Development Economics II

More than a billion individuals, mostly in low and middle income countries, live on less than $1.25 a day. The aim of this course is to broadly address the question: why are poor countries poor? In particular, we seek to identify both features of the organization of a poor economy as well as its external environment that could generate, perpetuate, and alleviate poverty at the macro-level. A mix of theoretical and empirical studies are utilised for this purpose. Among other topics, the following are highlighted:

• What are the relationships among growth, inequality, and poverty?
• What are the empirical patterns of growth?
• What are the deep determinants of economic development?

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

• Explain the central characteristics of the economic development after the industrial revolution.
• Critically assess how to measure economic and social development.
• Explain different measures of poverty and inequality, and how these affect and are affected by the level of income in an economy.
• Understand different theories of economic growth and how these explain empirical patterns in growth and prosperity.
• Understand how economic transactions on the micro-level in poor countries are characterized by information asymmetry, transaction costs and incomplete contracts.

Spring