Econdev

• Economic Growth


  Percentage change in a nation's per capita GDP. Boosts the national output.
• Economic Development


  Advancement of the standard of living, e.g. education, healthcare, innovation, environment.
• Economic Growth


  Directly boosts development; all other things remain constant, as higher GDP would mean more to spend on factors that are considered development.
• Standard of Living


  The level of consumption that people enjoy, measured by average income per person
• Cost of Living


  The amount of money it takes to buy goods and services that a typical family consumes. Rising cost of living is called inflation.
• Factors considered in building an economy

  • Saving and Investments
  • Diminishing Returns and Catch-up Effect
  • Investment from Abroad
  • Education
  • Health and Nutrition
  • Property Rights and Political Stability
  • Free Trade
  • Research and Development
  • Population Growth
• Saving and Investments


  Invest in capital assets to enable us to have the capacity to yield more goods and services. However, it is to be noted that capital investment would mean sacrifice to consume more.
• Diminishing Returns and Catch-up Effect

  As the stock of capital increases, the extra output produced from an additional unit of capital decreases. In the long run, a higher saving rate leads to greater level of productivity and income but not greater growth in these variables.
• Investment from Abroad


  An investment that is sponsored with foreign money and operated domestically is called foreign portfolio investment. It is expected that the use of the foreign money would mean more opportunities to produce.
• Education


  Emphasizes human capital as a set of economic assets as important as physical capital. In fact, the largest chunk of the annual budget is dedicated to the education sector.
• Health and Nutrition


  Healthy population would also mean human capital, just like education, hence, are capable to produce more goods and services because they can maximize employment as compared to an unhealthy population. Healthier individuals are more productive.
• Property Rights and Political Stability


  Property rights ensure the exercise of rights over one's property and these guarantee more production of goods and services. A stable political environment is considered to have efficient executive, legislative, and judiciary systems, working together for the country's economic development.
• Free Trade


  An economy that reduces or eliminates trade restrictions experiences economic growth. Outward oriented policies give way to developing countries' opportunity to interact with other countries and trade freely.
• Research and Development


  The products of R&D are new ideas, goods, and services that people consume. Yearly, budget is allocated to research to continue improving the ways things are done, in a more efficient or totally distinctive way.
• Population Growth


  There are two schools of thought regarding population growth. On one hand, a relatively large population means more human resources working and contributing to the production of the country, but on the other hand, it also means more people to consume those goods and services.
• Production


  Y = Tf {L, H, N}. In the advent of technology, as it develops, so is the production of goods and services. Production function shows that all things remain constant; output increases as physical capital, human capital, labor, and resources increase.
• Productivity


  Amount of goods and services produced from each unit of labor. Key factor in defining the standard of living is the advancement of productivity.
• Remember that GDP may be seen in two ways, the total cost of expenses that a country spends on goods and services and the economy's income as its output.
• Factors of production


  • Land
  • Labor
  • Capital
  • Entrepreneurship
• Physical Capital


  Assets utilized to produce goods and services. The more capital we use, the more production we have.
• Human Capital


  Although intangible than capital resources, human capital comprises knowledge, skills, and abilities. It is undeniable that it greatly affects the production of goods and services.
• Natural Resources


  The abundance of natural resources such as trees, water, minerals makes an economy produce more. The abundance of natural resources varies from country to country.
• Technology


  Refers to the output of innovation and never-ending thrust to discover new things and new process that would make production more efficient and faster using less input.
• 1. Ring Theory of Development


  Proposed by economist Michael Kremer in 1993. Production is composed of a set of tasks, and each task must be carried out proficiently. The name "O-Ring" was derived from the devastating destruction of the Challenger space shuttle in 1986. Explains relationship between output and quality. Analyze the complexity of the production processes and determine the effect of the quality of the tasks on total production.
• The Philippines is currently members of the following: United Nation (UN), Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASIAN), World Trade Organization (WTO).
• Philippines ranks 132nd out of an estimated 211 countries or states with a per capita GDP (on a purchasing power parity basis) of 8,400 annually in 2017.
• Inflation is the quantitative measure of the price rate increase of goods and services.
• Export began to plunge during the financial crisis of 2008 but did not go to recession and was strengthened by Benigno Aquino Jr. in 2010.
• According to a report by the Philippine Coop, another factor is considered in the country's economic development is how the government deals with the leftist and separatists.
• The Philippines is faced with a heavy challenge of economic recovery after spending most of its budget in addressing the health programs and financial assistance to its poor constituents.
• SDG 8 "promote sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all".
• Targets and indicators of SDG 8 to tackle economic growth


  • Sustain per capita economic growth
  • Achieve higher economic Productivity
  • Promote development-oriented Policies
  • Resource Efficiency
  • Decent Work
  • Youth Reduction in Employment
  • Eradicate Force Labor
  • Protect labor Rights
  • Sustainable Tourism
  • Financial Institutions
• Rule of 70


  The power of approximation to determine how fast a variable can double compounded without really compounding. Formula - divide 70 to the given growth rate.
• Poverty


  A complex, multifaceted world that requires a clear analysis in all of its many dimensions.
• Relative Poverty


  "Inequality" comparison of the income and expenditure of the poor with reference to the rich or of some other group.
• Absolute Poverty


  Incidence as those levels of incomes and expenditures that fell below a level called poverty line.
• Economic Inequality


  Consists of disparities in the distribution of wealth (accumulated assets) and income. The industrial revolution created a great deal of inequality between countries and was believed to even intensify the gap between the rich and the poor nations.
• Extreme Poverty


  Characterized by those disadvantaged in basic living conditions, can't afford basic needs.
• Poverty Rate


  The most common measure of poverty, relative to the poverty line. The poverty line is set by the government as the threshold to which the absolute value of income and expenses is compared to consider a family to be in poverty. The proportion of the population that is below the poverty line is the poverty rate.
• Subsistence Incidence


  Below the poverty line suffering from extreme hunger.