1Thomas Malthus
"dismal science" and married at 38
-Real income and the birth rate move in the same direction
-There are diminishing returns to adding more workers to the land.
-Real income and the birth rate move in the same direction.
2Malthusian Trap
innovation cant bring sustained economic growth, it only allows the population to become larger
3Demographic Transition
stage 1: stable,high
stage 2: death rate falls
stage 3: birth rate falls
stage 4:stable, low
4Dependency Ratios
non-working age to working age populations
5For all normal goods,
the income effect is positive (have more children)
6The substitution effect is negative,
higher prices means lesser children
7Rule of 70
70 divided by a percent
8Theodore Schultz
imagine the united states with its current land and physical capital but no person has any schooling or on-the-job training
an average life span of forty years (due to poor health)
9Developing countries differed industrial countries not only by physical capital per worker,
but also in human capital per worker
10Human capital lets us distiguish between
quantity and quality of the population
Example:Education, which has explicit and implicit costs
11Discounting to present value
($)/((1+r)^(t))
12Net Present Value
PV (returns) - PV (costs) = Net PV
13The social rate or returns include
external benefits of education and costs of education subsidized by the government
14The returns of cognitive skills are higher in
low income countries than high income
investments in education and technology is complementary
15Costs of AIDS pandemic.
Healthcare expenditure for doctors, nurses, medicines, and hospitals (explicit costs)
lost output due to illness and death (implicit costs)
suffering and grief (physic costs)
16Advance Market Commitments
created a market for vaccines
17Productivity increases agriculture in rural areas which is the only source of labor resources for expanding
manufacturing and service industries
18As income rises, people spend less of their income on food which is part of
agriculture, the demand is low
19Grain yields in developing countries are rising, but cereal(rice) yields are
falling
20Green Revolution
higher yielding varieties of rice and more education, irrigation, application of fertilizers, herbicides, and pesticides
21marketing boards
reduce the prices farmers receive for their products
22overvalued exchange rates
that make farm products more expensive for foreigners
23tariffs on imports
seeds, fertilizers, machinery, and other inputs that raise their prices, thus, also raise productions costs for farmers
24overvalued exchange rates
make farm products more expensive for foreigners
25the free-rider problem
each farmer would benefit from higher prices, but would like others to bear the costs of organizing politically
26improving the climate for investments in agriculture in LDCs
-remove price distortions (tariffs and marketing boards)
-provide access to credit in rural areas
-invest in infrastructre
-invest in human capital
27David Ricardo
comparative advantage (product in which it has the lowest opportunity cost of production)
28How to calculate comparitive advantage for wheat?
oil/wheat = answer
29tarrifs can
Draw to an industry resources that have more valuable uses elsewhere.
Give a fledgling industry time to learn how to produce efficiently.
Help producers at the expense of consumers
30over the years tariffs have
exports from low- and middle-income countries have shifted toward manufactured exports.
tariffs in low- and middle-income countries have fallen.
31global supply chain congestion is
A surge in U.S. demand following the pandemic.
A abrupt shift in U. S. demand from services to goods.
Flows of goods that exceed infrastructure capacity (ports, railroads, trucking lines).