Economic Development in POL 202

These flashcards cover key terms and concepts from the lecture on economic development, focusing on the roles of the state and markets.

Neoliberalism

An economic approach that emphasizes free markets and minimal state intervention, often expecting that states worsen economic performance with intervention.

State interventionism

The belief that state intervention can improve economic performance if executed with good policies and sufficient state capacity.

State-led development

An approach post-World War II, where states actively engage in guiding economic growth, seen in examples like Japan, South Korea, Taiwan, and Brazil.

Industrial policy

A set of policies formulated to protect and develop domestic industries, often directed by a government agency like Japan's MITI.

Market-based economies

Economic systems that prioritize free markets, competition, and limited state role in economic decisions.

Economic Freedom

The extent to which a market operates without state intervention, influencing economic performance.

Reverse causality problem

A situation in which it is unclear whether X causes Y, or Y causes X, complicating causation in economic analysis.

Hyperinflation

An economic crisis where a country's currency rapidly loses value, leading to skyrocketing prices of goods.

Intervening variable problem

A situation in which a variable influences both the independent and dependent variables, affecting perceived relationships.

Spurious correlation problem

A misleading correlation between two variables caused by a third factor, leading to incorrect conclusions about causation.