A2 notes on economic development

constraints on growth and economic development:

absence of capital markets, primary product dependency, savings gap, foreign exchange gap and capital flight, corruption, absence of stable government, infastructure , lack of education and training.

primary product dependency is where a country is reliant on exporting hard and soft commodities.

problems of primary product dependency include:

price fluctuations given their inelastic price elasticity of demand and supply ( use cobweb theorem here ). 

fluctuations in producer incomes and foreign exchange earnings

difficult in planning investment and output

natural disasters 

protectionism by developing countries - such as the EU CAP ( domestic subsidies to producers in developed countries make it hard for…