...|rather to achieve a smooth living standard over time. Consumption smoothing not only underlies the economics approach to spending and | |saving, it is central to the field’s analysis of insurance decisions and portfolio choice. | |Smoothing a household's living standard requires using a sophisticated mathematical technique called dynamic programming to solve a number | |of difficult and interconnected problems. Advances in dynamic programming coupled with today's computers are permitting economists to move | |from describing financial problems to prescribing financial solutions. | |Conventional planning’s targeted liability approach has some surface similarities to consumption smoothing. But the method used to find | |retirement- and survivor-spending targets is virtually guaranteed to disrupt, rather than smooth, a household’s living standard as it ages.| |Moreover, even very small targeting mistakes will suffice to produce major consumption disruption for the simple reason that the wrong | |targets are being set for all years of retirement and potential survivorship. | |But with this economics approach, planners can not only smooth their clients’ living standards, but also raise them. For example, they can | |determine precisely by how much living standards will rise if their clients...
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...Living standards- from 1970s to 2006 In the 1970s many people didn’t need a phone or even invest in one due to mobile phones not being as technological are they are in the 21st century. For instance the percentage of mobile phones in 1970-72 were 0%. This number then still stayed the same in 1981 with 0% owning a mobile phone. However in 2006 35% of the population did as big companies began to improve and invest in these devices, boosting consumer spending on mobile phones. In addition to this automobiles in the 1970s weren’t as expensive and again technological as they are in the 21st century, as a lot of motorways weren’t built in the 1970s yet. In comparison to this infrastructure began to improve through the decades and more people began to purchase more big ticket items such as cars as more jobs became available and the standard of living rose. This then ment that the in 2006 the number of vehicles using the motorways were 75.5 thousand, daily in comparison to only 28.5 thousand in 1971 (a big difference of 47 thousand vehicles). Moreover in the 1970s jobs weren’t at the standard wage as what they are now, a medical practionar in the 1970s earned just over £670 per week which seems like a lot but back then bread and other essentials were also a lot cheaper back then. However in 2006, a medical practionar earns over £1245. That is a huge difference of over just under 50%. This then meant that many peoples standard of living rose and so there appetites changed and people...
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...average income. Standards of living can be defined as the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area. When discussing the idea of standard of living, it is important to recognise that income per head is not the only indicator, and there are several others such as the human development index (HDI) and the misery index (MI). National income data ignores economic welfare brought about by ‘informal’ economic activity – ie economic activity that’s not recorded by government statistics (which is a large chunk of some developing countries), therefore looking at just the income per capita may give a narrow-minded view. The idea of a non-representative income per head through inequality can be displayed on the Lorenz Curve below. The green line in this diagram shows the Lorenz curve for Netherlands and Ireland. This shows that there is great inequality amongst the population, as the bent curve means a greater share of the country’s overall income goes to a relatively small number of people, hence showing that just the GNI/head does not give a good indication as the average will be significantly higher than what some people’s actual incomes are. An advantage however of using income per head as an indicator of standard of living is the idea of PPP (purchasing power parity). If income per head is higher in Netherlands and Ireland, then they are more likely to have a higher standard of living. This means...
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...14/01/2016 PART 1 Introduction Macroeconomics: Branch of economics that studies the economy as a whole, especially the overall levels of production, employment, consumption, investment and prices. Microeconomics: Branch of economics that studies the individual behavior of firms and consumers and how they interact on a particular market. Macroeconomics focuses on the following issues: - Where does economic growth come from? - Could economic growth continue indefinitely, or is there some limit to growth? - Is there anything that governments can do to alter economic growth? - What are the origins of business cycles? - Should governments act to smooth business cycles ? - What does cause high rates of inflation? - How does the central bank affect prices and interest rates? - What are the root causes of a high unemployment rate? - Should countries adopt fixed or flexible exchange rates against the U.S. dollar? To answer previous questions, Macroeconomists use theories and models. - In economics, as in other sciences, explanations and predictions are based on theories and models. - A theory is a set of rules and assumptions used to explain observed phenomena. - A model is a simplified representation of the reality based on theories. - In economics, a model usually consists of a system of equations. 1 14/01/2016 - The relationship between facts, theories, model, and predictions: Predictions Model Theories Data “If I could...
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...7 NATIONAL INCOME PART I : National Income Accounting I. Concepts & Meaning of National Income II. Measurement of National Income III. Relevant Concepts of National Income IV. Factors Affecting National Income V. Uses of National Income Statistics VI. Limitations of National Income * * * I. Concepts & Meaning of National Income National income is a measure of the total flow of earnings of the factor-owners through the production of goods & services. In a simple way, it is the total amount of income earned by the citizens of a nation. All incomes are based on production. In this sense, national income reflects the level of aggregate output. The term national income carries at least 2 meaning in economics. The total value of the level of aggregate output is called Gross National Product or G.N.P. G.N.P. is a measure of the total market value of all final goods & services currently produced by all the citizens of a nation within a period, usually a year. There are a few points important here: * It measures how much people produce. * It counts current production only. * It counts the level of output with a market value. * It relies on the market prices of goods & services as a measure. II. Measurement of National Income There are mainly 3 approaches...
