Development Economics Glossary - E to G

Eco-innovation

Products and processes that contribute to sustainable development

Ecological deficit

Depleting natural assets faster than these can be replenished

Economic Freedom Index

1 Size of Government: Expenditures, Taxes, and Enterprises;

2 Legal Structure and Security of Property Rights;

3 Access to Sound Money;

4 Freedom to Trade Internationally;

5 Regulations of Credit, Labour, and Business.

Economic growth

An increase in real GDP or increase in the productive potential of an economy

Economic nationalism

The idea that a country's economy will perform best if its industries are protected from competition, for example by taxes on imported goods

Economic structure:

The balance of output, incomes and employment drawn from different economic sectors – ranging from primary (farming, fishing, mining etc) to secondary (manufacturing and construction industries) to tertiary and quaternary sectors (tourism, banking, software industries)

Emerging markets

The financial markets of developing countries

Environmental tax

An environmental tax is a tax on a good or service, which is judged to be detrimental to the environment. It may also be a tax on a factor input used to produce (supply) that final product.

Exogenous shock

An unexpected event beyond the control of the country’s officials that has a large negative impact on its economy.

Export quota

A restriction on the volume of exports that can be sold overseas – this acts as a supply constraint in international markets

Export revenue

Sales from selling goods and services overseas

External debt

External debt is money owed by a government to international creditors

External demand

External demand is the net change in demand for goods and services from international trade. Net trade = the value of exports (X) minus the value of imports (M). Net trade is positive when a country runs a trade surplus and negative when a country runs a trade deficit.

Externalities

Action of one agent affects the action of another agent. Too little or too much of the good is produced or consumed than would be socially optimal

FDI

Foreign direct investment - long term participation by country A into country B. such as participation in management, joint-venture, transfers of technology

Fertility Rate

The average number of children a woman will have during her lifetime, by country or region

Fixed exchange rate

An exchange rate that is fixed against other major currencies through action by governments or central banks, usually within small margins of fluctuation around the central rate. Likely to involve periodic intervention in the foreign exchange market by one or more central banks to buy or sell the currency in question if it moves below or above its margins.

Foreign direct investment

FDI is the acquisition of a controlling interest in productive operations abroad by companies resident in the home economy. May involve the creation of new productive capacity such as a new factory

Foreign exchange gap

When a country's balance of payments on current account deficit is greater than the value of capital inflows

Foreign exchange reserves

The reserves of gold or foreign currencies (e.g. US dollars or Euros) typically held by central banks on behalf of their national government

Foreign savings

Foreign savings can flow into countries and provide a supplement to domestic savings. They include overseas aid, private FDI and capital flows

Fragile states

Those states where the government cannot or will not deliver core functions to the majority of its people, including the poor

Free trade

When trade between nations is allowed to occur without any form of import restriction

Genuine progress indicator

GPI is an attempt to measure whether a country's growth, increased production of goods, and expanding services have actually resulted in the improvement of the welfare (or well-being) of the people in the country. GPI advocates claim that it can more reliably measure economic progress, as it distinguishes between worthwhile growth and uneconomic growth

Globalisation

The deepening of relationships between countries of the world reflected in an increasing level of overseas trade and investment.

Government debt

Government debt is also known as public debt, national debt, sovereign debt is money (or credit) owed by a central government to creditors within the country (domestic, or internal debt) as well as to international creditors

Green development

A pattern of development that decouples growth from heavy dependence on resource use, carbon emissions and environmental damage, and promotes growth through the creation of new green product markets, technologies, investments, and changes in consumption and conservation behaviour

Gross Domestic Product per capita:

National income per head of population

Gross Domestic Product:

The total value of an economy's domestic output of goods and services

Gross National Income (GNI):

This is broadly the same as GDP except that it adds what a country earns from overseas investments and subtracts what foreigners earn in a country and send back home. GNI is affected for example by profits from businesses owned overseas and also remittances sent home by migrant workers.

Gross saving rate

Gross saving = GDP minus consumption by government and the private sector, expressed as a percentage of GDP. A high gross domestic saving rate usually indicates a country's high potential to invest in capital

Growth elasticity of poverty reduction

This measures the amount of poverty reduction achieved for a given increase in average per capita incomes