Transcript for:
Economic Development Overview

welcome to chapter 5 which talks about the economic development what does this mean um we'll just jump straight into this okay so econom Economic Development sort of talks about the population as a whole right you're talking about an individual person in the entire economy so here we look at living standards we look at poverty we look at the population as a whole and we looked at developed and less developed economies and in fact the first subtopic that we're going to be covering is is the living standards and why is living standards important to the government because remember we are still currently talking about macroeconomics and this is still part of the macroeconomics um topic so why do we care about the living standards right as a government why should I interfere within someone's living standard okay so we'll start off with the definition of what living standards are and um in fact let me just but the topic right here this is living standards okay so first of all living standards what is living standards living standards or a standard of living or however you want however way you want to say it um is is this this is the definition right so living standards or standards of living refers to all the factors that contribute to a person's well-being and happiness okay and again that begs the question why does the government care about this why why does the government care about a person's well-being and happiness in fact that answer will be uh will be given to you after you kind of watch this video and we will learn and kind of answer that question as we go along but before we we we go with that how can I measure living standards you know how can they be a like unit uh to measure this because economics always deals with analysis economics always deals with kind of finding using statistics and making conclusion out of it so I can't just be like oh my population is Happy the living standards are good you can't do that so therefore we need to find a way to measure these living standards and that's where it comes into play how to measure the living standards there's a way to measure the living standards and this is by doing the GDP per head remember this from the last topic GDP per head what is GDP per head GDP per head measures the income per person in an economy right so that is called GD DP per head that is what we mean by living standards we don't mean by we don't we don't say oh is how how some how happy someone is or how this someone is right that is not living standards in the economics terms the living standards is the income and that's all we care about what's the average income so the living standards or measuring these living standards measures the average income per person in an economy and that is in fact what we call or that is a that is how we actually measure this living standard now why do you think you know we should have uh or or what's the use of a GDP per capita why do we use a GDP per capita to measure living standards because how can we relate GDP with living standards right how can we kind of relate these two together and and let's kind of answer that so this part is now how or the merits of using GDP per capita to use uh to kind of measure these living standards let's start with the first one and the first one is GDP is a useful measure of the total production taking place right remember we talked about the definition of this in the previous chapter GDP which is gross domestic product is a useful measure right it's a useful measure of the total production taking place in the country remember we look at the output we look at how much output is actually produced in this country and so it indicates the material well-being of the economy what does this mean that means that let's say my economy is very productive what does that mean that could mean a lot of stuff one maybe there's a high employment rate which is making the output kind of increase another thing you can say is maybe people have a high enough income to have a high enough demand to have a lot of circulation within or a lot of money supply within the economy remember we talked about these policies we said that if there's money supply we are happy the government is happy if there's money supply moving around if there's you know something that are con L happening within the market that is very good and I can measure this living standard using the GDP according to how much output is being produced by the economy I can make a judgment of the living standard that's what it kind of means okay now remember GDP is calculated on output so it kind of is a good indicator of how many jobs are been created because remember we had this correlation in the previous chapter that if we have more output then most likely there's more jobs open because we connected employment and we connected it with uh you know the output so that's why the government is always happy with output that's why we talked about economic growth and that's why it's such an important um concept of Economics that economic growth kind of deals with output but this output is very very important for the entire economy as a whole okay and last but not least is GDP is already available okay GDP is a metric that's kind of used in a lot of stuff by the government GDP is used to make predictions for the future and so GDP is already readily available so it has the population data why not use it to measure the living standards okay if you have noticed the way I'm kind of introducing every topic is by first mentioning how we measure it and it's very important in in order to measure something because when we went in the previous chapter what was it um when we talked about the economic growth when we talked about inflation deflation we kind of also discussed how to measure this when we talked about employment did you remember that we talked about how to measure employment we talked about how we can do different types of ways to measure the employment one through surveys uh two by looking at how much um you know the income tax and stuff like that so we need to look at how much we need to look at how to measure this as well because that's also very important for the government's point of view now there's also a disadvantage of using GDP um to measure these living standards and