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...human nature to think if we will have a lot of growth in the future when thinking about their family and friends. A lot of people normally are too concerned of what his going on in that present moment in time. 4. We have increased our standard of living by eight times since 1900. Do we need to keep increasing our standard of living now? If yes, how much more should it increase? Is doubling the standard of living every generation something that we still want? Standard of living should always keep increasing because as we all know everything keeps moving toward and becoming better. Technology is always advancing therefore standard of living will never stay constant for too long. I don't think doubling the standard of living every generation is something we still want. This is only because before technology was very slow in advancing, now its quite opposite. 5. What are the benefits and disadvantages of machines being able to take over work that is currently being done by people? There's are cernatinly some advantages and disadvantages of machines being able go take over work that is being done by people. An advantage is that there could be more production to match up demand on something that is highly demanded for a lower cost. A machine doesn't need breaks, lunch time, health benefits therefore it is more economically affordable. Unfortunately when machines are able to do work that people do there is an increase of unemployment which definitely is a bad thing for the economy...
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...Discussion Question: How do you accurately account for economic inequality in order to better assess living standards across and within countries? Discuss the factors affecting economic inequality and the implications on a local and global scale. Before even getting into the debate of assessing living standards, inequality and its measurement, let us first define income and consumption and how these measures are used to assess living standards in mainstream economics. According to Folbre, income encompasses all resource inflows to the household while resource outflows make up for the consumption variable (Folbre, 2009). In today’s world, living standards are assessed by looking at either of the two measures; however, most people agree that looking at living standards from the consumption angle gives us a better, more accurate feel for disparities. That being said, we recognize that these two measures do not provide a full picture: we look at resource inflows and outflows to and from households; however, we do not take into account what actually happens within the household. In recent years, more and more economists have shifted their attention to those non-market factors that directly impact standard of living among the population. In the following paragraphs, we will first examine how economic inequality is currently measured and the limitations underlying those methods. We will then elaborate on the additional parameters (household production and leisure) and their importance...
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...Some perspective Minimum wage work is not distributed equally in Ontario: women, racialized workers and recent immigrants are more likely to be working for minimum wage. In 2011, the share of racialized employees at minimum wage is 47% higher than for the total population – 13.2% as compared to 9%. Fully 19.1% of recent immigrants are working at minimum wage, more than twice that of all employees. Young workers are much more likely to be working for minimum wage than those who are over 25. But almost 40% of the 183,000 Ontarians working for minimum wage were 25 years of age and over in 2011. The share of adult employees at minimum wage more than doubled between 2003 and 2011. However, the pace of increase was even faster for racialized adult employees and adult employees who are immigrants. Further, almost a million Ontarians are making between $10.25 and $14.25 an hour. The age distribution of low-wage employees shifts at this range: 61% of those making $10.25 to $14.25 are 25 years of age and over. The assignment This assignment...
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...light, darkness, sea, stars, birds, and animals. God created a man and named him Adam. God created a woman and named her Eve. Adam and Eve were put in the Garden of Eden. The Garden of Eden was filled with fruit trees, animals, and there were river flowing all the time. In the Garden of Eden, Adam and Eve had plenty to eat. They did not have to work nor make money. Adam and Eve were naked but they were shameless. Adam and Eve did not have much to worry about. In the year 2001, we are living in the garden that is embedded with various scientific stuffs. Let’s just take a look at my life. Few years ago, I used the typewriter to write papers. Now, I am using a computer to write the paper. In the morning, the alarm clock wakes me up. I turn on the faucet to get water to brush my teeth. I pour out already brewed coffee from programmed coffee maker. I drive a car to get to the places. I wash my cloth in washing machine and dry them in the dryer. I don’t wear eyeglasses anymore because I am wearing contact lenses. Furthermore, this winter break, I am planning to have Lasik operation to correct my vision permanently. Then, I could say goodbye to my contact lenses. This is the sketch of my life, but just a part. I am living in the garden with full of scientific devices that I could no longer live without. Wow. How did we get here from the Garden of Eden to the Garden of Science? What makes the world to become such a science oriented society? What drives human beings to seek scientific...
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...Gwen McFerran Mrs. Cullen AP World History May 24, 2017 Living in West Berlin vs East Berlin: Thesis Paper The Berlin Wall was built in the August of 1961, when the East German soldiers constructed more than thirty miles of a barbed wire barrier through the center of Berlin, Germany. The citizens of East Berlin not allowed to pass into the Western side. Soon, concrete would take the place of this barbed wire. (Taylor, 458) East German authorities thought that this wall would protect their citizens from the influence of the capitalist system that was occurring in the west. In the west of the world, the Berlin Wall was just like a symbol of communist oppression. The Berlin wall was the biggest boundary separating two worlds; the totalitarian...
