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14 views

(ECOPE05) CHAPTER 03_081601

Uploaded by

felicildarobert7
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ECOPE05

Economic
Development
Module

Prepared by:
Dina Campos
CBA Faculty
CHAPTER 3
ECONOMIC DEVELOPMENT IN
HISTORICAL PERSPECTIVE
Learning Objectives:
Illustrate the development of Economic Development in a historical perspective

To analyze the economics of developing countries, we need some basic facts about their
growth and development, including an evolutionary biological approach to development, a
sketch of economic development in ancient and medieval times, world leaders in GDP capita
from about 1500 to the present, the origins of modern economic growth and why it was
largely confined to the West before the 20th century, non-Western growth models, the range
of growth in the last 100 to 150 years, a concrete illustration of the power of exponential
growth in North America in the last 125 years, the modern periods of fastest growth, the
economic growth of Europe and Japan after World War II, the growth of LDCs before and after
World War II, and the diverse economic performance among LDCs by country and world
region. Finally, the U.N. General Assembly perceives today’s major international problem as
the widening income gap between rich and poor countries. Has income indeed widened, and
is narrowing the gap an important goal? The last section draws on earlier sections to ask
whether income levels between DCs and LDCs are converging or diverging

Economic Development

The Pre-Industrial Era


Before the Industrial Revolution, economic development was primarily agrarian. Societies relied
heavily on agriculture, hunting, and gathering to sustain themselves. Trade was limited, and
technological advancements were slow. However, significant civilizations like the Roman Empire,
the Chinese dynasties, and the Islamic Golden Age achieved remarkable economic and cultural
progress.

The Industrial Revolution


The Industrial Revolution marked a turning point in economic history. It began in Great Britain in
the late 18th century and spread to other parts of Europe and North America. Key developments
during this period included:
Mechanization: The use of machines to replace human labor, increasing productivity.
Factory System: The concentration of production in factories, leading to economies of scale.
Steam Power: The development of steam engines, revolutionizing transportation and
manufacturing.
The Post-Industrial Era
The 20th century witnessed a shift from manufacturing to service-based economies. Key
developments include:
Technological Revolution: The rise of information and communication technologies
(ICT), leading to the digital age.
Globalization: Increased economic integration among countries, facilitated by
advancements in transportation and communication.
Rise of Multinational Corporations: Global companies operating in multiple countries,
influencing economic and cultural landscapes.

Key Economic Theories and Concepts


Classical Economics: Emphasizes the role of free markets and competition in
promoting economic growth.
Keynesian Economics: Advocates for government intervention to stabilize the
economy, particularly during recessions.
Neoclassical Economics: Focuses on rational decision-making, market efficiency, and
the importance of incentives.
Development Economics: Examines the economic, social, and political factors that
contribute to economic development in low-income countries.

Challenges and Opportunities in the 21st Century


Climate Change: The need for sustainable development and green technologies.
Inequality: Addressing income and wealth disparities both within and between
countries.
Technological Disruption: The impact of automation and artificial intelligence on
employment and economic growth.
Globalization and Protectionism: Balancing the benefits of free trade with the need for
domestic industries.

By understanding the historical context of economic development, we can better


appreciate the challenges and opportunities facing the global economy today.

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