COURSE MATERIALS FOR ECON 83: ASIAN ECONOMIES, SPRING 2002


OVERVIEW OF COURSE

REQUIRED TEXTS

REFERENCE MATERIAL ON ECONOMIC DEVELOPMENT

COURSE ORGANIZATION

ASSIGNMENTS

DETERMINATION OF COURSE GRADE

INSTRUCTOR'S POLICIES

FIRST PAPER ASSIGNMENT

SECOND PAPER ASSIGNMENT

MIDTERM EXAM

FINAL EXAM

OVERVIEW OF COURSE

It is impossible to survey the Asian economies in both breadth and depth in a single semester's course -- difficult choices simply have to be made. Here they have been made on the basis of the course's primary objective, which is to provide a solid understanding of the factors that have made the Asian region the most dynamic in the world economy. The story is best told by focusing in major part on seven East Asian economies that may together be considered to demonstrate the varied mixes of ingredients that can lead to rapid, successful economic development. These economies are also central to the story of the not so distant Asian crisis, the aftermath of which is examined in some depth in the course, both for its inherent interest and for the cautionary lessons that may be drawn from it. The choice of these countries also reflects what is readily available in the existing literature in terms of coherently structured teaching material suitable for students having only an Introductory Economics background.

The focal countries are Hong Kong (a unitary economy if not a country), Indonesia, Korea, Malaysia, Singapore, Taiwan, and Thailand. The emphasis is on understanding the logic underpinning their strategies of economic development; the issues dealt with are the "big picture" issues relating to development strategy. None of these countries will be dealt with in any real depth; rather, the concern is with the "stylized details" of their development, both in terms of policy and performance. Two other countries - China and India --loom so large that they shouldn't be neglected, notwithstanding that each is respectively sui generis, and this not simply because of its complexity born of the diversity that attends on massive size. Major policy issues confronting each - as a consequence of the decision to follow in the footsteps of the East Asian seven -- will be examined, with some attention being given to the arguably mistaken strategic choices made in the past that have led to the highly problematic nature of resolving these issues. Japan needs also to be reckoned with. Here the reckoning is not with regard to its past economic triumphs but rather in terms of its current, seemingly deep-seated, economic malaise which in various ways affects the entire region. Dealt with hardly at all are the many Asian economies which have experienced disappointing economic performance over the entire past half century. The causes of their problematic development should be apparent in general terms once the lessons of success are understood.

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REQUIRED TEXTS

K&W - N.D. Kristof & S. WuDunn, Thunder from the east: portrait of a rising Asia, 2000; 352 pages.

EAM - World Bank, The East Asian Miracle: economic growth and public policy, 1993; 389 pages.

LEW - L.E. Westphal, Technology strategies for economic development ...; 2001:

"Technology strategy" @ http://www.swarthmore.edu/SocSci/lwestph1/download_files.html.

REA - J.E. Stiglitz & S. Yusuf, eds., Rethinking the East Asian miracle, 2001, 526 pages (not all to be read).

China - N.R. Lardy, Integrating China into the global economys, 2002, 176 pages.

Japan - E.J. Lincoln, Arthritic Japan: the slow pace of economic reform, 2001, 222 pages.

India - V. Joshi & I.M.D. Little, India's economic reforms, 1991-2001, 1996, 265 pages.

Note: The total cost to purchase all of the texts will undoubtedly equal or surpass about $200. Pairs or triples of students might therefore want to coordinate their text purchases to share at least one text in common.

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REFERENCE MATERIALS ON ECONOMIC DEVELOPMENT

Asian economies variously have recently been or are today developing economies. Students who have not previously studied economic development may accordingly want from time to time to consult a development textbook. Recommended are Perkins / Gillis, et al., Economics of Development, 5th ed., 2001, or Todaro, Economic Development, 7th ed., 1997. The editions indicated are the most recent editions; earlier editions will suffice. Materials shelved on the Econ. 181 Honors seminar in Economic Development shelf may also be of relevance.

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COURSE ORGANIZATION

Except for the first and last weeks, Tuesdays will be devoted to class discussion of the readings and Thursdays to lectures which will cover material not present (either at all or in sufficient detail) in the readings. The first week will be devoted entirely to lecture; the last week, to class discussion. As may be inferred from the determination of one's course grade, students are expected to be well prepared, having done the prior week's reading, for the Tuesday discussion sessions. Students are wholeheartedly encouraged to use these sessions to seek clarification of anything in the previous week's reading.

