Which of the following would be an appropriate alternative to this
Development Economics IIa
as a name for this course?
Industrialisation and development: Strategies and experience
Development economics: The Neoclassical Approach
Open Economy development economics
Developing countries in the international economy
Development, Accumulation and Structural Change
Who wrote the textbook for the course and what kind of economist is he
Weaver - Kaleckian
Thirdwood - Keynesian
Thirllwarld - Supply-sider
Thirlwall - Kaldorian
Furball - Neoclassical
Using the figures from our lecture (lecture 1), roughly speaking, what is the average percent of the workforce in the low income countries working in each of the following sectors?
Agric. - Indus. - Services
5 - 15 - 80
33 - 33 - 34
80 - 15 - 5
75 - 10 - 15
61 - 19 - 21
At what level of employment does the diminishing marginal product of labour start?
Which of the following has NOT been argued in the lectures
Agriculture is characterised by diminishing returns to labour
The income elasticity of demand for agricultural output is relatively low
As income rises (and productivity rises) the relative importance of agriculture in purchases will increase
Industry is an increasing returns activity
The income elasticity of demand for industry’s output is relatively high
Using our standard growth formula assume we have a population growth of 2% per year and our incremental capital output ratio is 5. What level of savings would be required to give us a constant GDP per capita if the annual GDP was £150 billion. (Assuming all the savings are invested)
There is insufficient information
Lack of access to basic sanitation and primary health care low income countries contributes to high infant mortality.
On average and approximately, how many deaths are there per 1000 live births?
How might this “Kuznets curve” be best labelled?
A=High Growth B=Low Growth C=Low Industrialisation D=High Industrialisation
A=Low Gini B=High Gini C= High Level of Development D=Low Level of Development
A=High Gini B=Low Gini C= Low Level of Development D=High Level of Development
A=High Growth B=Low Growth C= Low Level of Development D=High Level of Development
None of the above
Who defines undernourishment as: “a state in which physical functioning of a person is impaired to the point where she cannot maintain an adequate level of performance at physical work, or at resisting or recovering from the effects of any of a garden variety of diseases”?
Kuznets, S (1955) Economic Growth and Income Inequality
Malthus, T (1798) Essay on the Principle of Population
Dasgupta, Partha (1993) An Inquiry into Well-being and Destitution
Galbraith, J.K. (1962) Economic Development in Perspective
Sen, A (1984) Poverty and Famines: An Essay in Entitlement and Deprivation
What it is the missing word in the following famous quote?
“The country that is more developed _________ only shows, to the less developed, the image of its own future.”
Which of these did NOT explicitly advance a “stage” theory of development?
Which of the following is not one of Rostow’s stages?
Which of Rostow’s stages might be best described as involving a shift to “self sustaining growth”, the emergence of “leading sectors”, an expansion of the market for output, an increase in the supply of capital, a channelling of agriculture’s surplus (via the state or private sector) to industry, the growth of self-finance by businesses, the spread of new production techniques (production functions) and the beginning of a secondary expansion?
Which of the following was not one of Kaldor’s growth laws (as described in the lecture)?
NOTE: m - manufacturing; nm - non-manufacturing; p - productivity; g - growth
gGDP = f(gm) f’ >0
pm = f(gm) f’ >0
gm = f (ggdp) f’ >0
pnm= f(gm) f’ >0
Which of the following best describes Allyn Young’s (1928) “increasing returns” ?
a microeconomic phenomenon involving the returns gained at the enterprise level by an expansion in output
a sectoral level phenomenon involving the returns gained where by, for example agricultural, productivity will increase as a result of a reduction in the sector’s size
a macroeconomic phenomenon involving the interaction between activities in the process of general economic expansion
An echo of Smith’s worries about the dangers of over specialisation of labour
A myth. Young believed in constant returns
Which of the following most closely corresponds to Fisher (1939) and Clark (1940) stages?
