Clark And Fisher Model Of Developmentx

Clark and Fisher Clark and Fisher

Model of Model of

DevelopmentDevelopmentDevelopmentDevelopment

Submitted by: D.Misyuk

Matrikulnummer: 02880509

Submitted to : A. Hecht

FH-Hof, 2010

Table of ContentsTable of Contents

• Biography of Clark and Fisher

• Model of Development, examples• Model of Development, examples

• Criticism of the model

22/01/2010 2Denys Misyuk

Biography: ClarkBiography: Clark

John Bates Clark John Bates Clark

(January 26, 1847 – March 21, 1938)

•Was born and raised in Providence, Rhode Island

•Graduated from the Amherst college in the age of 25

•1872-1875 attended University of Zurich and •1872-1875 attended University of Zurich and

University of Heidelberg, where studied under Karl

Knies ( one of the leaders of the German Historical

School)

•After return to USA, taught history, economics and

other subjects in the Carleton, Smith and Amherst

colleges

•In 1895 got a position in Columbia University (John

Hopkins University)


http://www.nndb.com/people/537/000113198/

john-bates-clark.jpg


Theoretical WorkTheoretical Work

• Early works – critics of capitalism, reflecting the

influence of the German socialism. Competition is not

a universal remedy.

““… We do not eat men … but we do it by such indirect and

refined methods that it does not generally occur to us that we

are cannibals” (Clark, J. B., 1878, How to Deal with Communism)

• Change of views, finishes the first work The

Philosophy of Wealth (1886)

“…“…he was convinced that pure competition was the

natural and normal law by which the economic order

obtained justice” (Everett, J. R., 1946, Religion in Economics)

• The foundation of further work – competition

““If nothing suppresses competition, progress will

continue forever” (Clark, J. B., 1907, Essentials of Economic

Theory)22/01/2010 4Denys Misyuk




Main WorksMain Works

• The Philosophy of Wealth (1886)

•• The Distribution of Wealth (1899, 1902)

• Essentials of Economic Theory (1907)

• Social Justice without Socialism (1914)





John Bates Clark MedalJohn Bates Clark Medal

• The John Bates Clark Medal is awarded

by the American Economic Association to

“that American economist under the age of forty who “that American economist under the age of forty who

is adjudged to have made a significant

contribution to economic thought and knowledge“

• One of the most prestigious Awards


http://www.vanderbilt.edu/AEA/clark_medal.

htm

Biography: FisherBiography: Fisher

Irving FisherIrving Fisher

(February 27, 1867 Saugerties, NY– April 29, 1947, NY)

• Since childhood he had a good mathematical

abilities and flair for invention

• Graduation from Yale in 1888 with BA degree• Graduation from Yale in 1888 with BA degree

• In 1891 he was granted Yale Ph.D in Economics

• Teacher Maths., Prof. Econ., Yale Univ.,

1892-5, 1895-1935;

• Businessman, derectorships, prolific writer


http://www.economystery.com/economists/irving_fis

her.php

Biography: FisherBiography: FisherPublicationsPublications

• Mathematical Investigations in the Theory of Value

and Prices (1892, 1961);

• The Nature of Capital and Income (1906, 1927)

• The Purchasing Power of Money (1911, 1920)

• Elementary Principles of Economics (1912)


http://www.economystery.com/economists/irving_fis

her.php

• Elementary Principles of Economics (1912)

• Stabilizing the Dollar (1920);

• The Making of Index Numbers (1922, 1927)

• The Money Illusion (1928)

• The Theory of Interest (1930, 1961)

• Booms and Depressions (1932)

• The debt-deflation theory of great depressions

(1933)

ClarkClark--Fisher Model of DevelopmentFisher Model of Development

• Two economists Fisher and Clark put forward the idea, that

economy would have three stages of production.

• The model uses percentages employed in each sector.


• The model uses percentages employed in each sector.

• It shows how as economy grows the relative importance of

different sector changes.


Following stages are

proposed:

•Primary production


•Primary production

•Secondary production

•Tertiary production


1. Primary production

• Is related to activities of

extracting raw materials through

agriculture, mining, fishing, and


forestry.

• Low income countries are

assumed to be dominated by

primary production.

• These are relatively primitive

economies


2. Secondary production

• Is related to the growth of

manufacturing and construction

sectors


• Middle income countries are

often dominated by secondary

production.

• To fulfill the growing demand in

industrial goods

• Leeds to the decrease of

agriculture sector


3. Tertiary production

• Is concerned with the provision

of services, such as

-education


-healthcare

-financial services

-tourism

and others

• This sector dominates in high-

income countries


This change is driven by an increase in productivity per employee.

1• Increased productivity in agriculture frees

people to work in manufacturing.

• Increased manufacturing productivity and


2

• Increased manufacturing productivity and increased income means people that people spend proportionally less on agricultural goods,

3• and then less on manufacturing goods than on

services.


4. Quaternary production

• The quaternary sector of the economy

is an extension of the three-sector

hypothesis of industry.

• It principally concerns the intellectual

services:

-information generation


-information generation

-information sharing

-consultation

-education

-R&D

• It is sometimes incorporated into the

tertiary sector but some argue that

intellectual services are distinct enough to

warrant a separate sector.

• This sector evolves in well developed

countries and requires a highly educated

workforce


Criticism of the modelCriticism of the model

• There are many LDCs where the main sector is a service

sector, without having a properly developed secondary sector.

Examples:

-Kenya (tourism)


-Kenya (tourism)

-Malta (tourism, financial services)

-Cyprus (tourism, financial services)

-Hong Kong (financial services)

• The model ignores the international economic context , not

taking into consideration the import of manufactured goods .

Q&A Q&A

Thank you for your Thank you for your


Thank you for your Thank you for your

kind attention!!kind attention!!

Sources of InformationSources of Information

1. http://en.wikipedia.org/wiki/John_Bates_Clark_Medal

2. http://en.wikipedia.org/wiki/John_Bates_Clark#cite_note-5

3. http://ru.wikipedia.org/wiki/%D0%9A%D0%BB%D0%B0%D1%80%D0%BA,_%D0

%94%D0%B6%D0%BE%D0%BD_%D0%91%D0%B5%D0%B9%D1%82%D1%81

4. http://en.wikipedia.org/wiki/Irving_Fisher


4. http://en.wikipedia.org/wiki/Irving_Fisher

5. http://www.cpm.ll.ehime-u.ac.jp/AkamacHomePage/Akamac_E-text_Links/Fisher.html

6. http://www.geography.learnontheinternet.co.uk/topics/empstruct.html#structure

7. http://www.bized.co.uk/virtual/dc/copper/theory/th6.htm

8. http://www.slideshare.net/fozzie/clark-fisher-model

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