Econ 313 theories
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9 Terms
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Harrod Dommar
capital output and savings ratio
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\n Lewis
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two sector economy
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Cobb Douglas
relationship between function and production} labor and capital impact the quality of output} efficient production and tech change, endogenous
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Romer
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techno spillover} increasing returns to scale, ENDOGENOUS
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Big Push \n
big investments, small investments are not worth it; discontinous jumps are included in the development process, based on external economies
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\n O ring
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efficient execution of tasks in economics, executed together, high wage at high-skill firm rather than low-skill firm
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\n Lorenz
\-curve to measure development, perc pop x perc wage
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\n Gini
A/ A plus B } 0-1, 1- very unequal, 0 perfect equal
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Todaro Migration Model
Internal migration occurs from rural to urban sectors through the difference in the *expected* wage.
Migration can benefit developing countries and their populations more significantly than any aid attempts.
The model begins by accepting that the assumption of (near) full employment in urban labor markets isn’t particularly appropriate for developing countries which are beset by a chronic (under/)unemployment problem whereby many uneducated and unskilled rural migrants cannot find a job in the formal sector so become unemployed or join the informal sector.
In deciding whether to move to the city or stay home on the farm, an individual must weigh the probability and risks of being unemployed for a considerable time against the positive urban-rural real income differential.
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Migration can benefit developing countries and their populations more significantly than any aid attempts.
The model begins by accepting that the assumption of (near) full employment in urban labor markets isn’t particularly appropriate for developing countries which are beset by a chronic (under/)unemployment problem whereby many uneducated and unskilled rural migrants cannot find a job in the formal sector so become unemployed or join the informal sector.
In deciding whether to move to the city or stay home on the farm, an individual must weigh the probability and risks of being unemployed for a considerable time against the positive urban-rural real income differential.
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