Inclusive economic growth is a pivotal concept in modern economics, emphasizing growth that benefits all segments of society. For students of AS & A Level Economics (9708), understanding this topic is crucial as it bridges theoretical frameworks with real-world applications. This article delves into the definition, underlying principles, and multifaceted effects of inclusive economic growth, providing a comprehensive resource for academic excellence.

Key Concepts

Definition of Inclusive Economic Growth

Inclusive economic growth refers to an economic expansion that is distributed fairly across society and creates opportunities for all individuals to participate in the economy. Unlike traditional measures of growth that focus solely on increases in Gross Domestic Product (GDP), inclusive growth considers equitable access to resources, opportunities, and benefits derived from economic activities.

Components of Inclusive Economic Growth

Inclusive economic growth encompasses several key components:

Equitable Income Distribution: Ensuring that income gains are shared widely, reducing the income disparity between different socio-economic groups.
Employment Opportunities: Creating quality jobs that offer fair wages, job security, and opportunities for advancement.
Access to Education and Healthcare: Providing essential services that enable individuals to contribute effectively to the economy.
Financial Inclusion: Ensuring that all individuals have access to financial services, such as banking, credit, and insurance.
Social Protection: Implementing safety nets that protect vulnerable populations from economic shocks.

Theoretical Frameworks

Several economic theories underpin the concept of inclusive growth:

Endogenous Growth Theory: Suggests that policy measures, innovation, and human capital development are critical drivers of sustainable economic growth.
Capability Approach: Proposed by Amartya Sen, it emphasizes enhancing individuals' capabilities and freedoms as central to development.
Social Capital Theory: Highlights the role of social networks, trust, and institutions in facilitating economic activities and growth.

Indicators of Inclusive Economic Growth

To measure inclusive economic growth, economists utilize a variety of indicators beyond GDP:

Gini Coefficient: Measures income inequality within a population. A lower Gini coefficient indicates more equitable income distribution.
Human Development Index (HDI): Combines indicators of health, education, and income to assess overall human development.
Employment Rate: Indicates the proportion of the workforce that is employed, reflecting job creation and economic opportunities.
Poverty Rate: Measures the percentage of the population living below the poverty line, highlighting economic vulnerabilities.
Access to Education and Healthcare: Assesses the availability and quality of essential services that support individual and economic well-being.

Benefits of Inclusive Economic Growth

Inclusive economic growth offers numerous benefits:

Enhanced Social Stability: Reduces social tensions and conflicts arising from economic inequalities.
Increased Productivity: A healthy and educated workforce is more productive and innovative.
Sustainable Development: Balances economic growth with social inclusion and environmental sustainability.
Reduced Poverty: Broad-based growth lifts more people out of poverty by creating opportunities for economic participation.
Improved Quality of Life: Enhances overall well-being through better access to services and economic opportunities.

Challenges to Achieving Inclusive Economic Growth

Despite its benefits, achieving inclusive economic growth faces several challenges:

Structural Inequalities: Deep-rooted social and economic disparities can hinder equitable growth.
Policy Limitations: Inadequate or poorly designed policies may fail to address the needs of marginalized groups.
Globalization Pressures: Can lead to uneven benefits, where certain sectors or regions gain disproportionately.
Institutional Weaknesses: Lack of effective institutions can undermine efforts to promote inclusion.
Resource Constraints: Limited financial and human resources can impede the implementation of inclusive strategies.

Advanced Concepts

Endogenous Growth and Inclusivity

Endogenous growth theory posits that investment in human capital, innovation, and knowledge are significant drivers of economic growth. Integrating inclusivity into this framework involves ensuring that these investments benefit a broad base of the population.

Human Capital Development: Investing in education and training programs to enhance the skills of the workforce, thereby promoting equitable growth.
Research and Development (R&D): Encouraging innovation that creates jobs and improves productivity across various sectors.
Knowledge Dissemination: Facilitating access to information and technology for all individuals, reducing knowledge asymmetries.

