Econ 240 Development Economics (4 credit hours) Fall
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1 Econ 240 Development Economics (4 credit hours) Fall Instructor: Syeda ShahBano Ijaz Office: Room 290, Department of Economics Office Hours : Wednesday, 12 :00 1 :30 pm Prerequisites: Principles of Macroeconomics OR Principles of Microeconomics Course Objectives: This is an introductory course to development economics, which will examine economic problems and potentials of developing economies. A predominant portion of the course covers the essential theoretical and historical elements of development and international economics. Some specific issues currently debated in the development economics field will also be discussed. The topics/modules covered are the following: The Concept & Nature of Development Theories of Development Poverty, Income Distribution & Development Urbanization and Rural-Urban Migration Human Capital: Education & Health Agricultural Development Industry and Development Trade Policies Sustainable Development Balance of Payments, Debt & Macroeconomic Stabilization Foreign Finance, Investment & Aid Topics in Development & Conclusion Lectures and Examinations: There will be 27 sessions of 110 minutes each One session will be an in-class midterm The final exam will be comprehensive 1
2 Evaluation: Quizzes 20% (four, unannounced) Midterm 25% Final Exam 35% Term Paper & Presentation 20% Texts: The course will be taught through a text book and chapters from relevant books. The reading package is the required textbook; one or two additional readings will be assigned for some topics and will be available at the reprographic center in advance. Main text: Todaro, Michael P. and Stephen C. Smith, Economic Development, Eighth Edition, Addison-Wesley, Secondary Texts: The text will be supplemented by selected chapters from the following books where mentioned: Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Michael Roemer, Economic Development, 5 th edition, New York, W.W. Norton, 2001 (henceforth GPRRS) Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, 6 th Edition, New York, W. W. Norton, 2006 (henceforth LPR) Course Content: Module 1: The Concept & Nature of Development (Todaro 1 & 2) This topic covers the following: -Overview of the course -The Concept & Nature of Economic Development -An overview of diverse structures and common characteristics of developing countries Module 2: Theories of Development (Todaro 3 & 4 & LPR 3 & 4) This topic is covered over two weeks and discusses theories of growth and development that have been developed over the past five decades. These lectures will discuss the problems with these theories from a historical perspective. It includes the following: -Introduction a) The Growth Game -The Economics of Growth: K, L & Tech 2
3 -Kuznet s -Differing Initial Conditions b) Classic Theories: -Linear Stages Theories & the Harrod-Domar Model -Structural Change Models -The International Dependence Revolution -The Neo-Classical Counterrevolution c) Contemporary Models: -The New Growth Theory Module 3: Poverty, Income Distribution & Development (Todaro 6 & 7) This lecture will discuss the various approaches to the measurement of poverty conceptualising the characteristics of the poor. This topic will also discuss the effects of income distribution on poverty and development. This lecture includes the following: -Measuring Income Distribution & Poverty -Social Welfare -Absolute Poverty -Characteristics of Poverty -Demo Transition -Causes of High Fertility in Poor Households -Policy Implications & Options Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, Chapters 6 and 7. Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Economic Development, Chapter 4. Module 4: Urbanization and Rural-Urban Migration (Todaro 8) This module will explore the migration and urbanization dilemma. Our purpose will be to analyze the push and pull factors that case rural to urban migration, and the importance of this pattern to the growth of an economy. -Urban Unemployment -Migration and Development -Toward an Economic Theory of Rural-Urban Migration -The Shape of a Comprehensive Migration & Employment Strategy Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Economic 3
4 Development, Chapter 8. Module 5: Human Capital: Education & Health (Todaro 9) This lecture will try to establish the role played by education and health on economic development. International trends will be discussed to analyze the role of health and education in development. The lectures will cover the following: -Education & Health in Development -International Trends -The Human Capital Approach -Child Labor & Education for Women -Educational Systems -Health Systems -Policy Implications & Options Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, Chapters 8 and 9. Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Economic Development, Chapters 9 and 10. Module 6: Agriculture and Development (LRP 15) This chapter discusses the importance of agriculture in developing countries by looking at problems which have direct bearings on raising agricultural productivity and farmer s incomes. Under our framework we look at land tenure systems, property rights and the use of agricultural inputs. -Role in Economic Development -Modernizing Traditional Agricultural -Land Tenure and Land Reform -Agricultural Price Policies Module 7: Industry and Development (LRP 17 & 20) Development and the process of industrialization have been treated as synonymous since the Industrial revolution. In this section we will look at how this process occurs and its ramifications on the development process. -Industry as Leading Sector -Investment choices in Industry -Sustainable Development 4
5 Zaidi, S. Akbar, Issues in Pakistan s Economy, Karachi, OUP, Module 8: Trade Policies (Todaro 13, LRP 16) This topic includes a critical overview of the main strands in trade theory applied to developing countries. The lecture discusses the following: -Primary Exports -Alternative Trade Strategies -Trade between Developing Countries -Policy Options for Developing Countries Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, Chapter 19. Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Economic Development, Chapter 18. Module 9: Balance of Payments, Debt & Macroeconomic Stabilization (Todaro 14) This topic reviews the causes and consequences of the international debt crisis. It looks at the processes of debt accumulation, repayment, and the nature, implementation and consequences of stabilization and structural adjustment programs. -The Balance of Payments Account -Reducing Payments Deficits -The Debt Crisis -Alleviating Debt Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, Chapter 15. Perkins, Dwight H., Steven Radelet, Donald R. Snodgrass, Malcolm Gillis, Economic Development, Chapter 14. Module 10: Foreign Finance, Investment & Aid (Todaro 15) This topic analyses the financing of development. It also reviews the role of foreign capital in development, including foreign direct investment by transnational companies, portfolio investment, and the strategy and implications of domestic financial liberalization and capital account liberalization. The need for foreign aid in developing countries and the role played by it will also be discussed. -The International Flow of Capital -Private Foreign Direct Investment 5
6 -Foreign Aid Perkins Dwight H., Steven Radelet, and David L. Lindauer, Economics of Development, Chapter 14. Module 11: Topics in Development & Conclusion (Todaro 16) This session summarizes the main topics discussed in the course, and reviews some of the main challenges and outstanding issues facing developing countries at the start of the twenty-first century, especially stemming from globalization. 6
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