From the textbook or from lecture on the first day of class, what were the major themes of the first two periods of development thinking? What were the outcomes? Why is it difficult to determine whether these approaches were successes or failures?

Econ 213: Midterm study guide

1. From the textbook or from lecture on the first day of class, what were the major themes of the first two periods of development thinking? What were the outcomes? Why is it difficult to determine whether these approaches were successes or failures?
2. What period in development thinking was more focused on market-based approaches?
3. What were some reasons that central planning was attractive in the first period of development thinking? (skip this question)
4. What is import substitution industrialization, where was it most commonly adopted, what were the consequences of the approach?
5. What is a randomized controlled trial and what difficulties with impact assessment do RCTs address? E.g. what problem with impact assessment does the randomization solve? What problem with impact assessment does the control group solve?
6. What is a counterfactual?
7. If I went to a village and found that all of the mothers taking iron supplements have anemia while the mothers not taking iron supplements did not have anemia, would I be right in concluding that iron supplements are ineffective at addressing anemia?
8. What is selection bias?
9. Practice difference-in-difference problems. You do not need me to supply this formula on the exam, so you should memorize it. But really, it’s intuitive… figuring out the intuition is part of studying for the exam.
10. What is the parallel trends assumption?
11. What are internal and external validity? Why are these concepts important to economic development and impact assessment (in other words, why do I want you to know about these concepts)?
12. What is a natural experiment? Why are natural experiments sometimes preferable to RCTs?
13. What is net present value? How do you calculate net present value of a project over its lifetime?
14. What is a discount rate? What does the discount rate imply about a person’s preferences?
15. Define GDP and GNI. Which is preferable to measure economic growth, which is preferable for measuring development or welfare?
16. What explains the stark differences in GDP vs. GNI in some countries (as discussed in class/)?
17. That is the market exchange rate? What is a PPP exchange rate? When are PPP exchange rates very different from market exchange rates? Why do we use a PPP exchange rate anyway? What are some challenges in determining the PPP exchange rate?
18. If the price of a burger in the US is $2.50 and the price of a burger in the UK is £4, what is the $US to UK PPP exchange rate? Using this PPP exchange rate, convert the UK’s GDP of £68,022 to US dollars.
19. Which of the following are included in US’s 2016 GDP:
    1. An antique table (built in 1904) sold at auction in 2016
    2. A table built in 2016 Vermont and sold to a family for final use in 2016.
    3. A t-shirt produced in Vietnam and sold to an American consumer.
    4. Cleaning services provided to residential customers.
    5. Buttons produced in New Hampshire and sold to a pant manufacturer in Massachusetts.
20. What is real GDP? Nominal GDP?
21. What do our formal measures of income fail to pick up?
22. I can give you the general form of the Foster-Greer-Thornbecke Index, but you need to know how to convert it into the three indexes that we discussed and to calculate the indexes given a sample population.
23. How do income transfers at different income levels affect each of the FGT indexes?
24. What is the concern with being too heavily focused on moving people out of poverty?
25. What is the difference between constructive and destructive inequality? What is the theoretical relationship between each type of inequality and economic growth? What is the empirical evidence on inequality and national income?
26. What is the Kuznets curve? What did Kuznets conclude from this analysis? What was the error that Kuznets made in deriving the relationship shown in the curve?
27. You should know what a Lorenz Curve is and what a Gini coefficient is and how to derive each of them. You will not need to use integration to find the area below the Lorenz curve J.
28. What is a low vs. a high Gini coefficient?
29. What is the problem with looking at poverty and inequality at a household level rather than an individual level? If this is problematic, why do economists use household-level indicators rather than individual-level indicators of welfare?
30. HDI: You should know how to calculate this. You do not need to memorize the goalposts.
31. What are the three dimensions of the HDI?
32. When might HDI reveal something different about a population’s welfare than what is revealed by income? (e.g. why do some countries have good/bad performance as in table 6.3)
33. Why GNI not GDP?
34. Why logged GNI?
35. Why geometric mean of the indexes?
36. Do you think that the HDI is useful?
37. Should primary education be free from the perspective of an economist? College?
38. What are the components of the “education decision”?
39. In what ways does education have monetary returns? When does education lead to growth?
40. How can education affect fertility? Health?
41. What is the difference between gross and net enrollment?
42. Low income countries spend a disproportionate amount of their education budgets on primary, secondary or tertiary education?
43. What are the interventions that are aimed at improving school enrollment and attendance? How do each of these interventions enter into the education decision model?
44. Why don’t teachers go to work more? (See Kremer et al 2005 and Banerjee and Duflo 2006).
45. Interpret the following graphic with respect to the effect of cameras on teacher attendance: