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01 EC313 Introduction

EC 313 slides for studying for exams

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iitb.rishulnayak
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6 views

01 EC313 Introduction

EC 313 slides for studying for exams

Uploaded by

iitb.rishulnayak
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 15

Introduction to Development

Economics
Dr. Rama Pal
Department of Economics, IIT Bombay
Email: [email protected]
What is Economic Development?

Traditional View:
Efficient utilization of scarce resources: materialistic and individualistic
approach

Accumulation of wealth

Economic development as growth of real per capita income

Dr. Rama Pal, Department of Economics, IIT Bombay 2


Income and Growth: Historical Experience

How do you increase the availability of goods and services?

Simon Kuznets - concept of GDP

Focus on rapid industrialization, neglect of agriculture and rural


areas

Dr. Rama Pal, Department of Economics, IIT Bombay 3


Per Adult GDP over Time

Dr. Rama Pal, Department of Economics, IIT Bombay 4


Per Adult GDP -
2014

Dr. Rama Pal, Department of Economics, IIT Bombay 5


Income Distribution and Inequality

Global disparities

Within-country inequalities
- How do you understand the extent?

Dr. Rama Pal, Department of Economics, IIT Bombay 6


Share of Richest
10% - 2014

Dr. Rama Pal, Department of Economics, IIT Bombay 7


Share of Richest 10% over time

TECHNICAL NOTES FOR INDIA


1922-1950: tax data from Indian Tax Department;
1950-2014: Tax data from Indian Tax Department
and Survey data from NSS0, using IHDS to convert
survey consumption into survey income (see
Chancel Piketty 2019 for details). After 2014,
values are extrapolated assuming inequality
neutral growth rates. The World Inequality Lab is
currently updating 2015-2021 estimates using
newly released tax data.

Dr. Rama Pal, Department of Economics, IIT Bombay 8


Share of Bottom
50% - 2014

Dr. Rama Pal, Department of Economics, IIT Bombay 9


Share of Bottom 50% over time

TECHNICAL NOTES FOR INDIA


1922-1950: tax data from Indian Tax Department;
1950-2014: Tax data from Indian Tax Department
and Survey data from NSS0, using IHDS to convert
survey consumption into survey income (see
Chancel Piketty 2019 for details). After 2014,
values are extrapolated assuming inequality
neutral growth rates. The World Inequality Lab is
currently updating 2015-2021 estimates using
newly released tax data.

Dr. Rama Pal, Department of Economics, IIT Bombay 10


Structural Features

Demographic characteristics
Demographic transition in India

Occupational and production structure

Rural-urban migration

International trade

Dr. Rama Pal, Department of Economics, IIT Bombay 11


Faces of Underdevelopment

Human development

Capabilities and freedoms

Dr. Rama Pal, Department of Economics, IIT Bombay 12


Can the economy grow forever?

Dr. Rama Pal, Department of Economics, IIT Bombay 13


Models of Growth and Development: A Timeline

Classical Neoclassical Inequality and


Growth Growth Poverty

Structural Models Endogenous Human Development,


of Growth Environment
Growth Models

Dr. Rama Pal, Department of Economics, IIT Bombay 14


Textbook and References

Textbook:
Ray (1999) Development Economics

Reference Books:
Todaro and Smith (2015) Economic Development

Barro and Sala-i-Martin (2004) Economic growth

Sen (1999) Development as Freedom

Dr. Rama Pal, Department of Economics, IIT Bombay 15

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