IKT 411: PRINCIPLES OF DEVELOPMENT ECONOMICS
Development: The process of improving the quality of all human lives and capabilities by raising people’s levels of living, self-esteem, and freedom.
Kaynaklar: Todaro and Smith, Economic Development; Debraj Ray, Development Economics; David Weil, Economic Growth. Ray’s webpage: http://www.econ.nyu.edu/user/debraj/
2013 Human Development Report and its Technical Appendix:
* Final exam schedule has been announced by the university administration.
To be Done:
- How does Amartya Sen define capabilities?
- Download GDP per capita (current USD) data from World Bank's website.
- What are the Millenium Development Goals?
- What are the Sustainable Development Goals?
- How is the Human Development Index calculated?
- Find the latest rankings of the HDI. What is the ranking of Turkey?
- What are the common characteristics of developing countries?
Q1: Rank the following countries by GDP per capita (current USD)
a) Turkey, Russian Federation, Iran
b) Turkey, Mexico, OECD average
c) Turkey, China, India, South Africa, Brazil
Q2: How good is GDP per capita as a measure of development?
State 3 disadvantages.
Q3: Suppose that purchasing power parity between Turkey and the US is 2 and the market exchange rate between Turkish lira and US dollar is 5.
a) Suppose that a basket of goods costs 100 dollars in the US. How many TL do you need to purchase the same basket of goods in Turkey?
b) How much are 100 US dollars worth in Turkey? (Imagine an American travelling to Turkey.)
(Note: Sections 2.5, 2.6, and 2.7 in Todaro-Smith (12th edition) will be covered later in the semester.)
1) How is the Human Development Index calculated for Turkey? What is the HDI ranking of the country? What is the HDI classification (very high, high, ...))? (Ahmet Atakan Alemdar)
2) What is the main idea of the Linear Stages Theory? What are the main criticisms of the theory? What does the Harrod-Domar model say? (Emre Yusuf Aksu)
3) What is the main idea of the Structural Change and Patterns of Development Models? What are the main criticisms of these models? (Mehmet Yerlikaya)
4) What are the main criticisms of the Lewis two-sector model? (Hüseyin Tosun)
5) What are the main ideas of the Neocolonial Dependence Model, the False-Paradigm Model and The Dualistic Development Thesis? What are the main criticisms of these models? (Ertuğrul Talha Canatar)
6) Show that in the Solow model with production function Y=K^alpha . L^(1-alpha), there are diminishing returns to capital accumulation. (Yiğit Alp Şirek)
7) In the Solow model, what is effect of an increase in the depreciation rate on steady-state income per capita? Explain by using a graph.( )
8) In the Solow model, what is effect of an increase in the saving rate on steady-state income per capita? Explain by using a graph.(Alper Gencer)
9) In the Solow model with technical change, what is the steady-state growth rate of income per effective population? What is the steady-state growth rate of income per capita? (Sait Demirtaş)
10) Ray, Chapter 5, lecture notes page 5. Graph: Old sector versus new sector ( Orhun Eryılmaz)
11) Romer model of technological spillovers. Describe the state-state. Todaro-Smith textbook page 163 (end of Chapter 3) (Yusuf Kılınç)
12) What is the Solow residual? Describe how you would estimate the Solow residual? (Alper Ünalan)
13) In the Lucas (Journal of Monetary Economics, 1988) model, what is the source of long-run growth in per capita income? In this model, is there a role for government policy to support economic growth? (Nur Eltürk)
14) In the Romer model with externalities, what is the source of long-run growth in per capita income? (Hacı Ali Tuştaş)
15) In the Romer model with an R&D sector, what is the source of long-run growth in per capita income? Why do we say that "knowledge has public good characteristics"? (Hüseyin Büyükfidan)
16) What is a complementarity? How would complementarities generate multiple equilibria? (Yiğit Erol)
17) Imagine an economy in which firms need specialized skills and workers who need to invest in those skills. What is the complementarity? Explain how a coordination problem can trap the economy in a bad equilibrium. (Levent Arık)
18) Explain why the where-to-meet dilemma differs from the prisoners' dilemma. (Dila Naz Güner)
19) Income distributions A, B, and C are shown below, where the numbers in the first set of parentheses represent incomes and the numbers in the latter represent numbers of individuals with those incomes:
A: (100, 200, 300); (25, 50, 25)
B: (100, 200, 300); (40, 20, 40)
C: (100, 250, 300); (40, 40, 20)
Which income distribution has the highest/lowest inequality?
a) Calculate the Coefficient of Variation (CV) (Tarık)
b) Calculate the Gini coefficient (Miray)
c) Draw three Lorenz curves on one graph. (İsmail)
20) Consider the following income distribution:
(0.6, 0.6, 0.8, 0.8, 2, 2, 6, 6). The poverty line is set at 1.