Social Entrepreneurship and Inclusive Growth

Social entrepreneurship plays a critical role in fostering inclusive economic growth by addressing social issues through innovative business models.

Creating Social Value: Entrepreneurs focus on solving societal problems, such as poverty, education, and healthcare access.
Job Creation: Social enterprises generate employment opportunities, particularly for marginalized groups.
Sustainable Business Practices: Emphasizing environmental sustainability alongside economic objectives.

Inclusive Growth and Sustainable Development Goals (SDGs)

Inclusive economic growth aligns closely with the United Nations' Sustainable Development Goals, particularly Goal 8: Decent Work and Economic Growth.

Decent Work: Promotes employment that is productive and delivers fair income, security, and social protection.
Economic Opportunities: Ensures that economic benefits are accessible to all, reducing inequalities.
Sustainable Practices: Integrates environmental considerations to ensure that growth is sustainable in the long term.

Mathematical Models of Inclusive Growth

Mathematical models provide a framework for analyzing the dynamics of inclusive economic growth. One such model integrates GDP growth with social indicators. $$ Y = f(K, L, H) $$ Where:

Y: GDP
K: Capital Stock
L: Labor Force
H: Human Capital

In an inclusive growth model, the function $f$ also incorporates variables representing income distribution, access to education, and healthcare. $$ G = f(Y, I, E, H, F) $$ Where:

G: Inclusive Growth
Y: GDP
I: Income Distribution
E: Education Access
H: Healthcare Access
F: Financial Inclusion

Case Studies on Inclusive Economic Growth

Examining real-world examples provides insights into the implementation and impact of inclusive economic growth strategies.

Brazil's Bolsa Família Program: A conditional cash transfer program that provides financial aid to poor families, contingent on children's school attendance and vaccinations. This program has been instrumental in reducing poverty and improving education and health outcomes.
Rwanda's Vision 2020: Focuses on transforming Rwanda into a middle-income country through investments in education, infrastructure, and the private sector, emphasizing inclusivity to ensure broad-based economic benefits.
India's Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Guarantees 100 days of wage employment to rural households, thereby promoting income security and reducing poverty.

Policy Instruments for Promoting Inclusive Growth

Governments utilize various policy instruments to foster inclusive economic growth:

Progressive Taxation: Implements higher tax rates for higher income brackets to redistribute wealth effectively.
Subsidies and Grants: Provides financial support to disadvantaged groups to enhance their economic participation.
Labor Market Reforms: Enhances labor laws to protect workers' rights and promote fair wages.
Investment in Public Services: Allocates funds to healthcare, education, and infrastructure to support inclusive growth.
Microfinance Programs: Offers small loans and financial services to entrepreneurs and small businesses in marginalized communities.

Economic Growth versus Inclusive Growth

While economic growth focuses on increasing GDP, inclusive growth emphasizes the equitable distribution of economic gains. Economic growth can occur without inclusivity, leading to increased inequality, whereas inclusive growth ensures that the benefits of growth are shared broadly across society.

Economic Growth: Primarily measured by GDP; indicative of the overall economic activity.
Inclusive Growth: Measures both economic expansion and the distribution of its benefits; incorporates social and economic equity.

Measuring Inclusive Growth

Measuring inclusive growth requires a multidimensional approach, combining various indicators to capture both economic and social dimensions.

Composite Indices: Utilize multiple indicators, such as the Human Development Index (HDI), to provide a holistic measure of growth's inclusivity.
Disaggregated Data: Analyzes data by different demographic and socio-economic groups to assess disparities.
Longitudinal Studies: Track changes over time to evaluate the sustainability and consistency of inclusive growth policies.

