Economists Walt Whitman Rostow's Stages Of Economic Growth Model
analytical Essay
1043 words
For a measure of development of your choice, assess its strengths and weaknesses. In the 1960s, American Economists Walt Whitman Rostow published a model in an attempt to define development, a definition that is still redefined from time to time. Rostow’s Stages of Economic Growth Model (Rostow. 1959.) define development based on 4 fundamental concepts: 1. an economic body with size and growth per capita; 2. one or two manufacturing sectors with high growth being established; 3. existence of an institutional, political and social framework to promote expansion of the sectors; 4. structural transformation from agriculture to industrial, ultimately service-based, peaking at an age of high consumption Even though the model …show more content…
In this essay, the author
- Explains that american economists walt whitman rostow's stages of economic growth model defines development based on 4 fundamental concepts.
- Opines that economic performance has been taken into consideration by subsequent models, but there has never been a model with all the flaws that can successfully quantify development.
- Explains that they will focus on the gross domestic product (gdp), an index used to measure economic development, evaluate its strength, weaknesses, touch on some case studies and finally, their view on gdp as a measure of development.
- Explains that gdp measures the monetary value of final goods and services produced in a country.
- Explains that gdp is the most widely used index for economic measurement of development, implemented in almost every country. there are a number of indexes such as gnp/i, nominal gdp and real gdp that is calculated based on the gdp values.
- Explains that gdp became the main tool for measuring a country’s economy development in the 1980s. the longstanding history and credibility is the sole reason why it is still widely used and popular.
- Argues that gdp doesn't include non-market activities and undermines the wealth discrepancies in a modern society.
- Explains frank shostak's argument that if a government embarks on the building of an economic pyramid, it will divert real funding from wealth-generating activities, thereby stifling wealth production.
- Argues that gdp does not give an indication on country’s real wealth expansion or development economically, merely a reflection of real consumption. brazil is the world's seventh largest economy by nominal gdp, the sixth largest by purchasing power parity.
- Explains that brazil is classified as a developing country under united nations, on several criteria, such as low life expectancy, high birth rate, and high death rate.
- Concludes that gross domestic product has its flaws but its credibility in assessing economic development gives policy makers and economists a reliable database to refer to. other concept and models simply do not analyze and predict the economy market and development as well as gdp does.
“GDP measures the monetary value of final goods and services—that is, those that are bought by the final user- produced in a country in a given period of time (a quarter or a year). It counts all of the output generated within the borders of a country.” (International Monetary Fund. n.d.) GDP is the most widely used index for economic measurement of development, implemented in almost every country. There are a number of indexes such as GNP/I, nominal GDP and real GDP that is calculated based on the GDP values, differentiating in adjustment for changes in market prices- inflation and deflation (Investopedia. 2015.), whether to take national ownership of business into consideration which GDP does not (Texas A&M University. …show more content…
In reality, however, the building of the pyramid will divert real funding from wealth-generating activities, thereby stifling the production of wealth.” (Shostak. 2001.) From that, it solidifies the argument that GDP does not give an indication on country’s real wealth expansion or development economically, merely a reflection of real wealth consumption. Case study on Brazil is used in this article to state that GDP does not give a true representation on the development status of a country. Brazil, the world’s seventh largest economy by nominal GDP, the sixth largest by purchasing power parity (The World Bank. 2016.), one of the fastest-growing major economies in the world, with an average annual GDP growth rate of over 5% (Blankfeld. 2010.). On paper, evaluating based on GDP, Brazil has acquired status that of developed country, surpassing United Kingdom, Sweden, most European
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- Explains that personal income-second quarter: 6.4%, disposable income: 3.1%, personal consumption: 4.7%, imports: imports that the rest of the world make and are bought by the u.s.
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916 wordsRead More - ...angible aspects and so GDP should be used as an indicator in conjunction with other measures such as the Human Development Index, Genuine Progress Indicator (adjusts GDP figures income distribution) and the European Quality of life survey. This will give a more accurate and complete picture of Standard of Living.
In this essay, the author
- Explains that gross domestic product (gdp) is the market value of all final goods and services produced by factors of production within a country. it can be calculated using either the income, output, or expenditure method.
- Explains that standard of living is the average amount of gdp per person in a country, whereas quality of life issues are more difficult to quantify.
- Explains that raw gdp figures are poor and non-comparable if they do not take into account the size of a nation's population. real gdp per capita is better when comparing countries.
- Opines that gdp figures are useful indicators of a country's sol but only look at one material dimension, that of income, output, or expenditure. they are not an explicit or accurate measure.
- Explains that the weightless economy is a key component of sol not included in gdp calculations.
- Explains that other economic activities that are not measured by gdp are transfer payments such as welfare benefits and pensions. they also do not include illegal or undeclared transactions, which may increase material sol.
- Explains that real gdp per capita ignores a country's distribution of income, as there could be some extremely rich people while the majority of the population are in poverty.
- Explains that the gini coefficient is an indicator of income equality by measuring the area between the line of absolute equality and the lines of actual income distribution.
- Explains that gdp ignores negative externalities, which are a side effect of economic growth recorded in gdp figures. environmental side effects such as pollution of air and rivers, and global warming are not recorded.
- Explains that when comparing sol and quality of life between countries, there will be inherent inaccuracies and currency causes a problem.
- Opines that gdp figures alone can be used to measure a nations sol are small due to difficulties in measurement, data collection, and comparison both within and between countries.
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In this essay, the author
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- Explains that brazil is the fifth largest country in the world based off of land size and population. it has used this demographic as a strength in its efforts to find stability in an unstable economic climate.
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- Explains that brazil's exports have been the key to increasing the economy, but their imports, such as machinery, oil, electrical and transportation equipment, have helped develop the country.
- Explains that brazil is the 73 ranked nation in development, which is in the high human development standings (undp).
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- Explains that brazil's poorly constructed and maintained roads, railways, and seaports cause three hour delays at airports and an inefficient customs service, making it 3 times longer to import or export goods to brazil than most other countries.
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- Opines that brazil's rapidly emerging market may effect this stable inflation rate, while india and russia both have double-digit inflation while china is just shy of that dangerous threshold.
- Opines that while brazil has increased its reputation in the world, it can always crash. the deforestation of the amazon rainforest could cause internal turmoil and the poverty line.
- Opines that brazil is a country growing and developing at an impressive rate. however, for every good, there is always potential problems to be faced. the future will be the telling sign of the country's success.
- Cites "brazil." world fact book. cia.gov. november 9, 2010.
- Cites breuer, mccall, and baiganchoka's article, "brazil and unasur: regional security and the nation’s worldsanding in the era of rousseff’
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- Opines that brazil's trade-buddies are based on newsweek.com and suite101.
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- Explains that inflation reduces the purchasing power of consumers, especially for retirees and fixed-income consumers. inflation also influences business competitiveness.
- Explains that unemployment is when a person lost their jobs and searching for employment. higher unemployment rate will lead to increased government borrowing, lower gdp, and loss of human capital.
- Explains that the malaysian institute of economic research (mier) has forecast gdp is upwards 6.2% in the third quarter 2017 impelled by domestic demand.
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- Opines that higher unemployment rate will result in lower gdp for the economy and loss of human capital.
- Opines that the growth of gdp will lead to lower unemployment because of increasing of job opportunities.
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