Now, thanks to impressive growth in places like China, the world is more like one-sixth rich, two-thirds not rich but improving, and one-sixth poor and going nowhere. Most developing economies are experiencing a…
Download file to see previous pages...
Economist Paul Collier, of Oxford Univesity in England, has examined what went wrong with these “trapped countries.” Based on decades of research, he identifies some poverty traps. About 750 million people of the bottom billion have recently lived through, or are still in the midst of, a civil war. Such wars can drag on for years with economically disastrous consequences. For example, the ethnic conflict in Burundi between the Hutus and the Tutsis has lasted three decades, which helps explain that country’s poorest-in-the-world ranking. Unfortunately, the poorer a country becomes, the more likely it is to succumb to civil war. And once a country goes through one civil war, more are likely. Ethnic conflict, or civil war, is Collier’s first poverty trap.
But why, aside from poverty itself, are so many sub-Saharan countries mired in civil war? He finds that three factors heighten the risk of such conflicts: (1) a relatively high proportion of young, uneducated men with few job prospects (who, thus, have a low opportunity cost); (2) an imbalance between ethnic groups, with one tending to outnumber the rest; and (3) a supply of natural resources like diamonds or oil, which both creates an incentive to rebel and helps finance that rebellion. The presence of mineral wealth in an otherwise poor country can also undermine democracy itself. Government revenue from mineral sales reduces taxes, which dampens public debate about how taxes should be spent. For example, because of oil revenue, the Nigerian government relies less on taxes, so there is less pressure for government accountability, and hence fewer checks and balances on a corrupt government. Thus, misuse of resource wealth is Collier’s second poverty trap. About 300 million of the poorest billion live in countries that have fallen into this trap.
This leads us to the third poverty trap: a dysfunctional or corrupt government. Government
...Download file to see next pagesRead More
Since the UK economy was severely hit by the Global Financial Crisis, it faced rising unemployment because of recession and low aggregate demand. The spending power of the people was low and a lot of people were laid off due to which AD further dropped. Also there was a bank crisis due to which consumption fell and so did the investments.
It also pays close attention to all marketing activities used during unique product and market conditions. Vector analysis of Cardiovascular Segment Cardiovascular diseases are classes of diseases affecting the blood vessels (veins and arteries) and the heart.
(See Kampmann, 2004 and Notter and Grant, 2011) Selection and description of each feedback loop “Reinforcing loops are system dynamics that end up reinforcing the effect of a certain action or set of actions causing growth and acceleration.” (Notter and Grantt, 2011, p.
Everyone is not protected in the market with cost-of-living increase, especially workers in an unorganized sector. Many workers earn their subsistence on fixed incomes because of either no or very less bargaining power; they cannot ask for a proportional increase in their wages that can match the inflation and thus, they are harmed most due to inflationary pressure in prices.
Investment in human capital can, therefore, be improved and enhanced through education. The most basic contribution to college education in increasing an individual’s human capital is the acquisition of skill. College education instills the required skill into an individual thus enabling the individual increase their economic value in the marketplace.
Keynes broke ranks with the paradox and challenged the traditional view by postulating that savings would remove demand from the system, result in less production, and stimulate unemployment. He contended that "...lack of spending was likely to be a chronic problem in an industrialised economy" and reduce output (cited in Schenk).
C . Central banks could increase money supply through printing of more notes or electronically creating money. This is also called quantitative easing which is basically changing bank reserves. They can
3 Pages(750 words)Case Study
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Case Study on topic Macroeconomics...........case5 for FREE!