Global Trends in Inclusive Economic Growth

Global trends indicate a growing recognition of the importance of inclusive growth in policy agendas:

Rise of Sustainable Development Goals (SDGs): Emphasize inclusivity and sustainability as core pillars of development.
International Organizations' Initiatives: Entities like the World Bank and IMF promote inclusive growth through funding and policy advice.
Advancements in Technology: Digital inclusion initiatives aim to bridge the digital divide, ensuring broader access to technological advancements.
Focus on Gender Equality: Increasing emphasis on empowering women economically as a pathway to inclusive growth.

Comparison Table

Aspect	Economic Growth	Inclusive Economic Growth
Definition	Increase in a country's GDP over time.	Economic growth that is distributed fairly across society, benefiting all segments.
Focus	Overall economic output.	Equitable distribution of income, opportunities, and benefits.
Measurement	GDP, GDP per capita.	Gini coefficient, Human Development Index, poverty rates.
Benefits	Higher national income, increased investment.	Reduced inequality, enhanced social stability, sustainable development.
Challenges	May increase income disparity.	Requires comprehensive policy measures and resource allocation.

Summary and Key Takeaways

Inclusive economic growth ensures that economic benefits are shared broadly across society.
Key components include equitable income distribution, employment opportunities, and access to essential services.
Theoretical frameworks and policy instruments are essential in promoting inclusivity in growth.
Measuring inclusive growth involves multidimensional indicators beyond traditional GDP metrics.
Global trends and case studies highlight the practical applications and challenges of achieving inclusive growth.

Examiner Tip

Tips

Use the EAFE Framework: Remember the key components of inclusive growth—Equitable income distribution, Access to education and healthcare, Financial inclusion, and Employment opportunities. This mnemonic helps in structuring your essays and answers.

Connect Theories to Real-World Examples: When explaining theoretical concepts, always link them to practical case studies or current events to enhance understanding and retention.

Practice Multi-Dimensional Analysis: Ensure you assess both economic and social indicators when discussing growth. This comprehensive approach is crucial for achieving higher marks in exams.

Did You Know

1. Countries that prioritize inclusive economic growth often experience higher levels of social cohesion and lower rates of crime. For example, Nordic countries consistently rank high in both economic performance and social equality.

2. Inclusive growth isn't just a national concern. Cities like Medellín in Colombia have successfully implemented inclusive policies by investing in education and infrastructure, transforming from conflict zones to thriving urban centers.

3. Technological advancements can both aid and hinder inclusive growth. While digital platforms create new jobs and opportunities, they can also widen the gap if access to technology is unequal.

Common Mistakes

Mistake 1: Equating economic growth solely with GDP increases.
Incorrect: "If GDP is rising, the economy is doing well for everyone."
Correct: "GDP growth is important, but it's essential to assess how the benefits are distributed across different groups."

Mistake 2: Overlooking non-economic factors in inclusive growth.
Incorrect: "Inclusive growth only concerns income distribution."
Correct: "Inclusive growth also includes access to education, healthcare, and financial services."

Mistake 3: Assuming that economic policies benefit all without targeted measures.
Incorrect: "Tax cuts for businesses will automatically lead to broad-based economic benefits."
Correct: "While tax cuts can stimulate growth, targeted policies are needed to ensure that benefits reach marginalized communities."

FAQ

What is inclusive economic growth?

Inclusive economic growth refers to economic expansion that is distributed fairly across society, ensuring that all segments benefit from increased prosperity.

How does inclusive growth differ from traditional economic growth?

Traditional economic growth focuses primarily on increases in GDP, while inclusive growth emphasizes equitable distribution of economic benefits and opportunities for all individuals.

Why is inclusive growth important for sustainability?

Inclusive growth promotes social stability, reduces poverty, and ensures that economic development is sustainable by addressing the needs of all community members.

What are common indicators used to measure inclusive growth?

Common indicators include the Gini coefficient, Human Development Index (HDI), employment rates, poverty rates, and access to education and healthcare.

Can inclusive growth be achieved without increasing GDP?

Yes, it's possible to achieve more equitable distribution and improved social indicators without significant GDP growth, though balanced growth typically supports greater inclusivity.