Two short papers will be assigned, with the specifics of the assignments reflecting student interests and concerns. There will also be a one hour mid-term and a two hour final.

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ASSIGNMENTS

Weeks 1 & 2:

Read all of K&W.
Discussion of chapters will be in order by pairs -- 1-6, 7-14, spaced over two weeks.

Weeks 3 through 5:

Read all of EAM, omit appendices except 3.1; ~293 pages; also read all of LEW paper.
Discussion of EAM chapters will be in order by pairs -- 1 &2; 3 &4; 5 & 6 -- spaced over three weeks; LEW paper will be discussed last.

Week 6:

Week 6: read REA, ch.s by Yusuf, Ito, & Stiglitz; ~ 110 pages.
Discussion of all together.

Week 7:

Prepare for midterm.
Midterm exam.

Spring Break:

"ENJOY!"

Week 8:

Read REA, ch.s by Perkins, Okazaki, Woo-Cumings, Jomo; ~ 152 pages
Discussion of all together.

Weeks 9 & 10:

Read all of China book.
Discussion of chapters will be in the order - 1&2, 3-5 - spaced over two weeks.
First paper due Week 9, Thursday.

Weeks 11 & 12:

Read all of Japan book; you may also want to start reading India book.
Discussion of chapters will be in the order - 1-4, 5-7 - spaced over two weeks
.

Weeks 13 & 14:

Read all of India book.
Discussion of chapters will be in the order - 1-3, 4-7 - during Week 14.
Second paper due Week 14, Thursday.

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DETERMINATION OF COURSE GRADE

Short paper assignments, each counts 15 %
Mid-term Exam 20 %
Final Exam 30 %
Class Participation 20 %

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INSTRUCTOR'S POLICIES

Examinations: Students must take exams at the duly appointed times; a make-up exam will be given only in the case of a certified (by a Dean or Worth Health Center) emergency or medical excuse for having missed an exam.

Late assignments: Assignments are due at the beginning of class or at the time stated, as the case may be. Assignments turned in after the deadline will be marked down one "notch" (e.g., from A- to B+) per hour that they are late; an exception will be made only in the case of a certified (by a Dean or Worth Health Center) emergency or medical excuse.

On cheating and plagiarism: See the Student Handbook's statement regarding Academic Honesty. Cases of suspected plagiarism and cheating on exams will be reported to the Dean's Office for judicial action. In addition, the instructor has the automatic policy that any student whom he considers, on the basis of evidence available to him, to have engaged in plagiarism or cheating in any individually assigned work (i.e., in this course, exams and written reports) will automatically receive No Credit for the course.

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FIRST PAPER ASSIGNMENT

The objective in researching and writing this paper is to give students an understanding of macro economic events (the principal ones) and overall trends over the past fifteen years in China and Japan - this in accord with student preferences regarding topics and countries to be covered. Three topics will be covered in each country: financial sector; fiscal policy, balance of payments. Students will work in six pairs (by country, topic) to locate source materials and, as they find to be in consonance with individual preferences, to review these materials. Students working on each country will collaborate in providing oral macro overviews to the others in the class; notional time limits are 5 minutes per topic / pair and 15 minutes per country. Each student is additionally and individually responsible for writing a paper summarizing her/his findings re macro events and trends, with the emphasis being to explain the sources of current macroeconomic problems in "their" country. In respect both to oral presentation and short paper, students are strongly encouraged to find some sensible division of their topic area into two issue focused sub-topical areas.

Examples of possible divisions of labor, responsibility within student pairs:
Financial sector - status of financial institutions (e.g., bad debts) -VS- monetary policy (inflation, etc).
Fiscal policy - expenditures -VS- revenues. E.g., in China, both emphasizing federal structure problems.
Balance of payments - exchange rate -VS- capital flows. China, alternatively, either -VS- WTO accession.

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SECOND PAPER ASSIGNMENT

The assignment is first to read a book, a "classic," that offers an important perspective on some aspect of Asian economic performance. Some candidate books are listed below. Students wishing use this assignment to investigate the performance (over the past ~40 years) of some Asian economy may either read a classic that surveys its development experience or, where there is no classic, substitute a selection of readings more or less sufficient taken together to provide such a survey. Books / selections of readings must be approved by the instructor in advance of starting work on the assignment.

The assignment is then to participate in team oral reports to the class on commonalities, differences in perspectives between / among the individual readings; teams will be chosen on the basis of student choices of reading material. The final component of the assignment is to write a review of the book / selection of readings that summarizes principal arguments & findings, evidence, themes, and so on, depending on the nature of the book. To be included in the review is a brief discussion of how at least one published review evaluated the book, with some commentary on that review.