we kind of have to also talk about that so now let's have a look at the limitations right those were kind of the benefits of GDP what about the limitations let's look at the limitations now the first limitation it takes no account of what people can buy using their income just because I have a I have a high output right just because my economy has a high output that does not mean I have a high income right there there's no correlation over there a country with a high GDP okay may not also be better with some low GDP they could all be the same right because let say I have a high output but let's say I have fewer products to choose from is that good living standards no right because when we talk about living standards I want to kind of Def Define this properly when we talk about living standards we're kind of talking not only about my health not only about my output not only about my income not only about my employment but rather everything that involves in the economy how much products can I pick from what is the demand what is the supply what is the healthcare what is my employment rate what is the inflation in this country that revolves around living standards okay so similarly another reason to why GDP is not that good way to measure living standards is because GDP does not consider changes in technology because some countries that have a big change in technology can in fact impact the living standard because let's say people with with might have had a more income they might have had more income than but they couldn't benefit from all of the technology available today maybe they couldn't benefit all with all of it from all the technology that they had so that's another disadvantage with GDP right that's another disadvantage on why we don't use GDP or or in fact why GDP is not a good way to measure the living standard another reason to why GDP is kind of a disadvantage is because it excludes the unpaid work people do because let's say right GDP kind of only measures the output per of the entire economy what about the people who that's not working what about those people right it just excludes them right because there are people who do unpaid work right there's unpaid work not everything because GDP only deals with output right what about the people who are providing a certain service without getting paid for example volunteer volunteer organizations right that is impacting my living standard that is improving the living standard but why is it not being included in the GDP because the GDP only measures the output of of certain businesses okay now the most main important point that you kind of need to talk about is that living standard does not only the measure this living standard does not only include you know what's happening in the economy in terms of uh what's happening with the trades what's happening between my working what's happening between that but it also monitors laser activities it also monitors Health it monitors education levels Environmental quality because all of this contribute the people's happiness and this measure does not do that right now okay so this measure simply just doesn't do that and I can put that as another reason to why we don't use GDP to measure or why we shouldn't I don't know okay we we we don't need to get into what how how we do it right now we just need to look at the advantages and disadvantages and compare the two okay so those are the reasons or the limitations in fact uh of using GDP per capita to measure the living standards I'm hoping by now right I'm hoping by now we have not kind of directly involved with what living standards are but I'm hoping from you know these kind of advantage and disadvantages you're kind of building a concept to living standards and why the government kind of really cares about this right because you don't have to only look at it in terms of just how much is happening in the economy What's the employment rate because employment does not mean you know happiness for someone okay there could be many other many other factors like we said like relia activities and so on so forth right the health so on so forth okay so not only the activities that are happening in the economy kind of affects this okay now we kind of come to a concept that is uh currently used in today's economy um and and there's something called the HDI okay which was kind of developed uh or kind of used by the United Nations so let's kind of talk about this because we use this index to measure the living standard of a certain country and I find it very interesting because this is how they do it first and foremost what does HDI mean HDI is a human development index and what does it do it is used by the United Nations currently to compare living standards across several countries okay now this HDI gives a value right it's it's it gives a value and this value is from zero which is the lowest and to one so it's value between 0 to one right this is what the HDI does now how does this HDI work this HDI looks at several factors in a certain economy or in a certain country and it kind of gives a score for each one of them and let's look at each one of them right and the first one it looks at is the income index and if you've noticed we've been talking about income in a lot of this part even though this is not just kind of directly talking about living standards but income is a very big factor of living standards okay so the first one is income index okay we're kind of measuring that income index which is measured using the average national income so what is the average national income of my country and why is the income related to living standards because remember if I have a higher income that means I have more money to spend on laser activities I have more money to depend on myself right so income kind of does have a correlation with living standards okay so a higher average income in a certain economy means there is a higher chance so they're saying it's called gni per head okay which is the national income per head when I look at this when I measure this then therefore I can see this average income in my country and give a rank to that the next index that I look at is the education index okay education Index right which is also a very important aspect of economics and a very important aspect of living standards