Unit-I: Economies of Development Flashcards

Vocabulary flashcards covering concepts of economic growth, development factors, obstacles, income inequality, and various development indices as presented in the lecture notes.

Economic Growth

A sustained increase in a country’s real national income or output over time, usually measured in terms of Real GDP or Real GNP.

Economic Growth Rate Formula

$$\text{Growth Rate} = \frac{\text{Current GDP} - \text{Previous GDP}}{\text{Previous GDP}} \times 100$$

Economic Development

A long-term process of improving the quality of life of people involves growth in income along with economic, social, and institutional changes.

Inclusive Growth

Growth that benefits all sections of society, with a specific focus on marginalized and vulnerable groups.

Sustainable Development

Development that meets present needs without compromising the ability of future generations to meet their own needs, balancing economic, social, and environmental goals.

Human-Centered Development

A concept of development where people are the ends rather than just the means, emphasizing capabilities and freedoms.

Capital Formation

The increase in the stock of real capital, such as machinery, tools, factories, and infrastructure, promoted by the process of savings, mobilization, and investment.

Human Capital

The skills, education, training, health, and efficiency of the labour force that drive productivity and innovation.

Entrepreneurship

The ability to organize factors of production, take risks, and introduce innovations to promote industrialization and employment.

Political Stability

A non-economic factor of growth referring to peaceful governance, continuity of policies, and the absence of conflict.

Institutional Framework

The system of legal rules, property rights, financial institutions, and regulatory bodies that ensures market efficiency and contract enforcement.

Vicious Circle of Poverty

An economic obstacle where low income leads to low savings, which leads to low investment and low productivity, ultimately circling back to low income.

Structural Dualism

The coexistence of a modern urban sector and a backward rural sector within the same economy, leading to unequal development.

Personal Income Inequality

Differences in income among individuals or households due to variations in education, skills, occupation, or asset ownership.

Functional Income Inequality

The distribution of national income among factors of production, such as land, labour, capital, and entrepreneurship.

Per Capita Income (PCI)

A measure of economic prosperity obtained by dividing national income by the total population.

Human Development Index (HDI)

A composite index introduced by the UNDP that measures development through health (life expectancy), education (years of schooling), and standard of living (GNI per capita).

Inequality-adjusted Human Development Index (IHDI)

A modification of the HDI that accounts for inequality in the distribution of health, education, and income.

Gender Development Index (GDI)

An index that measures gender-based inequalities by comparing Human Development Index values for men and women.

Gender Empowerment Measure (GEM)

An indicator focusing on women’s participation in economic and political life, including shares in parliamentary seats and professional positions.

Physical Quality of Life Index (PQLI)

A non-income measure of well-being based on three indicators: infant mortality rate, life expectancy at birth, and literacy rate.

Multidimensional Poverty Index (MPI)

A comprehensive measure that identifies multiple deprivations faced by individuals in health, education, and living standards.

Green Index

A measure of economic development that incorporates environmental sustainability by accounting for ecological costs and natural resource depletion.

Gross National Happiness (GNH)

A holistic framework for development based on four pillars: sustainable socio-economic development, environmental conservation, cultural preservation, and good governance.

Happy Planet Index (HPI)

An index measuring how efficiently countries convert natural resources into long, happy lives, calculated using well-being, life expectancy, and ecological footprint.

Index of Sustainable Economic Welfare (ISEW)

An alternative to GDP that adjusts personal consumption by adding non-market activities (like household labour) and subtracting environmental and social costs.