European Economic Growth & 1973 Oil Crisis
European Union: Period of High Growth (1950-1973)
The period of high growth (1950-1973) in Europe is known as the Golden Age of European Growth. There was a convergence (catching up) in GDP levels (income levels). Countries that started in 1950 with lower levels of income grew faster than countries that had higher levels of income.
Reasons for High TFP Growth
- Classical Growth Model (Solow model): Explains economic growth by investing in capital, specifically physical capital, with TFP being exogenous.
Spain’s Economic Shift: From Autarky to Developmentalism
Spain’s Economic Shift: Autarky (1939-1959)
One of the main objectives of the first stage of the Franco regime was to achieve economic self-sufficiency (autarky). This promoted an economic policy that advocated isolation from the outside and state intervention in the economy, rather than the free market. The autarkic economy had three main areas of action:
Regulations on Foreign Trade
The first area was the regulation of foreign trade. Imports and exports were to be completely controlled by the state.
Read MoreUnderstanding GNP, GDP, and Key Economic Indicators
- Include depreciation: Machinery wears out and loses value over time. GNP – depreciation = Net National Product (NNP)
- Include unilateral
Understanding HDI, Poverty, Inflation, and Economic Policies in India
Understanding Key Economic Concepts and Policies in India
The Human Development Index (HDI)
The Human Development Index (HDI) is a composite index that measures a country’s average achievement in three areas of human development: access to knowledge, a decent standard of living, and a long and healthy life. The United Nations Development Programme (UNDP) introduced the HDI in 1990 to provide a more comprehensive measure of human development than traditional economic indicators.
The HDI value ranges
Read MoreUnderstanding Externalities: Pollution and Positive Impact
Externalities
An externality exists when the production or consumption of a good directly affects consumers or businesses not involved in the buying or selling of that good, and when those effects are not reflected in market prices.
When introducing the concept of externality, it’s useful to distinguish between social and private valuations. Social valuations include the social and private benefits or costs that the market has not taken into account due to the externality.
Negative Externalities:
Read MoreGeneral Equilibrium and Economic Efficiency
Item 16: General Equilibrium and Economic Efficiency
General Equilibrium Analysis: Unlike partial equilibrium analysis, general equilibrium analysis determines prices and quantities simultaneously in all markets. It explicitly considers feedback effects. A feedback effect is a price or quantity adjustment in one market caused by price and quantity adjustments in related markets.
Efficiency in Exchange: In an exchange economy, two or more consumers trade two or more goods. An initial allocation of
Read More