because remember if I have education then that means I have the required skills and remember if I have the required skills that probably means that I have a higher chance of having an employment rate that's kind of high so the education index is talking about how many years have I spent on education how many years of schooling have I kind of spent and that is what the education index measures so so far we have the income index and we have the education index and the L index is one of the most important ones as well which is Healthcare index okay so we have income education and the healthare healthcare is kind of generic Healthcare is simply the average expect expectancy that you are kind of expected to live from birth so that is called the healthcare index so this United Nations which uses this h looks at these three factors they look at these three factors and then they make a decision okay so so far in this topic what I'm trying to kind of say we are looking at the different ways to measure living standards the first way or the first one was through GDP the second one is through the HDI okay and the HDI is what we use currently in this economy from the United Nations and we're looking at the advantages and the disadvantages of each of one of them because remember economics deals with analysis economics deals with looking at all the plus sides looking at all the negative sides and that's a very important concept to actually kind of learn because in your exams you're also doing the same thing you're analyzing that question and you're giving the positive side you're giving the negative side and if you've watched one of my videos and how I analyze these questions I kind of look at it in the same way I look at the positive side I look at the negative side so that is HDI and I'm hoping you kind of understand what HDI is so far right it's very simple to kind of understand it gives a scale from 0 to 1 and it looks at these factors and makes the decision now let's look at these benefits why do we why why HDI is in fact a very good method of uh measuring living standards okay so we're going to do the same thing that we did with GDP the first one which is a very big benefit is that it takes account into some major indicators of living standards when you think of Life what's the main thing that you kind of look at first thing is I should have an income so that I can fulfill my needs because everyone needs money and money can do a lot of stuff right money can in fact give you a good Healthcare money can give you good education money can fulfill your wants so money is a very important factor the second important factor is an education because you can only get usually employed the generic way through an education right what you are watching this video is very useful because you are part of the education system and the third most major indicator is the healthare because if you have a good health then that probably means that you have a good living standard or give good living condition I because you can afford to you know take care of yourself so the HDI which the GDP does not take into consideration takes into consideration the most major factors GDP does not take into consideration of the healthcare does it right so this one does next it recognizes it is not just output unlike GDP but also what is the social factors okay so it doesn't just talk about output output does not mean that there's good living standards right just cuz I'm employed does not mean I have a good living standard right but rather I need to have a good health because a lot of people work there every day but that does not mean they have a good healthare okay so social factors is what it kind of looks at kind of deals with another benefit it is a useful method to compare Global living standards that means that as you can see if I go through every country and I look at these certain factors it's a very equal way of deciding who has a good living standard because I'm looking at each one of them one at a time so I can kind of compare This Global living standards okay the next one it's very useful and it's very reliable because it is produced by the United Nations which is widely used and recognized right so that means it's reliable because it's from a good right you know it's a good uh foundation and it's much more useful and reliable compared to a GDP that could be skewed in one way or another way okay so those are the benefits of the HDI what about the limitations of HDI let's kind of look at the limitations now because with the advantages always comes the disadvantages with the benefits always comes the limitations so let's look at the limitations now if it can paste kindly uh why is it not pasting okay there you go okay let's look at the limitations of HDI to compare the living standards now now first and foremost it's bad because why it combines a set of separate indicators into one because how can I compare education or literacy rate with Healthcare that's not a must that's that's not a must for a good correlation so several separate indicators all into one could be a problem second of all is there are um the gni which is the income per head does not say anything about inequalities in the income and wealth within the countries okay because if I calculate the average income per head of the entire country does that tell me about the inequality does that tell me about how many poor people that could just mean there's one very rich person who is contributing in the average against many poor people right but we are not going to be seeing the poor people side because the rich people's average income kind of makes the entire country look better from just many rich people and maybe it could be the fact that let's say for example the country India which has a massive population let's say there are very a lot of rich people as well those rich people are so rich that they make the average go so high that the poor people are kind of ignored because you can't really predict that okay so that could be also bad another factor or another reason why it's a limitation is because it doesn't consider other factors such as Environmental Quality stuff that the G such stuff like even the GDP doesn't do right it doesn't look at the Environmental Quality it doesn't look at access to drinking water you