What role do governments play in promoting inclusive growth?

Governments implement policies such as progressive taxation, social protection programs, investment in public services, and labor market reforms to foster inclusive economic growth.

1. The price system and the microeconomy

1.1 Types of cost, revenue and profit, short-run and long-run production

1.1.1 Short-run cost function: TC, AC, MC, TFC, TVC, AFC, AVC

1.1.2 Long-run production and returns to scale

1.1.3 Long-run cost curve and minimum efficient scale

1.1.4 Economies and diseconomies of scale

1.1.5 Revenue definitions and calculation: TR, AR, MR

1.1.6 Normal, subnormal and supernormal profit

1.1.7 Short-run production function and law of diminishing returns

1.2 Different market structures

1.2.1 Market types: perfect, monopoly, monopolistic, oligopoly, natural monopoly

1.2.2 Structure: number of firms, product type, barriers to entry

1.2.3 Performance in different markets: revenues, output, profit, supply curve, efficiency

1.2.4 Oligopoly: collusion, price/non-price competition, Prisoner's Dilemma

1.2.5 Concentration ratio

1.3 Growth and survival of firms

1.3.1 Reasons for different firm sizes

1.3.2 Internal and external growth: horizontal, vertical, conglomerate

1.3.3 Cartels and their consequences

1.3.4 Principal–agent problem

1.4 Differing objectives and policies of firms

1.4.1 Profit-maximisation and alternative objectives

1.4.2 Price discrimination: types, conditions, consequences

1.4.3 Other pricing policies: limit, predatory, price leadership

1.4.4 PED and firm revenue in different demand curves

1.5 Utility

1.5.1 Definition and calculation of total and marginal utility

1.5.2 Diminishing marginal utility

1.5.3 Equi-marginal principle

1.5.4 Derivation of individual demand curve

1.5.5 Limitations of marginal utility theory

1.6 Indifference curves and budget lines

1.6.1 Meaning of indifference curve and budget line

1.6.2 Causes of shifts in budget line

1.6.3 Income, substitution, and price effects

1.6.4 Limitations of indifference curve model

1.7 Efficiency and market failure

1.7.1 Productive and allocative efficiency

1.7.2 Pareto optimality and dynamic efficiency

1.7.3 Definition and causes of market failure

1.8 Private costs and benefits, externalities and social costs and benefits

1.8.1 Calculation of social, private and external costs and benefits

1.8.2 Positive and negative externalities in consumption and production

1.8.3 Deadweight welfare losses and asymmetric information

2. The Macroeconomy

2.1 Price stability

2.1.1 Consequences of inflation

2.1.2 Definition of inflation, deflation, disinflation

2.1.3 Measurement: CPI and difficulties

2.1.4 Nominal vs real values

2.1.5 Causes of inflation: cost-push and demand-pull

2.2 National income statistics

2.2.1 Meaning of national income

2.2.2 Measurement: GDP, GNI, NNI

2.2.3 Adjustment from market to basic prices

2.2.4 Adjustment from gross to net values

2.3 Circular flow of income

2.3.1 Circular flow in closed and open economies

2.3.2 Injections and leakages (multiplier not required)

2.3.3 Equilibrium and disequilibrium (no propensities)

2.4 Aggregate Demand and Aggregate Supply analysis

2.4.1 Definition and components of Aggregate Demand

2.4.2 Shape and shifts of AD curve

2.4.3 Definition and determinants of Aggregate Supply

2.4.4 Shape of AS in short run and long run

2.4.5 Shifts in AS in short and long run

2.4.6 Movement along vs shift in AD and AS

2.4.7 Establishing equilibrium in AD/AS model

2.4.8 Effects of AD/AS shifts on output, price level, and employment

2.5 Economic growth

2.5.1 Meaning and measurement of economic growth

2.5.2 Nominal vs real GDP growth

2.5.3 Causes and consequences of economic growth

2.6 Unemployment

2.6.1 Meaning and measures of unemployment

2.6.2 Causes and types: frictional, structural, cyclical, seasonal, technological