Book possibilities (one student per book; others may be chosen, subject to instructor's approval):
Amsden, A.H., Asia's next giant: South Korea and late industrialization, 1989.
Bhagwati, J.N., and P. Desai, India: planning for industrialization; ... policies ..., 1970.
Clifford, Troubled tiger: businessmen, bureaucrats, and generals in South Korea, revised ed., 1998.
Dicken, Global shift: transforming the world economy, 3rd ed., 1998.
Hayami, Y. and V.W. Ruttan, Agricultural development: an international perspective, 1985 ed.
Hobday, M., Innovation in East Asia: the challenge to Japan, 1995.
Kim, L.S., Imitation to innovation: ... Korea..., 1997.
Kim, L., & R.R. Nelson, eds., Technology, learning, and innovation: ... industrializing economies, 2000.
Lall, S., Learning to industrialize: ... India, 1987.
Landes, D.S., The wealth and poverty of nations: why some are so rich and some so poor, 1998.
Mathews, J.A. and D-S Cho, Tiger technology: The creation of a semiconductor industry in East Asia, 2000.
Wade, R. (1990) Governing the market: ... role of government in East Asian industrialization, 1990.

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MIDTERM EXAM, March 7, 2002

Part I -- Short-answer questions.

PLEASE group answers to each multi-part question together; clearly identify the question by number; and indicate the item being addressed at the start of each answer.

1. (7 points per answer; spend ~4+ minutes on each; totals: 21 points; 12.5 minutes)
Answer, briefly!, for any three of the four elements below: How did the HPAEs' performance / achievements (from the 1960s up to the Asian crisis) differ in general terms from that / those of developing economies elsewhere in the world? What factors appear to explain the difference? How did the difference(s) contribute, either directly or indirectly, to the HPAEs' superior overall development performance?

Growth of GNP
Population growth
Agricultural development
Poverty and income inequality

2. (7 points per answer; spend ~4+ minutes on each; totals: 21 points; 12.5 minutes)
For any three of the six terms / concepts below, briefly! give a definition / explanation and indicate its significance in the context of East Asian development.

Cultural factors Neoclassical versus revisionist
Financial repression Policy fundamentals
Initial conditions Price distortions

3. (18 points, spend ~11 minutes) Does the notion of export-led development (or development via export push) capture a fundamentally important aspect of East Asian performance; if so, does it apply equally well to the first- and the second- tier economies (or early achievers and late comers)?

Part II -- Essay, longer-answer question.

(40 points; spend ~ 24 minutes) What are the principal themes of Kristof's and WuDunn's Thunder from the East? What arguments do they advance in support of these themes; what evidence do they cite in support of them? Where, if at all, might it be thought that they are misguided or wrong (based on what else you've learned in the course to date)?

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FINAL EXAM, May 10, 2002

You have two and a half hours (or, 150 minutes) to take the exam. Answer questions as indicated below. If you chose to bring into the exam a 5x8 card with your notes, be sure to turn in the card when you turn in your blue books. In answering the questions, please take care to note the point values (out of 200 points in total) and notional time allotments for each part.

Part I - 60 points; 45 minutes.

Determine (or, identify / select) the six distinct, specific, and unitary terms, concepts, and / or "things" - respective examples might be selective intervention, corporate governance, land reform; collectively you might think of them as aptly descriptive "buzz phrases" - that you think best encapsulate the most significant aspects of East Asian economic policy and performance over the past forty plus years. For each of the six in turn (i.e. separately), briefly: define it; explain its significance in East Asian experience; justify its inclusion as one of the six most important "buzz phrases."

Part II - 40 points, 30 minutes.

What are considered to have been among the causes of the East Asian Economic / Financial Crisis of the late 1990s? What do you consider to have been the single most important cause; why?

Part III - 100 points, 75 minutes.

Consider the agenda of economic reforms remaining to be undertaken by the Indian government that is discussed in Joshi's and Little's book. To what extent are these also the reforms that remain to be accomplished by the governments of China, Korea, and Japan (pay separate attention to each of these three countries, and be sure to explain as necessary, useful)? Taking into account as well the other countries in East Asia covered in the course, which features of an advanced, "truly developed" economy (such as those of the non-Asian OECD countries) appear to be the most difficult for the Asian Economies to accomplish, or bring into being; why are they the most difficult?

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Page updated: 7/26/02