know the basic basic stuff okay and last but not least the HD information for all countries may not be available okay not every country has information about the healthcare not every in country has information about the education system so that could be another Factor because let's say I have the average income but I don't have two other factors how can I make a conclusion okay so this is um that's basically the HDI and that's how I can explain the HDI okay now um that being said we looked at two ways to measure uh living standards we looked at the advantage and the disadvantages and uh we kind of made a conclusion of kind of what living standards are right we kind of looked at everything as a whole topic and kind of made a decision on what exactly is living standards okay and we can finally answer that question to you living standards kind of deals with everything from a day-to-day person's life okay that means the income the healthare the environmental factors right everything that we kind of talked about in these advant and disadvantages is what makes up living standards now that begs the question why do different countries or different economies have different living standards and a different income why is that why why do why is there difference in living standards right because if you think about it the whole world should just have the same living standard because we are humans humans all act the same right so why why why is why is it that you know it's different okay and therefore now we're going to answer your question over there so the reason reasons for the difference in the living standard is now our next subtopic that we're kind of talking about now and the first one is the difference in living standards within a country why is there a difference in living standards within a country now there's several reasons to why this can be you know um this could be a reason okay why someone might have a high living standard why someone might have a low living standard okay so let's kind of look at that the first one is the regional variances in income and consumption okay and what does this mean okay first of all is that major type of jobs right for example some regions have higher incomes okay some regions have higher incomes Education Health Services because of the manufacturing and service heavy regions for example if you think about it the main cities have a lot of opportunities in terms of employment so that has a higher chance that I have a higher income and if since it's a big city there's a higher chance I have a higher education if it's a big city there a lot of people working there higher chance of having a good Health Service System there okay so this all contributes into the major types of jobs and this all contributes into the HDI okay the next one is the fact that the different government provinces of the different states so for example that of course each state or each country is subdivided into different parties and how that is controlled is of course going to be different from one region to the other region and that's how we kind of measure that because some local government provinces of education and health can make decisions in different ways okay so those are the reasons to why they're different within a country okay so even within a country it's kind of different because of different regulations different rules some governments could be some local governments could be better than other local governments and so on and so forth and that begs the question why is there a difference in living standards between countries let's kind of answer that now so I kind of we kind of know why it's within the country but why within different countries so now let's have a look at the difference in living standards between countries the first one is the productivity of Industries okay so that means that some Industries are more productive than the other okay and we always kind of deal with productivity in terms of output because if I am very productive that means I am making a lot of output if I am making a lot of output we always usually relate this to economic growth we we relate economic growth into a higher employment rate higher employment rate is higher income higher income is a Better Living standard you see how I beautifully connected everything together so that is one reason to why productivity of Industries are one and in fact when we start doing questions which I'm hoping to do in a future time but when we start doing questions everything is kind of like a link it's all linked based right and and you'll see how beautifully everything in economics is kind of linked and the way I just linked everything is just beautiful like that where every concept of Economics is linked to one another and maybe that's how I have been taught and I'm trying to teach you guys that that economics is a chain it's a chain of series that's kind of linked within each other another reason to why the living standard could be different between countries is the fact that many countries have different gdps meaning different Capital per income and that means that someone with a higher income would also could mean because of how much that certain good is being produced for example certain countries where they produce more oil and stuff like that that means that they are in high demand and therefore since they have a higher demand they have a higher output and I'm hoping that's kind of I'm hoping you kind of are seeing the correlation here because what that simply means is that countries that have scarse resources in their economy have a higher chance to have a higher output and remember I always kind of looking at output with living standards it's kind of something that I'm hoping you've noticed the pattern that every time I talk about output I'm talking about living standards okay so major industries like these countries have some of the higher capita because they have these scarse resources in their country which are very much in demand internationally so these certain countries can have a better living standard because of the fact that they have scarse resources within their country okay and that's one other reason to why there's difference in living standards between these countries okay the next reason to why there could be a difference is the ability of