2.6.3 Consequences of unemployment

3. International economic issues

3.1 Relationship between countries at different levels of development

3.1.1 External debt: causes and consequences

3.1.2 Role of IMF and World Bank

3.1.3 International aid: forms, reasons, effects

3.1.4 Trade and investment

3.1.5 Multinational companies: definition, activities, consequences

3.1.6 Foreign Direct Investment: definition and consequences

3.2 Globalisation

3.2.1 Meaning, causes, and consequences of globalisation

3.2.2 Free trade area, customs union, monetary union, economic union

3.2.3 Trade creation and trade diversion

3.3 Policies to correct disequilibrium in the balance of payments

3.3.1 Balance of payments accounts: current, financial, and capital

3.3.2 Impact of fiscal, monetary, supply-side, protectionist and exchange rate policies

3.3.3 Expenditure-switching vs expenditure-reducing policies

3.4 Exchange rates

3.4.1 Measurement of exchange rates: nominal vs real

3.4.2 Trade-weighted exchange rates

3.4.3 Fixed and managed exchange rate determination

3.4.4 Revaluation vs devaluation of fixed exchange rate

3.4.5 Effects of exchange rate changes: Marshall-Lerner and J curve

3.5 Economic development

3.5.1 Classification by development and national income

3.5.2 Indicators of living standards and development: monetary, non-monetary, composite

3.5.3 Comparison of growth and living standards across countries and over time

3.6 Characteristics of countries at different levels of development

3.6.1 Population: birth/death rate, infant mortality, migration, urbanisation

3.6.2 Income distribution: Gini coefficient, Lorenz curve

3.6.3 Economic structure: employment sectors, trade patterns

4. The macroeconomy

4.1 Economic growth and sustainability

4.1.1 Positive and negative output gaps

4.1.2 Business (trade) cycle: phases, causes, stabilisers

4.1.3 Policies to promote economic growth and their effectiveness

4.1.4 Definition and effects of inclusive economic growth

4.1.5 Definition and effects of sustainable economic growth

4.1.6 Policies to mitigate impact of growth on environment

4.1.7 Actual vs potential growth

4.2 Employment/unemployment

4.2.1 Full employment: definition

4.2.2 Equilibrium and disequilibrium unemployment (including hysteresis)

4.2.3 Voluntary and involuntary unemployment

4.2.4 Natural rate of unemployment: definition, determinants, policy implications

4.2.5 Trends in employment and unemployment

4.2.6 Labour mobility: geographical and occupational

4.2.7 Policies to reduce unemployment and their effectiveness

4.3 Money and banking

4.3.1 Definition, functions, and characteristics of money

4.3.2 Definition of money supply and quantity theory of money (MV=PT)

4.3.3 Functions and objectives of commercial banks

4.3.4 Causes of changes in money supply in open economy

4.3.5 Credit creation, central bank role, government deficit financing, quantitative easing

4.3.6 Policies to reduce inflation and their effectiveness

4.3.7 Demand for money: liquidity preference theory

4.3.8 Interest rate determination: loanable funds and Keynesian theory

4.4 The circular flow of income

4.4.1 The multiplier: definition and calculation in different economies

4.4.2 Propensities: APS, MPS, APC, MPC, APM, MPM, ART, MRT

4.4.3 National income determination using AD and income approach

4.4.4 Effect of AD changes on national income using the multiplier

4.4.5 Components and determinants of AD: consumption, savings, investment, government spending, net export

4.4.6 Full employment and equilibrium level of national income

4.4.7 Inflationary and deflationary gaps

5. The price system and the microeconomy

5.1 Price elasticity of supply

5.1.1 Factors affecting PES

5.1.2 Implications for speed of response to market changes

5.1.3 Definition of PES

5.1.4 Formula and calculation of PES

5.1.5 Interpretation of PES coefficients