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...and the faster long-term growth in standard of living | (Makin, A.J., 2002, p.10) | | | | Sanjeev Henny s2760582 Yu-Ting, Lin s2672341 Yen-Ting, Lee s2768300 World count: 985 | With the increasing globalization of most economies, there is consequently more focus on understanding how international integrations influence macroeconomic performance. Economists use numerous indicators to measure the degree of an economy’s openness. One of the common indicators is the percentage of trade as a share of gross domestic product (GDP). It is the sum of exports and imports of goods and services measured as a share of GDP. (World Bank, 2013). This essay will firstly generally examine the degree of openness for various countries by using the percentage of trade as a share of GDP. It will then outline Singapore as the most open country, Brazil as the least open country and the most rapidly increased openness: Hong Kong. Finally, it will examine whether the degree of openness is correlated with faster long term growth in standard of living. In advanced economies, there are many kinds of methods to analyse an economy’s openness. There has been one commonly used indicator which is the percentage value of the sum of exports plus imports as a share of national product. (Makin, 2009, p.8). Therefore, the feature in the data that we have complied is using the value of the sum of exports and imports divided by GDP times hundred. With this resource we found...
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...• Standard of living tells how fine or how unwell an individual or group of people lives in terms of having their needs and wants met. It includes the factors like income, availability of employment, class disparity, poverty rate, affordability of housing, literacy, political stability and all factors like that. • Economic growth helps in increasing consumption, improving public service, reducing Unemployment and Poverty which leads to indirectly increase our living standards. • Economic growth is measured by increase in GDP or GNP. Economy can grow by two methods one by using more resources or by using same amount of resources more efficiently or effectively. And if the economic growth is achieved by using more productive resources it will result in increasing per capita income thus...
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...movement of trade, investment, labor and capital. The drive for globalization has resulted in greater economic growth globally, through the opening up of barriers to international trade, yet this increase in world output is often associated with detrimental effects in relation to the stability of a national economy, being susceptible to the ups and downs of the international business cycle and also both positive and negative effects on the standards of living or quality of life with in a nation. It is often difficult to categories an economy as being globalized, yet there are several key indicator that suggest economic management decisions undertaken by the govt have come as a result of globalization. The main evidence to suggest the globalization of nations has been the growth in global markets, changes in global consumption patterns, the establishment of intergovernmental agreements as well as the rise of transnational corporations. Globalization has been essentially driven by the breaking down of economic barriers between nations over recent decades that have resulted in greater worldwide economic growth. This economic liberalization has been spurred on by the global trend towards the deregulation of national economies as well as reforms to encourage greater competitiveness with in the global markets. As a result of the microeconomic reforms,...
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...1970, the 2011 HDR draws attention to evidence that raises questions about the sustainability and distribution of these benefits. Human Development Index: Encouraging Progress Most countries have made great strides in living standards over the past 30 to 40 years. The UNDP’s Human Development Index (HDI) increased, on average, by 41 percent overall and 60 percent in low HDI countries since 1970. The HDI country ranking is divided into four quartiles. The first quartile, or top 47 countries with the highest HDIs, is labeled “very high human development.” The remaining three quartiles of country groupings are “high human development” countries, “medium human development” countries and “low human development” countries. From 1980 to 2011, average HDI scores increased by 16.1 percent, 20.7 percent, 50.0 percent and 44.3 percent for very high, high, medium and low human development countries, respectively. The table below presents HDI data from the 2011 HDR for a select group of countries from each development category. Green Revolution The Green Revolution in agricultural productivity is one of a number of important factors behind the dramatic rise in living standards. With only a 10 percent increase in cultivated land, agricultural output doubled over the past 50 years. In Asia, the Green Revolution “doubled rice and wheat yields between the 1960s and 1990s through the introduction of high-yield plant varieties, better irrigation and the use of fertilizers and pesticides...
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...10 Principles of Economics Supply and Demand * Supply and demand are inversely proportional: When supply rises, demand falls. For instance, when the housing market in a certain region is flooded with homes for sale, sellers drop the price to attract a buyer. However, single homes for sale in exclusive neighborhoods might have more potential buyers than sellers. In these instances, the price of the home rises. Inflation and Unemployment * Gregory Mankiw, Harvard Economics professor and author of "Principles of Economics" explains that society experiences a short-run trade-off with rising prices and unemployment: As the monetary supply expands and inflation occurs, unemployment rises. However, the Phillips curve indicates that in the long-run, inflation has no bearing on levels of unemployment. Effects of Price Controls * Price controls, like setting food prices in the former Soviet Union or rent control in New York, have negative effects for both buyers and sellers. Price ceilings create shortages and rationing of goods, and price floors create disincentives to improve on the quality of a good when it cannot be sold at the equilibrium price. Elasticity * Elasticity measures price responsiveness of a good or service. If the demand for a product changes significantly when the price changes, it is considered elastic. Examples of elastic goods include makeup and concert tickets. Inelastic goods show little or no change in demand when the price changes. Examples...
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