Document Type

Graduate Syllabus

Date

Fall 2016

School

Diplomacy

Course Number

DIPL 6153

Course Description

This course deals with selected topics in economic development covering both macro and micro aspects. We will learn about the growth models (Sollow and modern models), history and expectations, inequality, institutional economics, agricultural markets and financial markets as well as foreign aid and development assistance. This course is a complementary to the topics covered in detailed in DIPL6155 (Advanced Economic Aspects of International Relations). “Political Economy” is not a unified discipline, and there are studies using the term that have radically different perspectives. Therefore it may be the case that some of you feel that why we study those topics in this course and where we are heading. So here is my big picture. Traditional economics, which is sometimes referred to as neoclassical economics, hinge on certain assumptions. The growth models are not the exceptions (particularly the Solow model is naturally classified as neoclassical model) and they are based on many implicit and explicit assumptions. In a context of development, under ideal circumstances, as the Solow model predicts, people save and invest, and thus capital stock is accumulated which leads to economic growth at least to some extent. However, unfortunately, the process is not automatic at all in practice. We need macroeconomic stabilization in order for the sizable investment realized. Nevertheless, stabilization is not the sufficient condition for development–we also need lots and lots more preconditions. The world and society are more complicated and countries and regions are more varied than the traditional economics assumes, and thus considering the role of government, legal framework, and market structures are important. Fortunately, there has been a rapid advancement in economics in last several decades and many useful frameworks, with which we can approach to more realistic structures, have been provided (i.e. more rich frameworks explaining why and how countries and regions differ). I would like to pick up several of those frameworks which are important and relevant to “development” in the second half. This is what I consider “political economy of development”. Of course, I am not discounting the topics we covered in the first half–we should regard the newer frameworks as complements rather than substitutes to the neoclassical models. The Solow model, indeed, is quite useful and practical as a first approximation. Course materials are designed to develop analytical skills and you should be equipped with economic mind after the semester. The emphasis of this course is on analytical thinking and the goal is that you get a hands-on taste of how economists approach problems of development. Rather than just being informed of factual knowledge, you can acquire ability and skill to understand backgrounds of certain phenomena and analyze how we might bring about improvements. To this end, the bulk of the course will be devoted to in-depth analysis of fundamental economic questions and I will introduce theoretical models in each topic. A model is a simplified and abstract representation of reality, in the sense that it isolates and focuses on the most important elements of a situation and neglects the others. If and when you confront real world problems, you will find it necessary to adapt these principles to all the details and nuances of reality. Unfortunately we will stick to most basic models in this course due to time and technical constraints, however, they will enable you to pursue their refinements in future.

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