Unit 4 Macro must-read - Development Economics: Why is Liberia’s development so slow?
Liberia has an apparently stable government, plenty of aid available, and the debt hanging over the country has been written off.
And yet, as Evan Davis explains in this valuable article, for many people in Liberia, conditions are still medieval.
Regular listeners to Radio 4's 'Today' programme will know that they have run a series of reports about Liberia. It's economy is in ruins, after years of civil war. That conflict was partly funded by exports of timber and diamonds, and the UN placed bans on those exports. However, those bans were lifted in 2006 and 2007 respectively, so why does Liberia still record unemployment of 80%?
Evan explores the multiple causes of the problems which hold the country back, and condemn it to a catch-22 in which investment cannot easily occur. It should be highly attractive as a destination for inward investment, with wage
rates of about $5 a day in the formal sector of the economy (about a fifth of those in the most industrial parts of
China). But for industrial development, as the article points out "...you first need electricity; for electricity, you need some trained
workers; for trained workers, you need some schools; for schools you
need some money; for money, you need some industry."
There are other examples of the practical issues which individually hold back progress, and which combine to slow it to a barely perceptible crawl. The article provides a superb example of how to analyse the factors that might hold back development, and is a must-read for unit 4 students over Christmas!
Unit 4 Macro: Indian Economic Growth is Slowing
The rate of growth in the Indian economy seems to be slowing down and poses challenges for a government that needs a good rate of growth to support development and further progress in cutting extreme poverty. Asia's third largest economy has seen a reduction in the annual growth of real GDP. The country's growth rate came in at 5.3% during the third quarter of 2012.
According to this Guardian news article:
"Analysts say India needs to take more steps quickly, including speeding up approval for infrastructure projects, overhauling the tax system and reducing its swollen deficit to revive capital investment."
Growth has been hit too by persistently high rates of consumer price inflation which has caused business costs to rise and squeezed real incomes for many millions of India's emerging middle class.
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Development Economics Glossary - R to W
Glossary of some key terms in development economics - R to W
read more...»Development Economics Glossary - M to Q
Glossary of some key terms in development economics, M to Q
read more...»Development Economics Glossary - H to L
Glossary of some key terms in development economics from H to L
read more...»Development Economics Glossary - E to G
Glossary of some key terms in development economics - E to G
read more...»Development Economics Glossary - C to D
Glossary of some key terms in development economics - C to D
read more...»Development Economics Glossary - A to B
Glossary of key terms on development economics (A-B)
read more...»Unit 4 Macro: Paul Collier - Why Poverty
Here is a terrific 15 mins audio lecture from development economist Paul Collier and broadcast on BBC 3 recently. Paul Collier, author of "The Bottom Billion", Professor of Economics and Director of the Centre for the Study of African Economies, Oxford University, advocates the giving of overseas aid only to countries without a "credible prospect of escaping mass poverty over the next generation."
"Properly justified, and clearly bounded, most British people have the decency to support turning despair into hope. But people should not be expected to aquiesce if co-erced through taxation into meeting need wherever on the globe it is found." "Why Poverty?" features five speakers on different aspects of the subject of poverty and is part of a pan-BBC season of programmes on the topic.
Click here to access the lecture
read more...»Unit 4 Macro: Mo Tanweer - Debunking the Myths of China
Mo Tanweer (Head of Economics at Oundle School) gave a phenomenally detailed and relevant talk at our Teaching the Global Economy Conference in London last week. Student Economist Mark Austen has provided us with some revision notes taken from the talk (reproduced below) and we have a streamed version of the presentation made available from Mo using Slide Share - enjoy!
read more...»Unit 4 Macro: Paul Collier on Key Development Issues
At our Teaching the Global Economy at the RSA (London) in November 2012, the distinguished development economist Professor Paul Collier spoke on some of the leading development issues of the moment. A-level student Mark Austen was there to scribe some notes on the talk and the subsequent Q&A discussion. Here are his notes together with some connecting links and other resources. We hope that you find them useful.
read more...»Unit 4 Macro: Growth in the Emerging Economies - Can It last?