5.2 The interaction of demand and supply

5.2.1 Market equilibrium and disequilibrium

5.2.2 Shifts in demand and supply affecting equilibrium

5.2.3 Relationships between markets: complements, substitutes, derived demand, joint supply

5.2.4 Functions of price: rationing, signalling, incentivising

5.3 Consumer and producer surplus

5.3.1 Meaning and significance of consumer surplus

5.3.2 Meaning and significance of producer surplus

5.3.3 Causes of changes in consumer and producer surplus

5.3.4 Elasticity’s role in determining surplus changes

5.4 Demand and supply curves

5.4.1 Effective demand

5.4.2 Individual and market demand and supply

5.4.3 Determinants of demand

5.4.4 Determinants of supply

5.4.5 Causes of a shift in the demand curve

5.4.6 Causes of a shift in the supply curve

5.4.7 Shift vs movement along demand/supply curves

5.5 Price elasticity, income elasticity and cross elasticity of demand

5.5.1 Definitions of PED, YED, XED

5.5.2 Formulae and calculation of PED, YED, XED

5.5.3 Interpretation of elasticity coefficients

5.5.4 Types of elasticity: elastic, inelastic, unitary

5.5.5 Variation in PED along a straight-line demand curve

5.5.6 Factors affecting PED, YED, XED

5.5.7 Relationship between PED and total expenditure

5.5.8 Decision-making implications of PED, YED, XED

6. Government macroeconomic intervention

6.1 Government macroeconomic policy objectives

6.1.1 Using policy to achieve price stability, low unemployment, and economic growth

6.2 Fiscal policy

6.2.1 Meaning of government budget

6.2.2 Government budget deficit vs surplus

6.2.3 Meaning and significance of national debt

6.2.4 Types of taxes and tax rates

6.2.5 Reasons for taxation

6.2.6 Types and reasons for government spending

6.2.7 Expansionary vs contractionary fiscal policy

6.2.8 AD/AS analysis of fiscal policy impact

6.3 Monetary policy

6.3.1 Definition and tools of monetary policy

6.3.2 Expansionary vs contractionary monetary policy

6.3.3 AD/AS analysis of monetary policy impact

6.4 Supply-side policy

6.4.1 Meaning and objective of supply-side policy

6.4.2 Tools of supply-side policy

6.4.3 AD/AS analysis of supply-side policy impact

7. Basic economic ideas and resource allocation

7.1 Scarcity, choice and opportunity cost

7.1.1 Fundamental economic problem of scarcity

7.1.2 Need to make choices at all levels (individuals, firms, governments)

7.1.3 Nature and definition of opportunity cost, arising from choices

7.1.4 Basic questions of resource allocation: what, how, for whom

7.2 Economic methodology

7.2.1 Economics as a social science

7.2.2 Positive and normative statements

7.2.3 Meaning of the term ceteris paribus

7.2.4 Importance of the time period (short run, long run, very long run)

7.3 Factors of production

7.3.1 Definition of land, labour, capital and enterprise

7.3.2 Human capital vs physical capital

7.3.3 Rewards to the factors of production

7.3.4 Division of labour and specialisation

7.3.5 Role of the entrepreneur: risk and organisation

7.4 Resource allocation in different economic systems

7.4.1 Decision-making in market, planned and mixed economies

7.4.2 Resource allocation processes in different systems

7.5 Production possibility curves

7.5.1 Nature and meaning of a production possibility curve (PPC)

7.5.2 Shape of PPC: constant and increasing opportunity costs

7.5.3 Causes and consequences of shifts in a PPC

7.5.4 Significance of a position within a PPC

7.6 Classification of goods and services

7.6.1 Free goods and private goods (economic goods)

7.6.2 Public goods: nature and definition

7.6.3 Merit goods and under-consumption due to imperfect information

7.6.4 Demerit goods and over-consumption due to imperfect information

8. Government microeconomy intervention

8.1 Reasons for government intervention in markets

8.1.1 Addressing the non-provision of public goods

