Download Economics with Prof. Sanjay Paul

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EC311: ECONOMIC DEVELOPMENT
Tue, Thu 12:00-1:40pm
Hoover 213
Fall 2015
Dr. Sanjay Paul
Office: Hoover 206
Tel: 717-361-1543
Email: [email protected]
Web: http://users.etown.edu/p/pauls/ec311
Office hours
 Mon 1:00-3:15pm
 Tue 9:45-11:00am
 Wed 1:00-3:15pm
 Thu 9:45-11:00am
And by appointment
Course description
The primary objective of the course is to understand the process of economic development of less
developed countries (LDCs), and the importance of international trade in that process.
Development economics has changed rapidly in recent years. Immediately following the Second World
War, several LDCs adopted development policies that sought to promote rapid industrialization of the
economy. These policies included elements of central planning, government ownership of several
industries, and the use of trade barriers.
The fall of communism coupled with the success of the Asian tigers led to a new line of thinking in
development economics. There was a growing realization that the objective of economic growth may
best be attained by the use of market-oriented policies—policies that promote private enterprise, free
trade and the like.
We will study different theories of economic growth. International trade plays a crucial role in the
process of growth by permitting a country to supplement any shortfall in domestic saving by borrowing
from abroad. Additionally, trade allows gains from specialization, the transfer of technology, and the
imports of necessary inputs, all of which affect development. Trade liberalization may not all be good,
however—it may lead to increased income inequality, and balance-of-payments crises. We will discuss
measures that seek to address such problems.
In analyzing the proper role of the government, we will study the use of fiscal, monetary and trade
policies to foster economic development.
Finally, we will explore the relevance of trade agreements, such as WTO and NAFTA, for developing
countries; we will study how economic growth, and the environment, are likely to be affected as a result
of the trade accords.
Pre-requisite: EC101 Principles of Macroeconomics
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Student Learning Outcomes
The learning outcomes for this course are as follows:
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Students will evaluate and analyze models of economic growth.
Students will communicate effectively in written and oral forms.
Students will develop and use mathematical models of economic behavior.
Students will use data analysis to explain economic phenomena and to test economic theories.
Contents in brief
The following table lists the main topics that we plan to cover in the course. In case we find ourselves
strapped for time, we may have to limit the material accordingly.
1. Introduction
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Characteristics of LDCs
Economic growth and economic development
2. Measuring development
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GDP as a measure of welfare
Other indicators of economic progress
Income inequality and poverty
3. Theories of economic growth
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Harrod-Domar model
Solow model
Endogenous growth models
4. Domestic saving and investment
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Capital formation
Fiscal policy
Monetary policy
5. Foreign capital flows
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Multinational corporations
Foreign aid
World Bank, IMF
Debt crisis
6. Population and Human capital
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Demographic transition
Returns to education
Brain drain
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7. Rural development
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Land reform and agriculture
8. International trade
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Comparative advantage
Trade as a handmaiden of growth
Trade as a hindrance to growth
Terms-of-trade arguments
9. Trade policies
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Import substitution
Devaluation
Export promotion strategy
Political economy
10. Trade agreements
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WTO, NAFTA
Effects on the environment
Readings
The required readings for the course are:

Acemoglu, Daron and James Robinson (2013). “Why Nations Fail: The Origins of Power,
Prosperity, and Poverty.” Crown Business. ISBN: 0307719227.

Banerjee, Abhijit and Esther Duflo (2012). “Poor Economics: A Radical Rethinking of the Way
to Fight Global Poverty.” Public Affairs. ISBN: 9781610390934.
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World Development Report 2015 (World Bank). Available for free download at
http://www.worldbank.org/en/publication/wdr2015

Human Development Report 2014 (United Nations). Available for free download at
http://hdr.undp.org/en
I shall provide a great deal of the course material on the web site at
http://users.etown.edu/p/pauls/ec311. Here, you will find an (undoubtedly) exciting panoply of lecture
outlines, exercise sets, and assignments. These are updated frequently as the course progresses. The
site provides several additional links--to the Department of Business (requirements for majors and
minors, study tours, jobs and internships), sites for economic data and articles, even one devoted to
economist jokes. Suggestions for improving the site are always welcome.
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Evaluation
The grade for the course will be determined by your performance in: (i) tests, (ii) assignments, and (iii) a
term paper and presentation. The contributions of each to the final grade are as follows:
Grading scale
93-100
90-92
%
A
A-
Test 1
Thu, Sept. 17
20%
Test 2
Thu, Oct. 22
20%
Test 3
Finals week
Tue, Dec. 11, 11am
20%
Assignments
20%
Term paper & presentation
20%
Total
100%
87-89
83-86
80-82
77-79
73-76
70-72
67-69
63-66
60-62
0-59
B+
B
B-
C+
C
C-
D+
D
D-
F
Term paper and presentation
You (your team) will write a paper on a relevant topic in economic development. The paper will consist
of 15-20 pages and the presentation of the paper will occur toward the end of the semester. More
details will be provided later.
Make-up tests
A test will be given again only under exceptional circumstances - e.g., very poor health. In all other
cases, a missed test will result in a score of zero for the test.
Attendance
Attendance is not mandatory. You are, however, well advised to attend all classes regularly. If you
absent yourself from class, you are likely to do poorly on the tests and assignments.
Academic integrity
Students are expected to adhere to the Pledge of Integrity at Elizabethtown College. In this
course, you are not permitted to collaborate on the tests. In the case of assignments, however,
you are allowed, and in fact urged, to discuss the exercises with your classmates before writing
up the answers yourself. Each assignment should bear the student's name and signature
signifying that the student has fully conformed to the Pledge of Integrity. Any breach of
academic integrity will be dealt with in accordance with the policy stated in the College Catalog.
Email communication etiquette
Start emails with an appropriate salutation (Dear Dr. Paul, for example). End them with your
name.
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Always provide a subject in the subject line. Include “EC311” in the subject, so that I know right
away it is from a student in the class.
Use standard English, with proper spelling and grammar. If you write “i cant send u my sa til
later ttyl”, I will not know what it means and will consequently ignore it altogether.
Make sure your @etown.edu inbox is not full. If it is, my emails to you will not reach you, and
you will be left in the dark. Do not be left in the dark!
Disability
Elizabethtown College welcomes otherwise qualified students with disabilities to
participate in all of its courses, programs, services, and activities. If you have a
documented disability and would like to request accommodations in order to access
course material, activities, or requirements, please contact the Director of Disability
Services, Lynne Davies, by phone (361-1227) or e-mail [email protected]. If your
documentation meets the college’s documentation guidelines, you will be given a letter
from Disability Services for each of your professors. Students experiencing certain
documented temporary conditions, such as post-concussive symptoms, may also qualify
for temporary academic accommodations and adjustments. As early as possible in the
semester, set up an appointment to meet with me, the instructor, to discuss the
academic adjustments specified in your accommodations letter as they pertain to my
class.
Class Cancellation
Classes may be occasionally cancelled for reasons pertaining to adverse weather conditions, health,
travel and other emergencies. In such cases, I will make every effort to notify you as soon as possible
and make suitable alternative arrangements.