Economic Development in Asia

Chapter 1 –Introduction and Overview

 Economic Development in Asia
Chapter 1 –Introduction and Overview
 Economic Development in Asia
• East Asian miracle, a showcase of development up until
the Asian crisis.

• Asian crisis created a number of questions about the

continued viability of a rapid growth profile for the region.

• Economies have begun to rebound.

 Economic Development in Asia

• Social impact of the crisis has been substantial.

• Future development will depend upon many factors, including

public policy and developments in industrial countries.

• This course looks at both the history and the future outlook for
the region.
 Difference between development
economics and other branches of
economics

• It looks at all of the other branches of economics within

the context of economic development.

• It uses the tools developed in other branches of

economics to analyze the problems and challenges of
economic development.
Measuring Growth & Development

• Use of GDP and GNP and exchange rate comparisons

lead to patterns of growth over time.

• Other methods such as purchasing power parity can

also be used to compare standards of living.
 Other Measures
• Human development index (HDI)
• Healthy life expectancy
• Green GNP
- assesses the impact of environmental
degradation in the development experience.
 Human Development Index (HDI)
• 3 components: per-capita income, life
expectancy at birth, level of educational
attainment that combines adult literacy and
educational enrolment rates
• HDI is developed as a ratio of a particular
country to the most developed country.
 Health Life Expectancy
• Expected number of years to be lived in “full
health”
• Japanese men have the longest healthy life
expectancy at 72 y/o among 191 countries;
Sierra Leone with 27 years life expectancy
• Philippines???
 Green GNP
• Informal name given to national income
measures that are adjusted to take into
account the depletion of natural resources
and environmental degradation
• Includes the cost of exploiting a natural
resource and valuing the social cost of
pollution emissions
• Damages to the global environment, such as
global warming and depletion of the ozone
layer (but hard to estimate)
• “defensive” expenditures, those for
environmental protection and compensation
for environmental damage
 Making Comparisons Between
Countries
• Exchange rate method – between the local
currency and US dollar
• Purchasing Power Parity (PPP) Method –
develops a cost index for comparable baskets
of consumption goods in the local currency
and then compares this with the prices in the
United States
• A country’s PPP is defined as 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
 Summary

• Uniqueness of the Asian development progress (Asian

Miracle Economies).
• Indicators of economic growth and development.