6. Developing countries

• Poverty

  Pronounced deprivation in well-being
• Monetary Poverty Measure

  • Income/consumption
• The poor

  Those who do not have enough income or consumption to put them above some adequate minimum threshold (World Bank)
• Multidimensional Poverty Measures

  • Monetary poverty
  • Education
  • Basic infrastructure Services
• Multidimensional Poverty Index (MPI)

  Developed by the Oxford Poverty and Human Development Initiative (OPHI) with the UN Development Programme (UNDP)
• Global Multidimensional Poverty Index

  An international measure of acute poverty covering over 100 developing countries, complements traditional income-based poverty measures by capturing the deprivations that each person faces at the same time with respect to education, health and living standards
• Selected Indicators of Social Development

  • GDP
  • GDP per capita
  • Population
  • Economic sectors
  • Human Development Index
  • Natural Resources
  • Environment
• Gross Domestic Product (GDP)

  Measure of economic activity, market value of all final goods and services produced in a country during a year, measures activities located in the country regardless of their ownership
• GDP Expenditure Approach

  1. GDP=C+I+G+(X-M)

  2. C - Personal Consumption Expenditures on Goods and Services

  3. I - Gross Private Investment

  4. G - Government Expenditures on Goods and Services

  5. X - Exports

  6. M - Imports
• Nominal GDP

  Money value of final goods and services produced in a given year, where the values are in terms of the market prices of each year
• Real GDP

  GDP in constant prices
• GDP deflator

  Price index, used to remove inflation from the GDP (to deflate the GDP), it is the ratio of nominal GDP to real GDP, price of all components of GDP
• Nominal gross domestic product in Purchasing-Power-Parity (PPP GDP)

  Calculated by dividing a country's nominal GDP in its own currency by the PPP exchange rate
• GDP per capita

  Total value of final goods and services produced within a country during a specified time period divided by the average population for the same one year
• Gross National Product (GNP)

  Total market value of all final goods and services produced by the residents of this country in a given period of time (usually a calendar year), includes residents' incomes from economic activities carried out abroad as well as at home and excludes incomes produced at home but belonging to non-residents
• Gross National Income (GNI)

  Includes income earned by country's residents, whether it originates from production within its borders, or from assets held abroad
• Factors of production

  • labour
  • capital
  • land
• Inflation

  Increase in the price level, persistent tendency for prices increase, measured by the proportional changes over time in appropriate price indices (e.g CPI, GDP deflator)
• Price Index

  Measure of the general price level, it is a weighted average of the prices of a number of goods and services
• Rate of Inflation (Inflation Rate)

  Percentage increase in price level
• Disinflation

  Reduction in the rate at which prices are rising
• Deflation

  Decrease in the overall level of prices
• Economic Sectors

  • Primary sector (e.g. mining, agriculture, fishing)
  • Secondary sector (assembling raw materials and manufacturing transformation of raw materials into finished products)
  • Tertiary sector (devoted to the provision of services, finance and business services, health care and entertainment, communication)
• Human Development Index (HDI)


  Metric compiled by the United Nations Development Programme, focuses upon three basic dimensions of human development: long and healthy life, knowledge, a decent standard of living, first launched in 1990
• Categorization of Countries according to the IMF World Economic Outlook (WEO)


  • Per capita income level
  • Export diversification
  • Degree of integration into the global financial system
• Poverty is


  pronounced deprivation in well-being
• Multidimensional Poverty Measures (3 dimensions)

  • Monetary poverty
  • Education
  • Basic infrastructure Services
• Multidimensional Poverty Index (MPI) is developed by the Oxford Poverty and Human Development Initiative (OPHI) with the UN Development Programme (UNDP)
• The global Multidimensional Poverty Index is an international measure of acute poverty covering over 100 developing countries.
• A national Multidimensional Poverty Index is a country-specific poverty measure tailored to each country's unique situation. Such measures generally take the dimensions of health, education and living standards as their starting paint, and supplement with different dimensions measured by locally appropriate indicators.