Professional Documents
Culture Documents
de DiosAbesamisArellanoLibre
Textbook and sources
1. Mankiw, N. G. [2010] Macroeconomics. 7. ed. New
York: Worth Publishers.
2. Sicat, G. [2004] Economics. Quezon City: Anvil
Publishing.
3. Helpman, E. [2004 ] The mystery of growth.
Cambridge MA: MIT Press.
4. Lecture notes and other material (available at the
SE Library reserve section and in yahoogroup).
Textbook and sources
Not attainable
Attainable
Rice
Technology and resources
Technology
1 day of labour can produce either
5 kg of chicken, or
25 kg of rice, or
a combination of the two
Resources
20 days of labour
Technology and resources
QC = 5LC LC = (1/5)QC
QR = 25LR LR = (1/25)QR
25 [ LC + LR = 20 ]
5QC + QR = 500
Production-possibilities curve
Chicken
5QC + QR = 500
5(0) + 500 = 500
5(100) + 0 = 500
100
Rice
500
Efficiency
Efficient
Inefficient
Rice
Growth
(1/5)QC + (1/25)QR = 25
125 5QC + QR = 625
100
Rice
500 625
Growth from better technology
Chicken
(1/5)QC + (1/25)QR = 20
100
Rice
500
Equity
Lowlanders
Income
Development
Wider opportunities for all in society can be attained either
by growth, greater efficiency, greater equity, or all
these.
Opportunities mean not only command over material goods
but also conditions essential to human existence (e.g.,
knowledge, health, natural environment, and freedom).
Hence not all economic growth promotes development,
and not all development requires growth.
A major is question is whether and how the two go hand in
hand.
Human development
introduced by the UNDP in 1990 as an
alternative measure of development to just
income (work by A.K. Sen and M. ul-Haq)
meant to measure a persons capabilities to
accomplish more physically, intellectually,
materially.
income just a means to an end (outcomes
matter, not incomes)
healthy, wealthy, and wise
Human development index
Capability Measure
concept
Health life expectancy
1. Mean years of schooling
Knowledge
2. Expected years of
schooling
Decent living standard Gross national income per
capita
Stabilisation is
about keeping the
economy at full
employment.
Good 1
But observed growth is a combination of employing resources
more fully and an expansion of resources.
Real GDP growth 1982-2012
(in percent)
Marcos C Aquino Ramos Estrada Arroyo B Aquino
10
0
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 07 08 09 10 11 12
-2
-4
-6
-8
-10
Questions
What is average growth for the whole period?
What were average GDP growth rates for
each of the presidents?
What can explain the noticeably lower growth
rates in 1984-1985; 1991-1992; 1998; and
2009?
What is the governments idea of inclusive
growth? (See Phil. Devt. Plan)