Question 1

Understanding economic development issue also entails understanding the measures of economic development, income inequality, poverty, and dependency, among others. Hence, for this question you should compile the following information from the Human Development Report 2016, Human Development for Everyone, which is available on the Internet athttp://report2016.archive.s3-website-us-east-1.amazonaws.com/ and answer the questions below. For your convenience, an electronic copy of the report is provided in the same folder as this assignment.

	Uganda	Brazil	India	Canada	Germany
2015 GDP per capita (2011 PPP$) pp. 234-237
2015 GNI per capita (2011 PPP $) pp. 198-201
2015 Human Development Index (HDI) pp. 198-201
2015 Gender Development Index (GDI) pp. 210-213
2015 Life expectancy at birth Female (years) pp. 210-213
2015 Life expectancy at birth Male (years) pp. 210-213
2015 mean years of schooling Female pp. 210-213
2015 mean years of schooling Male pp. 210-213
% population living below income poverty line (PPP$1.90 a day 2005-2014) pp. 218-219
Population living below income poverty line using national poverty line 2005-2014 pp. 218-219
Gini coefficient (scaled to lie between 0 and 1) pp. 206-209
2015 dependency ratio young age 0-14 per 100 people ages 15-64 pp. 222-225
2015 dependency ratio old age 65 and over per 100 people ages 15-64 pp. 222-225
Average annual population growth rate (%) 2010/2015 pp. 222-225
Human development category (low, medium, high, very high) pp. 222-225

1. What is PPP? Why is it necessary to express GDP per capita (or GNI per capita) in PPP US$?

1. What is Gross National Income (GNI)? How is it related to Gross Domestic Product (GDP)?

1. Which country has the highest incidence of poverty? Why?

1. What are the differences between income poverty and human poverty?

1. Explain the meaning of a Multidimensional Poverty Index (MPI)? What are the limitations of the MPI as

a measure of poverty?

1. What country do you consider to be the most developed? Explain based on the statistics compiled above.

1. Which country has the highest dependency rate for (i) young age (0-14), (ii) old age (65 and over), and

(iii) combined young age (0-14) and old age (65 and over)?

Why are high dependency rates of concern to development economists?

1. Comment on the gap between Canada and Uganda by (i) dividing the GDP per capita for Canada by the GDP per capita for Uganda and (ii) dividing the HDI value for Canada by the HDI value for Uganda. Which measure indicates a greater disparity between the two countries? Does GDP per capita over-exaggerate the economic development gap between Canada and Uganda?

1. Plot the Gini indices of the five countries (vertical scale) against their levels of per capita GDP (horizontal scale). Is the resulting graph consistent with Kuznets U-Curve hypothesis?

1. What are the problems associated with international comparisons of income inequality?

1. What are the problems associated with international comparisons of poverty?

1. What are the problems associated with international comparisons of GDP per capita?

1. How are the Lorenz curveand Gini coefficient (or Gini index)used to convey information about a country's income distribution?
2. According to the 2016 Human Development Report (see pp. 198-201), Pakistan fares more poorly in the HDI ranking (148) than in the GNI per capita (PPP US$) ranking (138). Argentina fares better in the HDI ranking (45) than GDP per capita (57). Are these results surprising? How would you explain the discrepancy in the rankings?

1. What are some of the problems inherent in measuring economic development, as opposed to economic growth?