There is no set criteria for what make a economy developed. When looking at the measures we would expect mostly higher levels of GDP, GNP, advanced infrastructure and standard of life. It is important that we consider both economic and non economic indicators.
A developed Economy is in generally said to be that of a industrialised , sovereign state with highly developed technological infrastructure relative to other nations. More recently new scales such as the Human Development Index (HDI) have been introduced. In this approach we consider three basic areas of a country Health, Education and Living standards which provides a proxy of the level of development. (See appendix A)
Interestingly in recent decades developing countries have been see to attain higher growth rates, such as Afghanistan and Pakistan. (UN, 2015). As a country develops we have observed a shift away from agricultural and towards industrial and then services ( Thirwall, 2005 p.71. See appendix B ) . Increased accumulation of physical and human capita. Leading to a change in consumer prefaces from basic to manufactured luxury goods. There also is a noted decline in family size generally, the china’s OCP being an extreme example ( Un, 2014) The classic economic approach to growth is that of a surplus as a necessary condition of growth ( Marx, Smith, Sraffa). …show more content…
Which is a physical excess of the production, which if used effectively can create a profit of which can reinvested i.e Growth. Of-course a surplus must be managed correctly if used unproductively it will become waste ( Meek, 1977) . We can also thing about Slows model of growth, adding more capital and labour with capital investment this effecting the capital labour ratio. Smith was one of the first to highlight the importance of growth along with specialisation and division of labour. (Smith, 1776) However he did not believe there was scope for increasing returns to scale in the arigricutusral sector. It is at this point many other strands of economic begin to disagree. Lewis extended the surplus model to developing economies, with the idea that from a from agriculture surplus, we feeding excess about into the labour force. Eventually leading to increased wages and the on to a shift to the manufacturing sector . Then with further development, competition and capitalism would enter the economy, leading to the formation of enterprise , corporations, monopolists and so on. (Lewis 1954). A very Darwinist like evolution. However History institutions, social and political forces specific to any economy have a big effect. …show more content…
(Holt 2007, 93). So general theory like this may not always be successful. This is one of the main criticism of the lewis model. In recent decades only a few countries such as South Korea and Taiwan have managed to shift from Agriculture to manufacturing advanced society (El Dorado) . PK economists identified some fundamental difference between developed and developing economies. Once a surplus is in effect and the growth process is initiated one issue is a shortage of productive capacity, not underutilisation. To resolve this requires high levels of investment to support capacity as well as income. Unemployment in developed economies is usual due to a lack of effective demand following a down turn. Contrasty the underdeveloped case differs fundamentally as it is born from a shortage of capital equipment, opposed to just lack of effective demand. ( Kalecki 1960 p. 3 ). As a country develops, it will move from a Marxian regime, where employment is limited by the size of the capital stock, to a Keynesian one ( Kriesler, 2012 p.33) Marx
A developed Economy is in generally said to be that of a industrialised , sovereign state with highly developed technological infrastructure relative to other nations. More recently new scales such as the Human Development Index (HDI) have been introduced. In this approach we consider three basic areas of a country Health, Education and Living standards which provides a proxy of the level of development. (See appendix A)
Interestingly in recent decades developing countries have been see to attain higher growth rates, such as Afghanistan and Pakistan. (UN, 2015). As a country develops we have observed a shift away from agricultural and towards industrial and then services ( Thirwall, 2005 p.71. See appendix B ) . Increased accumulation of physical and human capita. Leading to a change in consumer prefaces from basic to manufactured luxury goods. There also is a noted decline in family size generally, the china’s OCP being an extreme example ( Un, 2014) The classic economic approach to growth is that of a surplus as a necessary condition of growth ( Marx, Smith, Sraffa). …show more content…
Which is a physical excess of the production, which if used effectively can create a profit of which can reinvested i.e Growth. Of-course a surplus must be managed correctly if used unproductively it will become waste ( Meek, 1977) . We can also thing about Slows model of growth, adding more capital and labour with capital investment this effecting the capital labour ratio. Smith was one of the first to highlight the importance of growth along with specialisation and division of labour. (Smith, 1776) However he did not believe there was scope for increasing returns to scale in the arigricutusral sector. It is at this point many other strands of economic begin to disagree. Lewis extended the surplus model to developing economies, with the idea that from a from agriculture surplus, we feeding excess about into the labour force. Eventually leading to increased wages and the on to a shift to the manufacturing sector . Then with further development, competition and capitalism would enter the economy, leading to the formation of enterprise , corporations, monopolists and so on. (Lewis 1954). A very Darwinist like evolution. However History institutions, social and political forces specific to any economy have a big effect. …show more content…
(Holt 2007, 93). So general theory like this may not always be successful. This is one of the main criticism of the lewis model. In recent decades only a few countries such as South Korea and Taiwan have managed to shift from Agriculture to manufacturing advanced society (El Dorado) . PK economists identified some fundamental difference between developed and developing economies. Once a surplus is in effect and the growth process is initiated one issue is a shortage of productive capacity, not underutilisation. To resolve this requires high levels of investment to support capacity as well as income. Unemployment in developed economies is usual due to a lack of effective demand following a down turn. Contrasty the underdeveloped case differs fundamentally as it is born from a shortage of capital equipment, opposed to just lack of effective demand. ( Kalecki 1960 p. 3 ). As a country develops, it will move from a Marxian regime, where employment is limited by the size of the capital stock, to a Keynesian one ( Kriesler, 2012 p.33) Marx