Development economics sequence developed by Abhijit Banerjee, Rob Thomas, David Atkin, Ben Olken, and Esther Duflo.
Course Structure
Syllabus: Available on Canvas; accessible to all for now.
Classes held on Mondays and Wednesdays, with weekly recitations.
Students must read a paper before each lecture and post comments/questions on Piazza 24-48 hours prior to class.
Course Objectives
Focus on understanding how poor people live and the methods to study economic issues in developing contexts.
Emphasis on empirical methods in economics.
Encourage students to think about building research proposals and replicating empirical exercises.
Requirements
Participation in class discussions.
Problem sets focused on empirical methods.
Replication exercise and research proposal.
Importance of Development Economics
Development economics is relevant for economists across all fields.
Examines how the poorest live their lives and the implications of income differences.
Key Measurements
Gross National Income (GNI) vs. GDP:
GNI includes income of residents regardless of location, while GDP measures production within a country’s borders.
GNI may provide a better measure of living standards.
Purchasing Power Parity (PPP)
Adjustment that accounts for price differences across countries.
Difficulties in measuring PPP due to differences in consumption baskets and quality of goods.
Political implications of poverty measurements and how they affect international assistance.
Income Disparities
Richest countries (e.g., Macau, Luxembourg, Norway) and poorest countries (e.g., Burundi) show stark contrasts in GNI per capita.
Mortality rates correlate with income levels; understanding income differences is crucial for development policies.
COVID-19 Impact on Development
Discrepancies in vaccination rates and fiscal responses between rich and poor countries during the pandemic.
Rich countries spent about 20% of GDP on fiscal stimulus; poorest countries spent around 2%.
The long-term effects of COVID-19 on poverty and economic growth are uncertain.
Historical Context and Improvement in Welfare
Education and health improvements have been noted in many developing countries, leading to reduced mortality rates and increased schooling years.
Pre-COVID projections indicated a decline in global poverty rates, but the pandemic has reversed this trend.
Measuring Poverty
The international poverty line is set at $1.90 (PPP).
The COVID-19 crisis has disrupted data collection, making it difficult to measure current poverty levels accurately.
Causes of Economic Growth Differences
Historical and geographical factors play a role, but internal policies and governance are critical for development.
Increasing awareness of the need for effective policy-making in health and education.
Poverty Traps
The concept of poverty traps suggests that poor individuals may remain stuck in poverty without significant external help.
The lecture highlights the role of effective transfers and asset-building programs in breaking the cycle of poverty.
Conclusion and Future Directions
The course aims to explore various economic problems specific to poor countries and discuss policies that could address these issues.
There will be a focus on understanding the internal factors affecting growth and poverty, and the potential for improving these conditions through informed policy decisions.