Suppose you have to choose a measure of living standard to determine which households need most assistance

Suppose you have to choose a measure of living standard to determine which households need most assistance. Discuss the merits and drawbacks of the following three measures of living standards:

1. Real income per capita within the household over the last 2 weeks
2. Real income per capita within the household over the last 12 months
3. Real consumption expenditure per capita over the last month

1.2 Suppose a policy did not produce any change in a household’s real per capita consumption expenditure. List at least two ways the policy might have nonetheless improved the household’s well-being. 

2.1 The government is considering various proposals to increase country A’s GDP growth rates. Using the predictions of the Solow growth model please discuss the merits of each of the proposed ideas for generating income growth. For each proposal does your answer change in the short and long run? That is, would you always give the same advice?

1. Information campaign to encourage people to save in an effort to increase national savings rate.
2. Investment in building new roads connecting villages to cities (Note: in this context existing road infrastructure is limited in the country).

2.2 Table 1 below gives you data for three decades on GDP growth (DY/Y), employment growth (DL/L), capital stock growth (DK/K), and the labor (W_L) and capital (W_K) shares for Taiwan. The GDP growth rate was quite high through the three decades, yet the relative roles of labor deepening, capital deepening, and TFP growth in accounting for GDP growth were quite different. Further, TFP growth (stressed by the Solow model) and factor deepening (stressed by the Harrod-Domar model) were not equally important. 

1. Calculate the rate of total factor productivity (TFP) growth for each period (denoted by (DA/A) in the Solow model). For each period, calculate the percentage share of observed growth that can be attributed to: labor deepening, capital deepening and the TFP (technological change) contribution.

2. Compare the growth experiences of the three decades in terms of the relative roles of TFP growth, labor deepening, and capital deepening. Please reference the growth models in your explanation of Taiwan’s growth experience.

Table 1: Taiwan’s growth data

3.1 Based on the information in Table 2 and the text below on the growth elasticity of poverty how would you characterize the evolution of poverty and inequality in Ghana? Has growth been pro-poor in Ghana over time?

Growth elasticity of poverty refers to the percentage change in poverty rate associated with a one percent change in mean per capita income or GDP. Between 2006 and 2013 a 1% change in income growth led to a 0.17 percentage reduction in poverty. Between 2013 and 2017, there was a 0.07 percentage change in poverty reduction.

Table 2: Poverty and inequality in Ghana

3.2 Is it possible for the P0 measure of poverty to fall while the number of poor rises?

4. “The Anti-Corruption campaigns promoted by Western donors in developing countries are naïve, ignore the realities of local politics, and may even be harmful to these countries.”  Discuss this statement explaining arguments for and against the statement. Use specific examples to support your arguments.

5. According to Jeffrey Sachs, countries are stuck in a ‘poverty trap’ and need a push in the form of an initial large investment to escape poverty. Based on Sachs, provide an example of a successful policy that helped to escape a ‘poverty trap.’ What evidence does William Easterly use to argue against the notion of poverty traps? Please be specific about the economic arguments used by Easterly.

6. There are two groups debating the adoption of targeted vs non-targeted universal basic income. Pick a side and provide at least two justifications to support your position.