Traditional – Transitional - Take-off –Maturity – Age of High mass consumption
Hunting and gathering – Shepherding – Agriculture - Commercial Society
The sequential dominance of primary production, then secondary production followed by tertiary production
Primitive Communism – Slavery – Feudalism – Capitalism – Socialism –Communism
The sequential dominance of the Nobility, then Entrepreneurs, then Technocrats
Which author or authors’ “stage theory” has the income elasticity of demand and changes in income elasticity of demand as the major driver of shifts between stages?
Fisher and Clark
This is the result of a regression estimating “Verdoorn’s Law” in China
pm = -9.46E-05 + 0.71(gm)
(-0.02) (19.10) R^2=0.73
How might we best interpret this result?
Productivity increases are causing growth in manufacturing
The R^2 of 0.73 and the coefficient on manufacturing sector growth 0.71 are sufficiently similar to counterbalance the negative coefficient on the intercept
A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in that sector’s productivity. But the low R2 and the negative t stat on intercept coefficient render the result meaningless
A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in the growth of that sector’s productivity
Productivity and growth are not related to each other as the t-statistic on the growth coefficient (19.10) is too low
Which of the following is a “correct” reference for a book by Alice Amsden?
Amsden, Alice (1929) Asia’s Next Giant: South Korea and Early Industrialisation
Amsden, Alice (1959) Asia’s Giants: South Korean and Japanese Industrialisation
Amsden, Alice (1979) Asia’s Last Giant: Japan and Late Industrialisation
Amsden, Alice (1989) Asia’s Next Giant: South Korea and Late Industrialisation
Amsden, Alice (1999) Asia’s Next Giant: North Korea and Early Industrialisation
Suppose a country’s population is growing at 3% per year and the ICOR is 4. Using the “standard” formula what savings rate would be needed to ensure a constant level of GDP/capita?
Which of the following is least likely to be assumed by traditional development economists?
As income and productivity rise the relative importance of agriculture in purchases will increase
Which of these is NOT a Classical Economist and/or did NOT write the Book on the date implied
Karl Marx (1867) Capital: A Critique of Political Economy
David Ricardo (1817) Principles of Political Economy and Taxation
Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations
Thomas Malthus (1798) Essay on the Principle of Population
W. W. Rostow (1805) The Stages of Economic Growth
In the lecture (L4) it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?
The encouragement of invention of “machines which facilitate and abridge labour, and enable one man to do the work of many”
The Pin Factory example
Learning by doing increasing the “dexterity of every particular workman”
The saving of time “passing from one species of work to another”
Smith’s arguments with Malthus about the role of trade
Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?
Which of the following is NOT true about Ricardo?
He was an industrialist, politician and economist
He argued that UK should specialise in agricultural produce, including corn and beef, because of its absolute advantage in producing these
He campaigned for repeal the “Corn Laws” in England which had been protecting UK agriculture
He predicted that capitalist economies would end up in stationary state with no accumulation and therefore no growth
He argued that diminishing returns in agriculture would lead to higher food prices
variable capital = v
constant capital =c
profits = s
A Marxist economist would NOT normally use which of the following definitions
Degree of exploitation = s/v
Organic composition of capital = c/v
The rate of profit = (s/v)/(1+[c/v])
Growth = s/c
Thirlwall Ch5 Theories of Economic Growth argues:
"An attempt is made to illustrate the contemporary relevance of the theories discussed. … the wheel has turned full circle, and … the most recent theories of endogenous growth rehabilitate many of the ideas of the old classical economists particularly _________ __________ emphasis on increasing returns associated with investment in manufacturing industry, and the general emphasis in both classical and __________ theory on the role of capital accumulation, and the embodiment of various forms of technical progress associated with it.”
What are the missing words?
Thomas Malthus’s AND Ricardian
David Ricardo’s AND Neoclassical
Adam Smith’s AND Keynesian
Karl Marx’s AND Neo-Keynesian
Joseph Schumpeter’s AND evolutionary
Nicholas Kaldor (1805) The Stages of Economic Growth
In the lecture on the Classical Economists it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?
Smith’s discussions with Marx about the role of exploitation
Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?
Which of the following is not one of Harrod’s questions?
What must be the DY/Y for Ip to equal Sp (i.e. for a “dynamic equilibrium”?)
Will a dynamic equilibrium between Ip and Sp tend to prevail?
