Economic Growth and Crisis

3 Credits · Level: Graduate, Undergraduate

This course explores the stages of economic growth and development and the challenges faced by countries in this process. While economic growth is usually accompanied by all kinds of challenges-political, economic and social, we will focus on the economic side and in particular, on episodes of financial crisis. We will look at some evidence such as -balance of payments, stock market and exchange rate data to understand the warning signs and determinants of a crisis. Thereafter, we will discuss some key features of crisis and what role did policy play in mitigating these effects. This course will be divided into three parts- the first part will focus on contemporary advanced economies – in Europe, North America and East Asia, and look at the stylized facts of the stages of economic growth in these countries. In particular, we will look at the empirical facts to understand how productivity, GDP and GDP per capita and other variables changed as these countries started growing rapidly. This will be followed by a discussion on some of the problems seen in these countries. Finally, we will discuss episodes of financial and economic crisis in these nations. The second part of the course will cover the emerging markets economies and we will examine the rapid economic development in some popular big economies such as China, India, Brazil and Mexico. We will focus on the current economic challenges confronting these countries, such as, political economy, human capital, inequality, and then turn towards discussing incidents of economic and financial crisis over their growth period. The last part of the course will focus on “frontier markets” which is a term coined for countries that are not as well established as the emerging market economies but show great potential for economic growth. Here, we will look at the evidence to see what potential hurdles these countries will have to overcome to rise in the development ladder.