History of Economics

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Economics 515
Midterm 1

1.Economic growth vs. economic development, define extensive growth & intensive growth

Economic growth is the sustained increase in the output of goods/services of a society. Economic development is economic growth plus changes in technical and institutional arrangements by with output are produced.

Extensive growth- increase in output due to increase in inputs (labor force grows, land stock increases) Intensive growth- increase in output per unit of input – productivity increases (technological change)

2.List 2 data sources researchers use to estimate historical standards of living; three indicators of economic development other than National Income measures of interest to economists

Data sources:
Census, survey- population, demographic info, occupational distribution Tax records-production info, shipping info, exports/imports, wealth Church records- births, deaths, life expectancy
Heights/skeletal remains-

Indicators of economic development:
Life expectancy at birth- measure of well being
Adult literacy (female and in total)- measure of human capital, how productive is labor force oChild labor- high literacy = low child labor
oFemale literacy- measure of how egalitarian society is

3.Explain 3 weaknesses of per capita GNP (or GDP) as a measure of economic well-being

Doesn’t capture all economically important activities oblack/informal mkt (larger in less developed countries), agriculture (own consumption), housework (diff goods/services more often provided in home (not mkt) Dollar value of good doesn’t always = “social” value oindustrial revolution (wages↑ but pollution/disease rates↑), war (↑GDP w/out making better off), education (↑spending.. yield ↑standard of living beyond $ value) Welfare depends not only on size of national income but on its distribution Doesn’t account for differences in “cost of living” across time/space o“cost of living”- cost of a certain bundle of goods/lifestyle is not the same in different societies

GDP still most oft-referenced:
Widely available for many countries for many years (> 50 yrs, some as much as 200+ yrs) Highly/predictably correlated with all other measure of welfare

4.Describe the North and Thomas model explaining the Neolithic Revolution. Specifically, use a graph to illustrate how population growth affected this change? How is this model consistent with what we know about the transformation from Hunter-Gatherers to Settled Agriculturists?

5.Explain how the Neolithic revolution ultimately led to the formation of civilizations (list the steps in this evolutionary process), 3 characteristics of civilizations (different from just settlement). What was the hierarchical social structure of the early civilizations? (Who was at the top, in the middle, and on the bottom layers these societies?)

Steps of evolutionary process:
Invention of agriculture and domestication of animals

Hunting/farming complementary  techniques of agriculture mastered (more efficient and productive)

Extinction of mammothsHoe culture (gathering less productive than agriculture), women: first farmers, domesticated animals, cultivating grains/veggies while men hunted Trial/error in agriculture (best practices learned and passed down) Fertile crescent (Mesopotamia, Northern China, Meso-America)

Cultivation of wheat/barleydomestication of sheep, goats, pigs, cattlespread outward slowly from western Iranincreasing fertility offset gains in food supply

Acceleration in technological advancements, specialization, and division of labor: copper/gold/bronze 4000b.c.metal tools added to stoneplants under cultivation/more animals domesticatedhoes (sticks, sticks with stone blade, animal pulled plow by 3000bc)textiles (linen weaving)basket weaving/pottery for storage

Emerged from Fertile Crescent
Hunter gatherer - - -> agriculture based
oCreation of...
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