Development Economics I

This course introduces the students to the central issues of economic development in poor countries. It is observed that there are large differences in the material well-being between rich and poor countries, and further, this difference continues to grow over time. In addition to introducing the students to the relevant economic concepts and variables, this course will go through different theories that explain economic development and growth (or the lack of development and growth).

The key issue here is the large and ever-increasing income differential between rich and poor countries. Data will be presented that show these income differentials and how these evolve overtime, and in addition, we will discuss theories that shed light on the causes of these. The course will also give an introduction to how different economic institutions and markets, (e.g., labour and credit markets), function in poor countries, and discuss the existence of certain economic mechanisms that reproduce and reinforce poverty - poverty traps.

Having completed the course, the students should be able to:

• Explain inequalities between rich and poor countries, how the differences have evolved over time and how other measurements of quality of life correlates with per capita income.
• Explain the concept of economic growth.
• Have knowledge of different measurements of poverty and inequality, and pros and cons of the different measurements. The student shall understand different characteristics of world demographics and explain how population growth affects other economic circumstances.
• Explain the development of international trade patterns and central theories of international trade.
• Have knowledge of central multilateral humanitarian organisations and their role.
• Use models as tools for analysing e.g. differences between rich and poor countries and effects of economic growth on inequality and poverty.