8.1.2 Addressing over-consumption of demerit goods and under-consumption of merit goods

8.1.3 Controlling prices in markets

8.2 Methods and effects of government intervention in markets

8.2.1 Impact and incidence of specific indirect taxes

8.2.2 Impact and incidence of subsidies

8.2.3 Direct provision of goods and services

8.2.4 Maximum and minimum prices

8.2.5 Buffer stock schemes

8.2.6 Provision of information

8.3 Addressing income and wealth inequality

8.3.1 Difference between income as a flow and wealth as a stock

8.3.2 Measuring inequality: Gini coefficient

8.3.3 Economic reasons for income and wealth inequality

8.3.4 Policies to redistribute income and wealth: minimum wage, transfer payments, progressive taxes, stat

9. International economic issues

9.1 The reasons for international trade

9.1.1 Absolute vs comparative advantage

9.1.2 Benefits of specialisation and free trade

9.1.3 Terms of trade: measurement, causes, impact

9.1.4 Limitations of trade theories

9.2 Protectionism

9.2.1 Meaning and context of protectionism

9.2.2 Tools of protection: tariffs, quotas, subsidies, embargoes, red tape

9.2.3 Arguments for and against protectionism

9.3 Current account of the balance of payments

9.3.1 Components of the current account

9.3.2 Calculation of trade balances and CAB

9.3.3 Causes and consequences of imbalances

9.4 Exchange rates

9.4.1 Definition and determination of floating exchange rates

9.4.2 Depreciation vs appreciation of exchange rates

9.4.3 Causes of exchange rate changes

9.4.4 Impact of exchange rate changes using AD/AS

9.5 Policies to correct imbalances in the current account

9.5.1 Objective of stability in current account

9.5.2 Use of fiscal, monetary, supply-side and protectionist policies

10. Government microeconomic intervention

10.1 Government policies to achieve efficient resource allocation and correct market failure

10.1.1 Application and effectiveness of taxes and subsidies

10.1.2 Use of price controls and production quotas

10.1.3 Prohibitions, licences, and direct provision

10.1.4 Pollution permits and property rights

10.1.5 Nationalisation and privatisation

10.1.6 Provision of information and behavioural insights

10.1.7 Definition, causes and consequences of government failure

10.2 Equity and redistribution of income and wealth

10.2.1 Equity vs equality

10.2.2 Equity vs efficiency

10.2.3 Absolute vs relative poverty

10.2.4 Poverty trap

10.2.5 Policies: negative income tax, universal and means-tested benefits, basic income

10.3 Labour market forces and government intervention

10.3.1 Derived demand and factors affecting labour demand

10.3.2 Shifts vs movement along labour demand curve

10.3.3 Marginal revenue product and labour demand

10.3.4 Factors affecting labour supply: wage and non-wage

10.3.5 Shifts vs movement along labour supply curve

10.3.6 Wage determination in perfect labour markets

10.3.7 Imperfect markets: trade unions, minimum wage, monopsony

10.3.8 Wage differentials from market forces

10.3.9 Transfer earnings and economic rent

11. Government macroeconomic intervention

11.1 Government macroeconomic policy objectives

11.1.1 Objectives: inflation, BoP, unemployment, growth, development, sustainability, redistribution

11.2 Links between macroeconomic problems and their interrelatedness

11.2.1 Internal vs external value of money

11.2.2 Balance of payments and inflation

11.2.3 Growth and inflation

11.2.4 Growth and balance of payments

11.2.5 Inflation and unemployment: traditional and expectations-augmented Phillips curve

11.3 Effectiveness of policy options to meet all macroeconomic objectives

11.3.1 Fiscal, monetary, supply-side, exchange rate and trade policies

11.3.2 Policy conflicts and problems

11.3.3 Macroeconomic government failure

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Definition and Effects of Inclusive Economic Growth

Introduction