Economic Development
Econ 157 Homework I

1. In defining development to include more than just the growth of per capita income, there is an implicit assumption that the growth of per capita income alone is not sufficient to guarantee the reduction of poverty and the growth of self-esteem. Is it possible that there could be growth of per capita income without the achievement of these other objectives?

2. Make a case that development economics might be merely a combination of all the other subfields of economics, only applied to low-income countries.

3. Explain how low levels of living can turn into a vicious cycle in developing countries.

4. Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries.

5. If countries are first ranked by level of real GDP per capita, and then by the value of the Human Development Index, would you expect the ranking of countries to be similar or different? Explain.

6. What are the main differences between the linear stages and international dependency models of development?

7. Describe one important criticism of Rostow’s stages of economic growth theory.

8. Why have poor nations invested so much money in education and health? Evaluate the soundness of these reasons.

9. Explain some of the reasons why developing countries have not realized a greater positive development impact from their higher education programs.

10. Is child labor a problem in developing countries? Explain.

11. How can an increase in human capital lead to an increase in GDP? Why might it not lead to an increase in GDP?