No. 3 - Module 2 (Final)

Accounting 1204
ECONOMIC DEVELOPMENT
A Lecture by
Kirsten Glace P. Juanitas, CPA
Module 2: Overview of
Development Economics
Learning Objectives:
1. Differentiate Development Economics

from other aspects of Economics
2. Differentiate Economic Growth from
Economic Development
3. Learn about Measures of Economic
Growth and Development
4. Make Comparison Between Countries
The Industrial Revolution (1700s -1800s): ➢ East Asian Economic Miracle
➢ Experienced flourishing growth ➢ Gave rise to Newly Industrialized
➢ Great Britain, Germany, Russia, US, Japan Economies (NIEs)
➢ A.K.A South Korea, Singapore,
Taiwan, Hong Kong
➢ A.K.A Asian Tigers, Asia Dragon
A Lecture by
➢ State-sponsored capitalism
➢ government invests in certain sectors of the economy in order to stimulate the growth of
new (or specific) industries in the private sector.
➢ features an export-oriented economy which brought in foreign direct investments and

greater technological advancement
➢ Asian tigers experienced GDP growth, reduced poverty, improvement in the overall
standards of living
➢ Used by Indonesia, Malaysia Thailand and the Philippines

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What is
Development Economics?
A Branch of Economics that focuses

on improving fiscal, economic, and
social conditions in developing countries.
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Development Economics also considers factors
such as health, education, working conditions,
domestic and international policies, and market
conditions with a focus on improving
conditions in the world’s poorest countries.
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What is Economic
Development?
Is it the same with
Economic Growth?
What is Economic
Growth then?
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ECONOMIC GROWTH
➢ Increase in the production of economic goods and
services from one period to another
➢ Usually resulting from increase in resources or

development/ introduction of technology
➢ Commonly measured in terms of GDP and GNP
A Lecture by
Gross Domestic Product
➢ is the monetary value of all finished goods and services made
within a country during a specific period.
➢ Consumption + Investment + Government Spending + Net

Exports
➢ GDP per capita → GDP/Population
➢ Real GDP → adjusted to inflation = Nominal GDP/GDP Deflator
➢ GDP Deflator → a measure of price inflation/deflation
➢ GDP Growth → (CY GDP – PY GDP)/PY GDP
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Gross National Income
➢ total amount of money earned by a nation's people
and businesses within a country plus net receipts of
income from abroad
➢ GDP + (Money Flowing from foreign countries – to

foreign countries)
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Gross National Product
➢ is an estimate of total value of all the final products
and services turned out in a given period by the
means of production owned by a country's residents
➢ GDP + (income of residents from abroad-income of

foreigners within the country)
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GDP vs GNI vs GNP
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ECONOMIC
DEVELOPMENT
➢ An improvement of the welfare of people in a nation
➢ An improvement in the over-all quality of life
➢ Increasing people’s freedom
➢ Reducing poverty
➢ Provision of health care, education, law and order
➢ Guarantee of civil liberties and opportunities for civic participation
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A Country is
Like a Child Education
Health
Nutrition
Does Economic Growth
Lead to Economic Development?
The Government is
A Lecture by
the “parents”
THE TEAM
Human Development
Index
Green GNP
MEASURES OF ECONOMIC DEVELOPMENT
Health Life Expectancy

August Bergquist Allan Matson
Manager Key employee
Victoria Lindqvist
Owner
A Lecture by
Human Development
Index (HDI)
➢ Developed by UNDP in the late 1980s
➢ Published since 1990
➢ Components: per-capita income, life
expectancy at birth, level of
educational attainment
A Lecture by
Human Development
Index (HDI)
➢ emphasize that people and their capabilities should be the
ultimate criteria for assessing the development of a country,
not economic growth alone.
➢ can also be used to question national policy choices, asking
how two countries with the same level of GNI per capita can
end up with different human development outcomes
➢ These contrasts can stimulate debate about government policy
priorities.
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A Lecture by
Healthy Life
Expectancy
➢ A measure used by WHO
➢ Expects the number of years to be
lived in full health
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Green GNP
➢ National income measures that are
adjusted to take into account the
depletion of natural resources and
environmental degredation
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➢ Exchange Rate Method
➢ PPP Method
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➢ Since GDP is measured in a country’s
currency, we need to convert this in a
common currency in order to make
comparison
➢ GDP is converted to USD
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➢ A cost index for comparable baskets of consumption goods in the
local currency and then compares this with the prices in the US for
the same set of commodities
➢ The number of units of the country’s currency required to buy the

same amount of goods and services that a dollar would buy in the
united states
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A Lecture by
Comparison (2020 Rank)
Country Nominal GDP Population GDP Per Capita HDI EPI
USA 21.43 T – 1st 328.2 M 65,297.52 USD 17th 24th
Germany 3.861 T → 4th 83.02 M 46,445.25 USD 6th 10th
France 2.716 T → 7th 67.06 M 40,493.93 USD 26th 5th
United Kingdom 2.829 T → 6th 66.65 M 42,330.12 USD 13th 4th
China 14.34 T → 2nd 1.398 B 10,261.68 USD 85th 120th
Japan 5.082 T → 3rd 123.3 M 40,246.88 USD 19th 12th
India 2.869 T → 5th 1.366 B 2,099.60 USD 131st 168th
South Korea 1.647 T → 12th 51.71 M 31,846.22 USD 23rd 28th
Taiwan 612.17 B → N/A 23.6 M 53,429 USD Not in the list 40th
Singapore 372.1 B → 34th 5.704 M 65,233.28 USD 11th 39th
Hong Kong 365.7 B → 35th 7.507 M 48,713.47 USD 4th Not in the list
Philippines 376.8 B → 33rd 108.1 M 3,485.08 USD 107th 111th
Niger 12.91 B →135th 23.31 M 553.90 USD 189th 152nd
Burundi 3.012 B →173rd 11.53 M 261.25 USD 185th 170th
THANK YOU!
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Accounting 1204

1. Differentiate Development Economics

➢ features an export-oriented economy which brought in foreign direct investments and

➢ Used by Indonesia, Malaysia Thailand and the Philippines

A Branch of Economics that focuses

➢ Usually resulting from increase in resources or

➢ Commonly measured in terms of GDP and GNP

➢ Consumption + Investment + Government Spending + Net

➢ GDP per capita → GDP/Population

➢ Real GDP → adjusted to inflation = Nominal GDP/GDP Deflator

➢ GDP Deflator → a measure of price inflation/deflation

➢ GDP Growth → (CY GDP – PY GDP)/PY GDP

➢ GDP + (Money Flowing from foreign countries – to

➢ GDP + (income of residents from abroad-income of

Health Life Expectancy

➢ GDP is converted to USD

➢ The number of units of the country’s currency required to buy the

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