The Growth and Development of Nations in the Global Economy
Professor Brad Barham and John
Morrow
TA: Dylan Fitz (TA Sessions)
Despite these achievements, over 1.2 billion people live on less than $1/day (a figure that has continued to modestly increase over the last decade), and income inequality is on the increase almost everywhere in the world. Controversy about free trade, the new global economy, and for whom these things work has perhaps never been higher.Most people today are better fed, clothed and housed than their predecessors two centuries ago. They are healthier, live longer, and are better educated. Women’s lives are less centered on reproduction and political democracy has gained a foothold … [t]he last 200 years has shown the greatest advance in the conditions of the world’s population ever achieved in such a brief span of time.
“The Worldwide Standard of Living since 1800,” Journal of Economic Perspectives 14(1).
Understanding these controversies requires delving into key questions about the forces, strategies, and policies that shape the growth and development of nations in the global economy. After a brief survey of the global economic landscape and the patterns of growth and living standards found within it, this course first explores the basic economics of international trade. Taking technology and nations’ endowments of skills, capital and people as given, the standard comparative advantage argument of economics suggests that trade between poor and rich countries can be mutually beneficial. We explore the logic of comparative advantage and several critiques on how it shapes growth and development. We also consider how continuing barriers to trade, such as rich country cotton subsidies, come at the expense of some of the poorest countries in the world.
The second part of the course examines the forces that shape the endowments of people, skill, capital and technology that basic trade theory takes as given. Drawing on economic growth theory, this part of the course will study these forces and explore the degree to which living standards are converging between nations in our world and how these forces shape those outcomes. In the third part of the course, we introduce technology, inequality, and institutions into our exploration of growth and development, and revisit the nature and desirability of free trade once we take into account t these other factors. We also explore the interplay of technology, inequality, and institutions in the process of economic growth and development.