a) The headcount ratio (Kürşat)
b) Average and normalized poverty gap (Kürşat)
c) Average and normalized income shortfall (Kürşat)
d) The P0, P1, and P2 measures (Foster-Greer-Thorbecke) (Ceren)
21) What are the principal economic characteristics of high-poverty groups? What do these characteristics tell us about the possible nature of a poverty focused development strategy? (Alparslan Geyik)
22) Describe Kuznets’s inverted-U hypothesis. Discuss the conceptual merits and limitations of this hypothesis for contemporary developing countries. (Elif Rana Oğuz)
23) How might inequality lead to faster growth or development? How might it lead to slower growth or development? (Mustafa Önel)
24) Why does an exclusive preoccupation with maximizing rates of GNI growth conflict with broader social objectives such as the eradication of poverty and the reduction of excessive income disparities? Answer by using the Ahluwalia-Chenery Welfare Index. (Ersu Ulucak)
25) What are the 3 phases of demographic transition?
To be done later in the semester:
Check out the inequality statistics in the following sheets.
Read "What is so bad about extreme inequality?" (Source: Todaro and Smith, see below)
http://www.youtube.com/watch?v=QPKKQnijnsM (wealth inequality in america).
"EQUALITY OF OPPORTUNITY" Book by John E. ROEMER, 1998, Harvard University Press.
Preview available at Google books.
"The Economic Lives of the Poor", by Abhijit V. Banerjee and Esther Duflo
October 2006 http://economics.mit.edu/files/530
THE NEW DEVELOPMENT ECONOMICS: WE SHALL EXPERIMENT, BUT HOW SHALL WE LEARN?*
Dani Rodrik, July 2008
Check out the figure of the Evolution of the World Distribution of Income on Xavier Sala-i Martin's webpage.
Eric Thorbecke "THE EVOLUTION OF THE DEVELOPMENT DOCTRINE, 1950-2005 "http://www.rrojasdatabank.info/widerconf/Thorbecke.pdf
Divided We Stand -Why Inequality Keeps Rising, December 2011
OECD'nin eşitsizliğin artışına değindiği raporuyla ilgili bilgilere şu linkten ulaşabilirsiniz:
The Colonial Origins of Comparative Development: An Empirical Investigation
By DARON ACEMOGLU, SIMON JOHNSON, AND JAMES A. ROBINSON, American Economic Review, Vol. 91, No. 5 (Dec., 2001), pp. 1369-1401.http://econ-www.mit.edu/files/4123
Barro, Robert (2000) "Inequality and Growth in a Panel of Countries", J of Economic Growth, March. http://www.economics.harvard.edu/faculty/barro/files/p_inequalitygrw.pdf
“Measuring Inequality of Opportunity with Imperfect Data: The Case of Turkey”, Ferreira, Francisco H. G., Jérémie Gignoux and Meltem Aran (2010), Policy Research Working Paper 5204, February, The World Bank.
Türkiye: Gelecek Nesiller İçin Fırsatların Çoğaltılması, “Yaşam Fırsatları” Konulu Rapor, Rapor No 48627-TR
Şubat, 2010, Dünya Bankası http://siteresources.worldbank.org/TURKEYEXTN/Resources/361711-1270026284729/ExpandingOpportunitiesForTheNextGeneration-tr.pdf
Sources of Long-Term Economic Growth for Turkey, 1880-2005, Sumru Altuğ, Alpay Filiztekin, and Şevket Pamuk http://www.cepr.org/meets/wkcn/1/1658/papers/Altug.pdf
History Versus Expectations, Paul Krugman, The Quarterly Journal of Economics, Vol.106, No.2.(May, 1991), pp. 651-667 http://www.isid.ac.in/~tridip/Teaching/DevEco/Readings/03Expectations/06Krugman-QJE1991.pdf
Economic Growth in a Cross Section of Countries
Robert J. Barro
The Quarterly Journal of Economics, Vol. 106, No. 2. (May, 1991), pp. 407-443. http://www.hec.unil.ch/ocadot/ECODEVdocs/barro-robert.pdf
A Contribution to the Empirics of Economic Growth, Gregory Mankiw, David Romer, David N.Weil
The Quarterly Journal of Economics (1992) 107(2):407-437 http://www.amenezes.uac.pt/macroeconomiaII/macroeconomiaII_20062007/papers/mrw1992.pdf
On the Mechanics of Economic Development, Robert E.Lucas
Journal of Monetary Economics 1988 (22) 3-42 http://www.fordham.edu/economics/mcleod/LucasMechanicsEconomicGrowth.pdf
Resistance to Reform: Status Quo Bias in the Presence of Individual- Specific Uncertainty; Author(s): Raquel Fernandez and Dani Rodrik; Source: The American Economic Review, Vol. 81, No. 5 (Dec., 1991), pp. 1146-1155 http://www.jstor.org/stable/pdfplus/2006910.pdf?acceptTC=true
A Contribution to the Theory of Economic Growth, Robert M. Solow
The Quarterly Journal of Economics, Vol. 70, No. 1. (Feb., 1956), pp. 65-94. http://faculty.lebow.drexel.edu/LainczC/cal38/Growth/Solow_1956.pdf