Download economic development course proposal

ECONOMIC DEVELOPMENT COURSE PROPOSAL
The basic aim of lectures will be as follows:
To present the political and public concern with the poorer nations of the world and understand the
main problems of today’s economic life, how today’s economy works, what are the main
controverseries of the existing world economic system, problems of the developing countries,
defencies of globalization and regionalism, third world debt problems, problems of international
financial system and capital markets, energy problems.
TEACHING PLAN:
LECTURE 1. WHY STUDY DEVELOPMENT ECONOMICS?
The nature of development economics and why we study development economics questions are going
to be answered. The difference between development and growth will be explained. The main ways of
comparing living standards of different countries such as, per capita income, purchasing power parity,
human development index and human poverty index will be examined in detail. To understand
whether the distribution of income is fair or not, Gini coefficient and Lorenz Curve analysis will be
introduced. Moreover the question of whether the poor countries ever catch up with the rich countries
(the prediction of the neoclassical economics) or not will be examined in terms of convergence
criteria. The importance of social indicators will be discussed.
LECTURE 2. GLOBALISATION
What are the opportunities and risks of globalisation, whether globalisation is creating the conditions
for faster economic growth through access to ideas, technology, goods and capital or it causes rising
level of inequality and poverty will be discussed? The GATT agreement sets out broad rules
governing national policies that influence international competition, including tariffs, quotas, foreign
investment regulations, agricultural subsidies, patents and copyrights. As nations have become more
interdependent in recent decades through growth in international trade and investments, trade conflicts
have become more evident. Benefits and challenges of globalisation will be evaluated in this week.
Is globalisation a source of income convergence” question will be answered by depending on
empirical evidence. The neoclassical growth model suggests that the standard of living in poor
countries will eventually converge to the level in wealthy countries. Alternative theories, for one
reason or another, say the opposite. Different results of related research papers will be presented to
understand whether empirical evidence is supporting convergence or divergence, whether the
difference between the richest countries is getting smaller or bigger, whether there is equality in the
distribution of income between countries and within countries.
LECTURE 3. THE DIVISION OF THE WORLD (HISTORICAL PERSPECTIVE)
In order to analyze the problems of contemporary poor countries it is essential to understand how they
became “less developed” than today’s rich countries and how they have attempted to catch up. The
main focus of this week is on the division of the world into agricultural and industrialized countries. A
turning point chronology of countries will be analysed. This chronology stems from three major
epochs in the world economy will be reviewed under three main headings as follows, 1) World
Economic Boom (1850-1914), 2) The Longest Depression (1914-1945) and 3) The Greatest Boom (
1945-1973).
How the diffusion of modern economic growth occurred in three main forms which are the spread of
Industrial revolution from Britain to her colonies, within Europe, from Europe to Latin America,
Africa and Asia. The waves of Industrial Revolution will be discussed as well.
LECTURE 4. WHY SOME COUNTRIES FAIL TO THRIVE
The theories of economic development will be explained to understand the current differences in the
living standards of the world countries.
Of the world’s population of 6.3 billion, roughly 5 billion people have reached at least the first rung of
economic development. Five sixths of the world’s population is at least one step above extreme
poverty. Moreover, approximately 4.9 billion people live in countries where average income measured
by GDP per person increased between 1980 and 2000. An even larger number, roughly 5.7 billion
people live in countries where life expectancy increased.
Precisely because economic development can and does work in many parts of the world, it is all the
more important to understand and solve the problems of the places where people are still off the ladder
of development or are stuck on its lowest rungs.
In economic growth, eight major categories of problems can cause an economy to stagnate or decline.
a. the poverty trap(poverty itself as a cause of economic stagnation), b.physical geography, c. fiscal
trap, d. governance failures, e. cultural barriers, f. geopolitics, g. lack of innovation, h. the
demographic trap. The effects of these factors will be discussed this week.
LECTURE 5: GLOBAL INTERDEPENDENCE AND CRISIS IN SOUTH-EAST ASIA, IN
RUSSIA, IN LATIN AMERICA
In the autumn of 1992 a wave of speculative attacks hit the EMS and its periphery it is followed by
Mexican peso attack in late 1994 this attack caused an immediate attacks in other Latin American
countries especially in Argentina, Brazil, Peru and Venezuela. In late 1997 an attack began on
Thailand (bath) and this crisis spread across the Pacific to Chile and Brazil. Hong-Kong and Korea
were attacked later as well. Officials and their critics responded with ideas for radically overhauling
the international financial system.
The international financial system is a dense network of social, economic, and financial institutions.
The international monetary and financial system has evolved incrementally from the gold standard to
the gold exchange standard, to the Bretton Woods gold-dollar system, and now to the post-Bretton
Woods “nonsystem”. To limit the threat to international financial system, to limit the frequency of
crises and strengthening the financial system what kind of measures are advised and discussed today
will constitute the main topic of the week.