citizens to pay taxes which simply means that sometimes some countries ask for a lot of tax okay usually developed countries they ask for a lot of tax and the reason why if I have a lot of tax the government can actually use this tax money to start investing in the infrastructure of the economy in fact another thing that you need to kind of consider is that many economies are corrupt right and it's kind of not discussed in the notes here or in the syllabus but I'm kind of just trying to explain that this is a big fact that in some countries not everyone pays the tax to the government and therefore the government does not have enough money to spend into the economy another way to look at it is some governments they get the money but they don't spend that money back into the economy they spend it on themselves which is always corrupt so that's where corruption comes into play and that is such a big disadvantage for the entire economy okay so that could be another reason for why living standards could be less because the government is not doing their job properly okay another reason another difference in the living standards I want to talk about is war crime natural disasters people with natural disasters could impact their health the ones where there's a lot of war and crime within countries can impact your health could impact your education could impact your income it all comes all hand in hand okay so you kind of need to talk about all of that kind of parts of of um when it affects the living standards and I'm hoping you've kind of understood what living standards is and I'm hoping this introduction of living standards is quite good so that is it for living standards right that's kind of all we talk about living standards and now we move on to the topic of poverty which is not a big topic it's kind of a small topic but it's very important that the government kind of deals with what poverty is because poverty is a very very big challenge that the government faces and every economy kind of faces which is poverty now within poverty we have two types of poverties we have something called the absolute absolute poverty and we have something called the relative poverty okay we have absolute poverty and we have relative poverty I'm kind of going to Define both of them okay let's start off with absolute poverty absolute poverty is the inability to afford basic necessities the most basic ones water education healthare shelter food the most basic necessities I cannot afford it okay so this is called absolute poverty what about relative poverty relative poverty is a condition of having fewer resources than other people in the same society that means that you're not absolutely poor like you don't you can still buy water you can still buy stuff but compared to other people compared to your entire economy within the economy you have a relative poverty okay so relative poverty is basically a measurement of income inequality that means if I'm in a country of rich people for example let's say I'm in Monaco okay I live in Monaco and Monaco is a very rich country compared to the people in that economy I could have they could have relative poverty and it's very important that we look at poverty in two types of different ways absolute poverty and relative poverty so that's kind of the difference between the two okay let's now look at what causes poverty why is poverty what you know what exactly causes this poverty okay and let's kind of talk about that right now so what causes poverty okay because poverty is always bad right no economy wants this no government wants this but what causes this and there's several reasons to why it causes it and the most basic one is unemployment when I have unemployment I have no income when I have no income poverty because I cannot afford basic necessities and and so on so forth I'm kind of just going to take that off right I'm just going to take that off unemployment equals to Poverty let's look at the next one low education levels when I have a low education level I don't have the required skills to get employed right so I don't have the necessary skills to get employed because I'm uneducated and unskilled then that means it's harder to find jobs harder to find jobs means I have no income no income means I cannot afford the basic necessities tick let's look at the next one the next one is size of a family which is actually a big impact because for example the more family members I have the more I have to kind of provide for them meaning I'm earning one income but I have to distribute it for the cost of living for my entire family so because of that because I have to split my money for my family members I could have poverty right because I could not have enough for everyone I could have enough for me because I'm the only person working but not for everyone the next one is the age is that older people are likely to have more health problems and therefore I cannot be you know willing or I cannot be right for employment let's say I'm not very fit to be employed which could mean my income is low so therefore age is another Factor take that off that causes poverty as well next poor government support this is a very important one is because some governments in fact give money to the people who are unemployed just so that they don't kind of suffer and they don't fall into the poverty line and they try to get them back up on their feet and start working in it so poor government support could be a reason to another why another reason to why poverty happens the next one is lack of poor health or poor health kind of self-explanatory poor health poor health means I can't really work because I'm kind of um you know ill that it not is making me able to work so poor health defines or poor health kind of leads to Poverty another one is overpopulation and you might have already known this through general knowledge overpopulation it's very difficult for a government to even handle a population of such a big size and a high population density means that's a lot of um a lot of pressure on scar resources right and for the economy may not be able to produce for everyone okay or if they do produce then they produce at very high prices because they only give to the people who are able to produce so the people who can't afford it they will just go into