Econ 333

Topics: Developing country, Developed country, Gini coefficient Pages: 6 (1511 words) Published: April 29, 2014

Econ 333
10/18/13
Assignment 3
Chapter 3: Questions for Discussion
1. The distinctions among the stages-of-growth theory of development, the structural-change models of Lewis and Chenery, and the theory of international dependence is that each one takes into account different factors or focuses on specific factors. The Stages-of-growth theory has a five stage to which a developing nation must go through. The Structural-change model of Lewis focuses on a developing country transforming itself from an agricultural economy to an industrial economy. Chenery model was similar but took into account more factors. The neo-Marxist theory of international dependence focuses on the unequal power partnership between an underdeveloped country and a developed country and in the false-paradigm it focuses on the well intention guidance and help that usually does not work or inappropriate for that developing country. I think that the theory of international dependence provides the best explanation of the situation in most developing nations because most of those nations are usually being exploited by a developed nation allowing a small group of people to benefit financially. 2. According to Economic Development Eleventh edition, dual societies is basically rich and poor countries exist in the world and dualism is idea that the rich are getting richer and the poor are getting poor causing the gap between them increase. In my opinion I do believe that this concept portrays the situation in most developing countries because the poor usually have no means of improving their financial situation. 3. I think what people mean by claiming that international dualism and domestic dualism are merely different manifestations of the same phenomenon is that each one looks different but is from the same cause. I think it is a valid conceptualization because in both international and domestic the gap between the poor and rich is growing. 4. According to Economic Development Eleventh edition, the term neoclassical counterrevolution means the developing countries should let the market guide the distribution of resources and promote economic development. The principal arguments are the free market approach that says that gov’t intervention in the market is not good. Also it argues that gov’t is corrupt and inefficient. I think it is valid because the markets are efficient that will promote development. 5. No, because each nation is different and develops differently that I don’t see one theory working for all the developing countries. Chapter 4

1. Some examples of complementarities from everyday life are when homeowners want to increase the value of their homes all the homeowners would have to invest in their homes to make them look nice and therefore increasing the their home values. Another example is in order to decrease pollution everyone must in some way invest in stopping pollution. I do think my example somewhat help as a metaphor for economic development problems because in order for complementarities to work everyone must invest. 2. International trade and foreign investment can solve some the lack of unskilled workers and the lack of technology needed to increase productivity. O-ring model I would say it would allow the firms to acquire workers with high levels of skill and retain them with high wages as long as there is adequate investment made by all the parties involved. 3. I am pretty sure that developing countries can escape all the traps described in chapter 4 because as mentioned, trap usually has a way out one way or another although it will be difficult. In my opinion the ones that would be the most difficult to escape are the poverty trap and the middle-income trap. I’m not sure develop countries can do much do to the large amount of corruption that infests those developing countries. Developing countries could maybe try to work together to improve some situations that occur in those countries. 4. I think that high levels...
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