I am linking here to a recent (October 2012) lecture and discussion at Gresham College in London. The three eminent speakers look at the limits to world economic growth from an environmental and economic perspective. Will inflation caused by rising primary product prices be likely to be the key constraint on economic growth? Douglas McWilliams, Thras Moraitis and Mike McWilliams consider whether this constraint will bite at a sufficiently slow rate for the impact of the extra growth in emerging economies to mean that the West will have to grow more slowly.
read more...»Unit 4 Macro: Revision Resources on the BRIC Countries
Here are some regularly updated revision resources on the economics of the BRIC countries - Brazil, Russia, India and China
read more...»‘Why Poverty?’ - BBC series starting today
A very quick heads-up to a series that the BBC will be running over the next three weeks, and which looks very valuable for those studying Growth and Development topics. It kicks off tonight with Four Born Every Second, which looks at the life chances of newly born babies in the rich world and the poor world - BBC1 at 10.35.
There are some related links on their Debate page here
A hat tip to Ruth Tarrant for finding and sending through a link to a related resource for A2 macro on development/poverty etc: http://www.open.edu/openlearn/society/international-development/ou-on-the-bbc-why-poverty This ties in with the "Why Poverty?" series on BBC, but packed full of great resources to explore
read more...»Bangladesh: As good as it looks on paper?
In this superb piece, Lucy Stevenson, a student from Greenhead College explores growth and development progress in Bangladesh. Highly recommended for all A2 and AS macro students.
In a corner of South East Asia, a country once known as a ‘basket case’ due to its dependence on foreign aid and predicted struggle post-independence, is showing signs of strength despite the global downturn in the economy. With people crammed onto flood plains that are regularly swept by cyclones, Bangladesh hardly has the natural benefit of resources that many developing economies are armed with. However, this country formerly known as ‘the test case of development’ has shown that despite famines, military coups and catastrophic floods, it is possible to drastically improve the lives of the poorest without hanging around in wait of economic growth.
Unit 4 Macro: UK to End Financial Aid to India from 2015
Here are some links connected to the news that the United Kingdom is drawing to a close financial aid to India by the year 2015. The focus will shift from aid to trade. Bilateral trade between the countries in 2010 was worth £10 bn. The countries have set a target of £20 bn by 2015. We also link to a new Inside Story programme from Al Jaxzeerah on the continuing debate over the effectiveness of and future of overseas aid in the world economy.
read more...»Unit 4 Macro: Scoop.It on Development Economics
Follow this blog entry for my latest Scoop.It links covering aspects of development economics. This will be updated on a regular basis.
read more...»Unit 4 Macro: Looking to 2060: A Global Vision of Long-term Growth
The balance of economic power is expected to shift dramatically over the coming half century, with fast-growing emerging market economies accounting for an ever-increasing share of global output, according to new OECD research. Here are some links to their report and to media coverage.
Unit 1 Micro: Tragedy of the Commons and Market Failure
The “tragedy of the commons” is a metaphor used to illustrate the potential conflict between individual self-interests of producers and consumers and the common or public good.
In the original version of the term, the example is used of a stock of common grazing land used by all livestock farmers in a small village. Each farmer keeps adding more livestock to graze on the Commons, because the marginal cost of doing so is zero. But because the commonly own resource is then over-used or over-exploited, the result is a depletion of the soil and a fall in the value of the resource for all users. The resource may become irretrievably damaged.