more poverty okay so that are some of the reasons to why it causes poverty and how can I kind of fix poverty what can the government do to kind of fix poverty and now let's have a look at that so the government looks at some policies in order to fix poverty and that's what we're kind of going to discuss right now what are some policies that help fix this little topic of poverty or not even little but a big topic and the first one is the introduce measures to reduce unemployment how can I reduce unemployment there's several ways you can reduce unemployment and the first one is using the expansionary Physical policy fiscal policy we have talked about this what does this mean this remember expansionary fiscal policy always increases the demand increasing the demand will increase employment because I would probably want more output more output means more employers more employers means higher um better employment rates so improves living standards next one is to impose progressive tax we talked about progressive tax when we talked about taxes basically progressive tax is simply when income increases tax increases so the people with higher income have to pay more tax and now this government can use that tax to help the poor people next one is to introduce welfare services in fact a lot of government does this is using those tax money that I previously mentioned above is use the money from the tax and give to the people who are poor just so they can get back on their feet and get back to working and get back to having an employment next you can increase the qu quantity and quality of Education how can you do this you can do this using the supply side policy the supply side policy kind of tackles education as of a whole that's why you really talk about supply side policies a lot okay and that is the topic and that is the topic of poverty and pretty much that's kind of it we talk about poverty we talk about how poverty is caused and how to fix poverty and kind of the two types of poverty it's a very small topic so it's not you don't have to go into so much detail into that okay so that is poverty let's go to the next topic we kind of are done with poverty now and we now talk about the population we talk about the population and this might seem like a topic that's kind of not relevant to economics but it is in fact very relevant to economics so when we talk about population we're not talking about geography or maybe we are actually because it's kind of linked population is how many people is living in my economy and the government really cares about this because stuff can affect this population there's a lot of factors that affect population now this government wants to keep their population in a stable rate they want to keep it in a way where I can manage them because if my population is too high then it becomes very hard to implement regulations very hard to implement rules and stuff like that which is bad for the economy so therefore we look at several ways on the population and we look at several other factors that when we talk about population we have to talk about so let's start off with the factors that affect population and when I mean factors that affect population I mean by why is my population so large why is my population so small so on so forth we first need to Define this term called birth rates birth rates is the rate or the average number of children born in a country each year compared to the total population of an economy so this is what birth rate is so before I go to the factors that affect population you need to kind of know this um definition because we kind of use this so factors that affect population under factors that affect population we need to learn why do different countries have different birth rates okay why do different countries have different birth rates why is some some countries you know birth rates higher than the other one meaning why do some average number of children born higher than the other countries and we'll start off with the first one which is living standards talked about this we know this is that if I have a more improved quality and availability of food clean water medical care which will result to fewer babies dying fewer babies passing away and countries where children often die due to poor living standards have higher birth rates because people have more children fearing that some children might pass away okay it's the harsh real reality of life but that's how it works because the poor the conditions are so bad that they you know give out many kids because of the fear that they might lose some and in fact a lot of times is um a lot of a lot of families use kids in a way to help them in their own day-to-day activities for example children can be used to help in farms children could be helped could be used to you know you give an education to your child and your child can then support your family so giving more children could even affect that so countries with a very bad living standard usually have a higher birth rate the next factor is contraception which simply means is that there's an increased use of contraception if there's an increased use of contraception which would have fewer birth rates it's kind of self-explanatory um so those countries that have contraceptions or you know have legalization of abortion have a reduced birth rate they have a reduced birth rate and this is usually in developed countries where people use contraception and people are kind of um it's it's legalized to abort in several conditions in several factors so therefore they should be lower birth rates okay the next factor that affects birth rates is in fact customs and religion which is actually a big part and you might be surprised but religion does Take A Part into birth rates So Many religious beliefs don't allow the use of contraceptive pills a lot of um religions uh don't use that because it's unnatural and therefore that could lead to um large families could lead to higher birth rates okay uh next is the changes in female employment which simply means that usually if the females are in countries where they're in the labor force then it's kind of difficult to get babies as well because managing a baby and working at the same time is kind of difficult so usually they opt not to have kids at that during at that time