MASECO 2 & 3

World Bank

An organization known as an "international financial institution" that provides development funds to developing countries in the form of interest-bearing loans, grants, and technical assistance.

Low-income countries (LICs)

In the World Bank classification, countries with a GNI per capita of less than $1,025 in 2011.

Middle-income countries

In the World Bank classification, countries with a GNI per capita between $1,025 and $12,475 in 2011.

Newly industrializing countries (NICs)

Countries at a relatively advanced level of economic development with a substantial and dynamic industrial sector and with close links to the international trade, finance, and investment system.

Least developed countries

A UN designation of countries with low income, low human capital, and high economic vulnerability.

Human capital

Productive investments in people, such as skills, values, and health resulting from expenditures on education, on-the-job training programs, and medical care.

Gross national income (GNI)

The total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP) plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents.

Value added

The portion of a product's final value that is added at each stage of production.

Depreciation (of the capital stock)

The wearing out of equipment, buildings, infrastructure, and other forms of capital, reflected in write-offs to the value of the capital stock.

Capital stock

The total amount of physical goods existing at a particular time that have been produced for use in the production of other goods and services.

Gross domestic product (GDP)

The total final output of goods and services produced by the country's economy within the country's territory by residents and nonresidents, regardless of its allocation between domestic and foreign claims.

Purchasing power parity (PPP)

Calculation of GNI using a common set of international prices for all goods and services, to provide more accurate comparisons of living standards.

Human Development Index (HDI)

An index measuring national socioeconomic development, based on combining measures of education, health, and adjusted real income per capita.

Diminishing marginal utility

The concept that the subjective value of additional consumption lessens as total consumption becomes higher.

Absolute poverty

The situation of being unable or only barely able to meet the subsistence essentials of food, clothing, shelter, and basic health care.

Crude birth rate

The number of children born alive each year per 1,000 population.

Dependency burden

The proportion of the total population aged 0 to 15 and 65+, which is considered economically unproductive and therefore not counted in the labor force.

Fractionalization

Significant ethnic, linguistic, and other social divisions within a country.

Resource endowment

A nation's supply of usable factors of production, including mineral deposits, raw materials, and labor.

Infrastructure

Facilities that enable economic activity and markets, such as transportation, communication and distribution networks, utilities, water, sewer, and energy supply system.

Imperfect market

A market in which the theoretical assumptions of perfect competition are violated by the existence of, for example, a small number of buyers and sellers, barriers to entry, and incomplete information.

Incomplete information

The absence of information that producers and consumers need to make efficient decisions resulting in underperforming markets.

Property rights

The acknowledged right to use and benefit from a tangible (e.g., land) or intangible (e.g., intellectual) entity that may include owning, using, deriving income from, selling, and disposing.

Brain drain

The emigration of highly educated and skilled professionals and technicians from the developing countries to the developed world.

Free trade

Trade in which goods can be imported and exported without any barriers in the forms of tariffs, quotas, or other restrictions.

Terms of trade

The ratio of a country's average export price to its average import price.

Research and development (R&D)

Scientific investigation with a view toward improving the existing quality of human life, products, profits, factors of production, or knowledge.

Divergence

A tendency for per capita income (or output) to grow faster in higher-income countries than in lower-income countries so that the income gap widens across countries over time (as was seen in the two centuries after industrialization began).

Convergence

The tendency for per capita income (or output) to grow faster in lower-income countries than in higher-income countries so that lower-income countries are "catching up" over time.

Conditional convergence

When countries are hypothesized to converge not in all cases but other things being equal (particularly savings rates, labor force growth, and production technologies).

Economic Institutions

"Humanly devised" constraints that shape interactions (or "rules of the game") in an economy, including formal rules embodied in constitutions, laws, contracts, and market regulations, plus informal rules reflected in norms of behavior and conduct, values, customs, and generally accepted ways of doing things.