Is any dynamic equilibrium between Ip and Sp stable?
Will the growth rate be such that labour and capital will tend to be fully employed?
What is the optimal level of growth to ensure the maximisation of the sum individuals in the society’s welfare?
Assuming there is a problem with the warranted growth rate being less than the natural growth rate. Which of the following was NOT suggested as a possible solution?
reduce the population growth rate
raise the savings rate using fiscal policy
raise the savings rate using monetary policy
reduce the amount of capital needed per unit of output
encourage more of the population to work
Joan Robinson used which phrase to describe the situation where ga=gw=gn
The perfect equilibrium
The growth “norm”
A “golden age”
The desired optimum
A “happy medium”
Who in 1946 published an article in Econometrica outlining a model very similar in insights to Roy Harrod’s 1939 model?
This is a Cobb-Douglas Production function in “extensive” form
Y = bK^(a)*L^(1-a)
Which of the following is not true?
Y is output
b is some measure of technology
a = elasticity of output with respect to the capital stock
1-a = elasticity of output with respect to the labour force
a+ (1-a) = 1 =>increasing returns to scale
If you were writing an essay on the major features of "stages of growth" theories who would you be least likely to mention as one of the stage theorists?
In a standard Cobb-Douglas Production function (Y=TKaLb) which of the following is NOT true?
a+b=1 implies constant returns to scale
a+b<1 implies decreasing returns to scale
a+b>1 implies increasing returns to scale
0<a<1 and 0<b<1 reflects diminishing returns to the factors
a and b are often assigned the values 0.6 and 0.8 to reflect their respective shares in national income
Taking logs of a standard Cobb-Douglas Production function (Y=TKaLb) differentiating with respect to time and using a discrete approximation we get the following functional form:
rY=rT+a rK+b rL
When using this to model an economy which of the following would NOT be a good description of rT ?
The annual rate of growth of “total productivity”
That part of growth of output not attributable to increases in factors of production
A “coefficient of ignorance”
“Advances in knowledge”
An accurate measure of the economies degree of technical progress
Thirlwall discusses the possible contributions of the agricultural sector to the process of development under four headings. Which is not one of them?
Foreign exchange contribution
Who was the father of the 1960s Green Revolution and was awarded the Nobel Peace Prize in 1970 in recognition of his contributions to world peace through increasing food supply
W. A. Lewis
Complete the following quote from Lewis. “The central problem in the theory of economic development is to understand the process by which a community which was previously
saving and investing 4 or 5 per cent of its national income or less, converts itself into an economy where voluntary saving is running at about 12 to 15 per cent. of national income or more.”
corrupt, converts itself into a democracy.”
industrialised, converts itself into a post industrial society.”
saving 15-20 per cent of its national income, converts itself into an economy where voluntary saving is running at about 50 per cent. of national income or more.”
investing nothing, converts itself into an economy where voluntary saving is running at about 10 per cent. of national income.”
What is Lewis’s answer to the question "why do [poor countries] save so little”? Because
they are poor
their government are too corrupt
their taxes are too high
their capitalist sector is small
they lack a sufficiently developed financial sector
In Lewis’s model earnings in the subsistence sector set a floor to wages in the capitalist sector but in practice wages in the capitalist sector have to be higher than this. That is, there is a “gap”. Which is the figure closest to Lewis’s estimate of the typical size of this gap?
Which of these is not one of Lewis’s description or explanation of the gap?
The gap is nominal not real in that it merely reflects the higher cost of living in capitalist sector
Reflecting a psychological cost. The cost of moving from an easy going way of life in the subsistence sector to the more regimented and urbanised environment of the capitalist sector
Reflecting unskilled workers being of more use to the capitalist sector after they have been there for some time than is the raw recruit from the country
Because of the need for urban workers to send money home to the countryside
Reflecting a difference in conventional standards as a result of acquiring tastes and a social prestige which conventionally are recognised by higher real wages
According to Google Scholar how many times, approximately, has
Lewis, W.A. (1954) Economic development with unlimited supplies of labour. The Manchester School, 22(2), 139-191.