so that affects the motherhood and because the motherhood affects their careers so they kind of um resist or kind of do not want to get kids at that certain age or at that certain time so that could also affect the birth rate okay so that's all we talk about when we talk about why the countries have different birth rates let's now look at the different the next metric which is death rates okay which we kind of um look at population in terms of two metrics which is the birth rate and the death rates okay and then we kind of look at the population structure in terms of male and female and then we kind of look at why does the population size increase what are the effects of that that's kind of what we talk about in this topic so now let's look at death rates what is death rates death rates are simply the number of people who die each year compared to every 1,000 people of the population so you need to know this definition you have to Crime this definition so death rates so death rates are the number of people who die each year why are they different for different economies let's now answer that and it's very very similar to birth ratees so I'm kind of not going to waste a lot of time in this but the reasons for deferring death rates in different economies let's look at that the first one is living standards same thing like the other one if I have a Better Living standard that means I have a higher life expectancy if I have a higher life expectancy that means if you're death rates lower death rates next one is the medical advances of healthcare what does this mean if my certain economy has a better technology for my healthare then that means I am more likely to be cured if I have any illness which leads to less death care okay leads to a Le sorry a less death rate because I could be cured much more easier because of the technology that's within the economy the next factor is natural disaster and Wars a lot of countries or certain economies have more like natural disasters more Wars so there's a higher chance for the death rate to be higher in those certain countries and that's a factor as well okay so those are some of the factors to why death rates um are affected in different um countries a small topic that you need to kind of talk about is why there's something called migration and you kind of need to talk about it in this topic migration and you might have talked about this in geography if you do geography migration just involves why people shift between different countries why do someone try to shift between countries and there's three basic factors uh that we look at in economics for migration and the first one is people move to different countries could be because of living standards if I want a Better Living standard I move to a different country so that's one they do move because of employment because if people want better job opport unities they move into countries that give that opportunity to them so I would migrate because of that and second and thirdly is climate climate could be a factor that I kind of you know are is changing for the employment so that is another factor to why I kind of migrate so that's just a bit off topic of population but that's sort of sort of something that you also need to know okay so so far what we've talked about in population is the two factors that affect population which is birth rate and death rate okay and we looked at the reason reasons to why different economies have different birth rates and death rates very important to know this because you would kind of apply this in your questions as well we now are going to be talking about the population structure and when I talk about population structure that simply means everything in terms of age in terms of um uh what is the age what is the uh you know what's the gender male to female ratio because that's very important for an economy um to kind of you you kind of need to talk about the population structure and we're going to start off with the first part of population structure which is the age distribution okay and what do I mean by age distribution I mean when we talk about age distribution I'm just going to paste this and talk about it right now so it's kind of lagging again okay age distribution so when I'm talking about age distribution what am I talking about when I talk about age distribution first of all the age distribution is the number of people number of people per age group okay it's the number of people per the age group that is what we mean by the age distribution okay now what exactly do we look at in age distribution in age distribution we kind of it's very important factor because let's say that we look at the age distribution that means in a labor force if I have a very like mid-30s mid2 um type of people in my economy then that most likely means I have a good labor force because at that age a lot of people are working right A lot of people are working so that kind of benefits the economy okay so people who are let's say older you know senior citizens those people are probably not going to be working in my economy because they are close to retirement age if they're close to retirement age they're not going to be part of the labor force so the government has to need to consider all these factors and that's kind of what we talk about in age distribution let's start off with some consequences of an aging population and why what's the consequence of populations from aging okay let's talk about this and we'll quickly talk about this it's not that big of a topic but we'll talk about it in just shortly right now so what's the consequences of an aging population and when I mean by consequences of an aging population that simply means what's the disadvantage AG of having a population that has very a lot of old people so I've kind of that's what it implies okay so first of all if I have a lot of old people in my economy of course it's not a decision that you can kind of make but it's a disadvantage for the government because if I have very old people in my economy the workforce will decline because not a lot of old people can work because they're going to be close to the retirement age another reason is the government needs to spend a lot of money on housing old age welfare schemes okay you need to consider that as as well next is there's