The cause of any tragedy of the commons is that when individuals use a public good, they do not bear the entire social cost of their actions. If each seeks to maximize individual benefit, he ignores the external costs borne by others.
read more...»Unit 4 Macro: Revision Prezi on International Trade and Development
This blog entry provides a link to a live version of a new Prezi for A2 macroeconomics on aspects of international trade and development. You will be able to access the latest version of the Prezi each time.
read more...»Unit 4 Macro: Changing Patterns of Exports
A selection of visualisations from the MIT Media Lab Observatory of Economic Complexity - these cover changes in export patterns for a small cluster of developing and developed countries. What are the most notable and perhaps significant changes that students can identify?
read more...»Unit 4 Macro: Teaching Trade in a Different Way
I am launching into a short course in international trade, balance of payments and links to economic development issues. The standard fare is inescapable and there will be plenty of opportunity to cover theories of comparative and competitive advantage, evaluate the costs and benefits of protectionism and look at key trends in the balance of payments, terms of trade and capital accounts for developed and developing countries.
This time, in an attempt to freshen things up I am starting by looking at the work of Cesar Hidalgo and Richard Hausman at the MIT Media Lab and the Observatory of Economic Complexity. I first came across their work whilst reading Tim Harford's last book Adapt. They are mapping vast amounts of trade data from across the world to explore the extent to which export complexity, dynamic advantage and per capita incomes are connected. The data visualisations are tremendously interesting and I will be asking my Year 13 students to explore their site and choose some data of their own that sheds light on revealed comparative advantage in the world economy.
read more...»Unit 4 Macro: Micro Finance, Fair Trade and Development
Here is a streamed revision presentation on aspects of micro finance and fair trade as part of a course on development economics.
read more...»Rural life in China - never had it so good
This looks worth keeping an eye on - the BBC is "spending a week on the road looking at both the challenges ahead for the
world's most populous nation and the advances it has made." - this is in anticipation of the leadership changes which are about to take place in China. The first report looks at changes which have taken place over the last 50 years in a rural village near the Great Wall - others will follow later this week. Here is a link to Week in China , which contains all the video reports being added this week; Tuesday's looks changes in the cinema industry, including the demands of the WTO that China raise its annual quota of foreign film releases allowed into the country from 20 to 34; Wednesday's looks at the construction boom in Shanghai and by way of contrast Thursday's looks at Guizhou, the poorest province in the country, to illustrate the growing wealth gap in the country.
There is also a link to a series of graphics illustrating China's Economic Miracle which shows some of those mind-blowing statistics about the country's economy.
Doughnut Economics- very tasty!
Today I went to a fascinating and very thought-provoking lecture from Kate Raworth, a Senior Researcher for Oxfam GB. She introduced the audience to the idea of doughnut economics, and certainly convinced me about the usefulness of this very elegant and accessible development economics theory. I can't wait to share it with my classes when we're discussing sustainable development next year!
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Unit 4 Macro: Wage Inflation and Chinese Competitiveness and Growth
Unit 4 essay from Max Goswami-Myerscough
China has undergone high levels of wage inflation since the turn of the century. As stated in the extract, a US Bureau of Labour report showed that between 2002 and 2008 real hourly wages more than doubled in China’s manufacturing sector. Comparatively, wages only rose by 20% in the US. In addition to this, according to Jim O’Neill, by 2009 over 5% of the population of China (approx. 65 million) had incomes of around $35,000 p.a. China has been considered to be one of the main outsourcing destinations for cheap labour over the years but this may change if such high levels of wage inflation persist.
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Unit 4 Macro: Economics of Overseas Aid
I have uploaded onto slide share a revised short classroom presentation on the economics of overseas aid as part of our study of economic development.
Unit 4 Macro: Perspectives on Natural Resource Curses
My A2 students have been researching and writing about the economics of natural resource curses - some of their perspectives are provided below.
Unit 4 Macro: Perspectives on Chinese Wage Inflation
My students have been researching and writing about the rapid growth of wages in the Chinese economy. Here are some of their perspectives with each author appearing at the top of the relevant section.
Unit 4 Macro: Video Shorts on Economic Growth and Inequality
When teaching economic growth and inequality as part of our A2 macro course, I used these news clips to support the lesson and discussion.
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