ECON 3125: Development Economics

This course is a general introduction to the field of development economics. The focus is on ways in which a developing country can increase its productive capacity, both agricultural and industrial, in order to achieve sustained economic growth. The course proceeds by first examining how economic growth and economic development are measured and how the various nations of the world compare according to well-known social and economic indicators. Theories of economic growth and theories of economic development are then examined, as are the various social and cultural structures that are thought to influence economic progress. The inputs to economic growth and development (land, labor, capital, entrepreneurial ability, education, technical change), and the possible distributions of income and levels of employment that result from their use, is considered next. Domestic economic problems and policies such as development planning, the choice of sectorial policies, the choice of monetary and fiscal policies, rapid population growth, and urbanization and urban economic development are then examined. The course concludes with a consideration of international problems and policies such as import substitution and export promotion, foreign debt, foreign investment, and the role of international firms. In conjunction with a traditional presentation of the above topics, the course curriculum will include the use of computer simulation models and games. These materials have been formulated with a simulation technique, system dynamics, that has its origins in control engineering and the theory of servomechanisms. As a result, students will find them complementary to their work in engineering and science. In addition, the various development theories and simulation and gaming results will be related, where possible, to specific developing nations where WPI has on-going project activities (e.g., Costa Rica and Thailand). This course is recommended for those students wishing to do an IQP or MQP in a developing nation. This course will be offered in 2021-22, and in alternating years thereafter.