going to be a lot of increase in demand for products for old people if I have an old like population that's also going to be that right another disadvantage is that old people have less mobile so maybe the government has to in you know invest in technology for making the mobility of old people better okay so that's what we talk about age distribution okay let's now talk about gender distribution gender distribution is very easy to talk about because gender distribution is simply talking about male or female right now with gender distribution um a lot of factors on why there's gender imbalance we let's talk about that the reason why there could be gender imbalance could be the fact that maybe males that go for Wars they get killed so there could be a balance imbalance in that way um there could be violence towards females that could also be a factor to why they could be gender imbalance there could also be a reason to why maybe um having more females will encourage birth rates to rise so and increase the population growth so these are the consequences of um change in gender distribution okay meaning a change in the gender distribution so let's look at the consequences of this so if I have more females in the economy this can incourage birth rates right this can have a high birth rate now remember having a high birth rate does not mean that the economy is doing well having a low birth rate does not mean the economy is doing well what is doing well is when the birth rate is steady and it has a good birth rate according to the economy that is what we kind of deal with so there's no certain type of oh the birth rate is so high is very good for the economy or it's very low so on so forth okay so you kind of need to look at it in terms of that way okay let's now look at the effects of an increasing population size okay because this is a very very important metric for a government because a government kind of wants to control their population size and I kind of introduced this topic by saying that a government must control their population size so let's look at the effects of these increasing population size now if I have a big population what does this mean this means my market size for the home is going to increase meaning there's going to be more trades there's going to be more demand there's going to be more Supply and if you think about this we looked at a factor of demand as population because if I have a more bigger population if I have more number of consumers I have a higher demand for certain products okay so that's kind of something that you need to look at the next one is that there could be increased supply of labor which simply means that if I have more people in my population that could mean that maybe more people want to work so that's increased supply of labor okay if I have a higher population size that could mean there's more capital goods to be produced because you want to satisfy everybody's needs and wants so that could be also another reason to why having a high population leads to this having a high population could fall in the rate of productivity which simply means that because there are many people working on limited resources this means that there could be a fall in productivity right because there are too many people and there's scarse resources that could also be kind of bad so these are some of the kind effects of increasing population size or why it could be a disadvantage or Advantage is for another type of is for the government to decide based on the different factors okay so that's what we kind of talk about okay and the last part of this chapter talks about what this chapter is about and that is economic development so let's start off by defining what economic development is when we say Economic Development what do we mean by this Economic Development refers to the increase in the economic welfare of people through the growth in productive scale and wealth of the economy a lot of hard words there maybe but all I'm trying to say is the government wants to improve this developed economies means it wants to help living standards improve it wants to help poverty to be reduced it wants to have a balanced population size and you see how everything kind of ties up so so far in this entire chapter we talked about everything that is revolved around something called developed economies What refers to something that's developed What refers to developed countries if a country is developed that probably means it has a high life expectancy it has high literacy rate it is has a low death rate right so those are what makes a developed economy and all the factors that we looked at in this sort of um all the all the factors that we looked in this topic makes up the economic development okay and everything is kind of tied up and that's how I want to conclude this video is that a developed economy has different factors that make it developed or not developed and we talked about living standards living standards if I have a high living standard that's more likely means I have a higher econ iic development right so those are the reasons of how economic development is affected okay meaning High population growth meaning if the population is so high this is very evident in low developed countries because remember we said that countries that can't afford contraceptions countries that can't afford um a lot of like stuff like that have high birth rates High birth rates meaning High population and growth would probably mean that that country is less developed okay so all in all I want to conclude this video by saying that all the concepts that we talked about in this chapter leads to Economic Development living standards leads to Economic Development poverty is part of Economic Development okay and the population structure the population age the population gender all affects the economic development and that concludes this chapter and um that is how this chapter was kind of made in a fact that we talk about the different metrics of how we measure economic development and use all those Concepts in order to judge whether this economy is good or this economy is bad so there you go guys that is chapter 4 I'm hoping um so far this series is good going good for you and we have one more chapter left so I'll see you in the next chapter goodbye guys