improvementin self-esteem needs and freedom from
oppression as well as greater choice”
Quantitative and qualitative changes in economy >>
development of human capital, critical infrastructure, social
inclusion, health, safety
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Appropriate Measure – HDI
Objectives:
1)Increase the availability and widen the distribution of basic
life sustaining goods
2) Raise levels of living by ensuring higher incomes, more jobs
and greater attention to culture
3) Expand the range of economic and social choices
INDIVIDUALS AND NATIONS
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Complex process
National Income & Per capita income:
traditional approach
World bank – per capita Gross National Income
World bank report – low income, middle income, low middle
income, upper middle income, high income
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Official exchange rate is used in international comparison of
GNI
Not a correct view for 2 reasons
A. PPP of a country ignored
B. Official exchange rate does not reflect the value of
non-traded goods
How to overcome?? IB Karvis and others “International
comparisons of real product and purchasing power” >> UN
international comparison program gave PPP method
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Physical Quality of Life Index (PQLI)
First attempt twds providing comprehensive measure of economic
development.
Developed by David Morris
Avg of 3 values- life expectancy, basic literacy rate and infant
mortality rate
Each value was scaled on 1 to 100
1 > worst 100> best
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UNDP
First Human development Report(HDR) – Mahbub ulhaq
Process of widening people’s choices & rising the level of
well being achieved
Essential components – equity, sustainability, productivity and
empowerment
Measures avg achievements – long and healthy life, access to
knowledge, decent standard of living
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Adjusts HDI for inequlaities in different dimensions
Discounting each dimension’s avg value acc. to level of
inquality
IHDI = HDI >> no inequality across people
IDI < HDI >> inequality rises
Diff b/n HDI and IHDI – loss in potential HD due to
ineuality
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GENDER INEQUALITY INDEX
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GENUINE PROGRESS INDICATOR
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HUMAN SUSTAINABLE DEVELOPMENT INDEX
Overall quality of
life
4th paramterto existing
HDI
Per-capita carbon
emission
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Index if economic growth with the environmental consequencesof
that growth factored in
