Download PDF by A.P. Thirlwall: Growth and Development: With Special Reference to Developing

By A.P. Thirlwall

ISBN-10: 0333600878

ISBN-13: 9780333600870

ISBN-10: 1349231959

ISBN-13: 9781349231959

ISBN-10: 2052052062

ISBN-13: 9782052052060

This revised version comprises new fabric on international suggestions and debt and has up to date statistics and the institutional fabric. The publication goals to supply scholars with an figuring out of the speculation and perform of financial improvement.

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Additional resources for Growth and Development: With Special Reference to Developing Economies

Sample text

No one can possibly know with precision what the future rate of advance of the industrialised countries will be, and 3 per cent per capita income growth - the historical average from 1950 to 1990- would seem to be as reasonable an assumption as any. But the lower the growth rate, the less formidable the growth effort of the poor countries to achieve parity of living standards. No special significance should be attached to the year 2010 as the choice of target year. Some year has to be taken to make these 'catching up' calculations - not too close to the present to give no hope and not too far away for the goal to be lost sight of.

The results of constructing and using purchasing-power parity ratios for making binary comparisons have been quite dramatic. In an early study, Millikan suggested that the real incomes of many African and Asian countries in 1950 were of the order of 350 per cent larger than indicated by UN statistics in US dollars per capita (Kindleberger (1965), p. 9). Likewise, Usher (1966, pp. 06 : 1 converting Thai income in local currency into pounds at the foreign exchange rate. 76 : 1. In making binary international comparisons of per capita incomes, therefore, it makes a great deal of difference whether the official foreign-exchange rate is used as a measure of purchasing-power parity, or, if the use of exchange rates is discarded, which quantity weights are applied to relative price indices or which price weights are applied to relative quantities.

Relative differences will narrow as long as the per capita income growth rate of the developing countries exceeds that of the developed countries; and this excess of growth is a precondition for absolute differences to narrow and disappear in the long run. In the short run, however, a narrowing of relative differences may go hand in hand with a widening absolute difference, given a wide absolute gap to start with, and thus the rate of Development and Underdevelopment growth necessary to keep the absolute per capita income gap from widening is likely to be substantially greater than that required to keep the relative gap the same.

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Growth and Development: With Special Reference to Developing Economies by A.P. Thirlwall


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