GROWTH, INEQUALITY and POVERTY

This course will address matters related to long-term economic growth, as well as related issues in inequality (the distribution of income and wealth) and poverty that ultimately contribute to sustainable development. One of the major problems associated with development are the low-incomes of today’s developing countries. For most poor countries growth constitutes the principal avenue via which poverty can be reduced, as growth provides greater opportunities and enlarges the economic pie. Another, related, issue concerns distributive justice, both at the national level and between nation states. Excessive inequality can undermine societal cohesion and human security. Today’s rich countries are affluent because they historically grew faster than the poor nations of the world. The study of the causes of rapid growth is, therefore, important. Is growth driven merely by physical capital accumulation through savings? Or are ideas and human capital accumulation equally important? Does greater income or wealth inequality hinder or foster growth? Is the lack of rapid growth a consequence of the failure of policies being coordinated between different branches of the economy? Ultimately, are there are other factors that determine long-term growth besides policies: geography, endowments, institutional quality (governance and democracy), cultural (religious) character and internal conflict? What is the difference between growth trickling down to the indigent and destitute, and genuinely pro-poor growth. We are constantly being told that increased international trade and openness is key to economic success. But, does trade benefit all countries equally? Is trade between the North and the South less advantageous for the South? Also, trade is meant to be an engine of growth, but has growing trade in our globalized era brought average incomes in the world closer together or further apart? In addition to the theory and empirical evidence connected with the issues enumerated above, students will become familiar with the analytical tools required to apply these and other issues towards more detailed case studies, and comparative analyses.