PRINCIPLES AND

CONCEPTS OF
DEVELOPMENT

Name: Ocampo, Abegail O. Professor: Dr. Remigio G. Tiambeng

Subject & Time: EcoDev MW 9:30-11:00 Date: February 11, 2020
 Over the previous discussion about the principles and concepts of
development---it tackles the introduction of Economic Development, the Meaning and
Measurement of Economic Development, Economic Development in Historic
Perspective, Characteristics and Institutions of Developing Countries, and Theories of
Economic Development.

Economic development is a universal concern that involves all nations, rich or

poor, in any climate or season. Rich nations strive to maintain, if not further, their
wealth, and perhaps share some of their blessings with less fortunate societies. Poor
nations search for strategies that will help them attain their dreams of progress and
prosperity. The goal of Economic Development is to uplift the people's quality of life, a
nation must ensure the following: sufficient supply and efficient distribution of basic
needs, most especially food, clothing, shelter and health services, improve standard of
living and eliminate ignorance and poverty. One important institutional capability is the
capacity to raise revenue and provide basic services. In several failed low-income
countries, such as Sierra Leone, Liberia, Sudan, and Somalia, the state failed to provide
minimal functions such as defense, law and order, property rights, public health,
macroeconomic stability and protection of the destitute, to say nothing of intermediate
functions, such as basic education, transport and communication, pollution control,
pensions, family allowances and health, life , and unemployment insurance. I’ve learned
also the different theories in Economic Development. These are Rostow’s Stages of
Economic Growth, Harrod and Domar, Structural Change Theory, Lewis Theory of
Development, Coordination Failure: The O-ring Theory of Economic Development, and
the Dependency Theory.

Studying this would help us to understand more the Economic Growth and
Development. We were able to find out how economic development and growth differs
with each other. And identifying the basic indicators of economic growth and
development made me realize the importance of one’s countries economy and why it is
a big deal to study Economics.
 STORY OF THE GREAT
DEPRESSION

Name: Ocampo, Abegail O. Professor: Dr. Remigio G. Tiambeng

Subject & Time: EcoDev MW 9:30-11:00 Date: February 11, 2020
 The Great Depression was a worldwide economic depression that lasted 10 years. It
began on “Black Thursday," October 24, 1929. Over the next four days, stock prices fell 23% in
the stock market crash of 1929. The stock market had been troubled well before October,
however; in August of 1929, stocks were overvalued despite rising unemployment and declining
production. As such, many people consider this the true starting point of the Great Depression.

Unemployment Reached 25%. The Great Depression affected all aspects of society. By

its height in 1933, unemployment had risen from 3% to 25% of the nation’s workforce. Wages
for those who still had jobs fell. U.S. gross domestic product was cut in half, from $103 billion to
$55 billion, due partly to deflation. The Consumer Price Index fell 27% between November 1929
to March 1933, according to the Bureau of Labor Statistics. Panicked government leaders
passed the Smoot-Hawley tariff in 1930 to protect domestic industries and jobs, but it actually
worsened the issue. World trade plummeted 66% as measured in U.S. dollars between 1930
and 1932. Global financial distress had significant geopolitical ramifications. Hyperinflation and
other economic woes in Germany, for instance, arguably contributed to Hitler's rise.

Life During the Depression. The Depression caused many farmers to lose their farms. At
the same time, years of over-cultivation and drought created the “Dust Bowl” in the Midwest,
destroying agricultural production in a previously fertile region. Thousands of these farmers and
other unemployed workers migrated to California in search of work. Many ended up living as
homeless “hobos.”

What Caused It? There is no consensus among economists and historians regarding the
exact causes of the Great Depression. However, many scholars agree that at least the following
four factors played a role. The stock market crash of 1929. During the 1920s the U.S. stock
market underwent a historic expansion. As stock prices rose to unprecedented levels, investing
in the stock market came to be seen as an easy way to make money, and even people of
ordinary means used much of their disposable income or even mortgaged their homes to buy
stock. Banking panics and monetary contraction. Between 1930 and 1932 the United States
experienced four extended banking panics, during which large numbers of bank customers,
fearful of their bank’s solvency, simultaneously attempted to withdraw their deposits in cash.
The gold standard. Such imbalances gave rise to significant foreign gold outflows to the United
States, which in turn threatened to devalue the currencies of the countries whose gold reserves
had been depleted. Decreased international lending and tariffs. In the late 1920s, while the U.S.
economy was still expanding, lending by U.S. banks to foreign countries fell, partly because of
relatively high U.S. interest rates.

What Ended the Great Depression? In 1932, the country elected Franklin D. Roosevelt as
president. He promised to create federal government programs to end the Great Depression. 1 3
Within 100 days, he signed the New Deal into law, creating 15 new agencies. They were
designed to create jobs, allow unionization, and provide unemployment insurance. Many of
these programs still exist. They help safeguard the economy and prevent another depression.