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== '''[[Macroeconomics]]''' ==
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'''Macroeconomics''' is the study of the national [[economy]] viewed as a single interactive system.  It is concerned, not with individual transactions,  but with economy-wide aggregates, including national income, the rate of inflation and the unemployment rate.  At the theoretical level it  seeks  to explain how national income grows, how it fluctuates and what then happens to prices and unemployment.  At the positive level it tests competing theories against the evidence provided by economic statistics,  and it estimates the numerical relationships required to construct forecasting models. At the application level it considers what policies would serve to promote economic stability and growth and full employment.
==Footnotes==
 
Since a national economy is too complex to analyse for those purposes,  macroeconomics uses  simplified versions which ignore those  components  that are thought to have relatively little influence upon the question under consideration.  The initial  procedure  postulates the way that the components of the system interact and deduces from those postulated relationships,  how the system as a whole may be expected to behave.  That deductive process is normally followed by the use of  evidence and inductive reasoning to  test, either the relationships  themselves,  or the deduced behaviour of the system.
 
''[[Macroeconomics|.... (read more)]]''
 
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Latest revision as of 09:19, 11 September 2020

The Mathare Valley slum near Nairobi, Kenya, in 2009.

Poverty is deprivation based on lack of material resources. The concept is value-based and political. Hence its definition, causes and remedies (and the possibility of remedies) are highly contentious.[1] The word poverty may also be used figuratively to indicate a lack, instead of material goods or money, of any kind of quality, as in a poverty of imagination.

Definitions

Primary and secondary poverty

The use of the terms primary and secondary poverty dates back to Seebohm Rowntree, who conducted the second British survey to calculate the extent of poverty. This was carried out in York and was published in 1899. He defined primary poverty as having insufficient income to “obtain the minimum necessaries for the maintenance of merely physical efficiency”. In secondary poverty, the income “would be sufficient for the maintenance of merely physical efficiency were it not that some portion of it is absorbed by some other expenditure.” Even with these rigorous criteria he found that 9.9% of the population was in primary poverty and a further 17.9% in secondary.[2]

Absolute and comparative poverty

More recent definitions tend to use the terms absolute and comparative poverty. Absolute is in line with Rowntree's primary poverty, but comparative poverty is usually expressed in terms of ability to play a part in the society in which a person lives. Comparative poverty will thus vary from one country to another.[3] The difficulty of definition is illustrated by the fact that a recession can actually reduce "poverty".

Causes of poverty

The causes of poverty most often considered are:

  • Character defects
  • An established “culture of poverty”, with low expectations handed down from one generation to another
  • Unemployment
  • Irregular employment, and/or low pay
  • Position in the life cycle (see below) and household size
  • Disability
  • Structural inequality, both within countries and between countries. (R H Tawney: “What thoughtful rich people call the problem of poverty, thoughtful poor people call with equal justice a problem of riches”)[4]

As noted above, most of these, or the extent to which they can be, or should be changed, are matters of heated controversy.

Footnotes

  1. Alcock, P. Understanding poverty. Macmillan. 1997. ch 1.
  2. Harris, B. The origins of the British welfare state. Palgrave Macmillan. 2004. Also, Oxford Dictionary of National Biography.
  3. Alcock, Pt II
  4. Alcock, Preface to 1st edition and pt III.