The Global Economy: Development Economics – Digital resource book
The global economy: Economic development UNIT 1: Economic development and sustainable economics Foreword by Brad Cartwright .................................................................................................................1 Key terms and concepts: Economic Development ........................................................................2 Lesson 1: Introduction and Sources to Economic Growth .......................................................................3-4 Lesson 2: Real World Issue – Why is Economic Development Uneven? ...............................................5-8 Lesson 3: Does Economic Growth lead to Economic Development? ..................................................9-10 Lesson 4: Common Characteristics of Developing Nations ................................................................11-12 Lesson 5: Diversity Among Developing Nations..................................................................................13-14 Lesson 6: International Developing Goals............................................................................................15-16 Review Questions: Economic Development ......................................................................................17
The global economy: Economic development
UNIT 2: Measuring economic development Key terms and concepts: Measuring Economic Development ...................................................18 Lesson 1: Introduction to Measuring Economic Development ...........................................................19-21 Lesson 2: The Poverty Cycle .................................................................................................................22-26 Lesson 3: Single Indicators of Economic Development ......................................................................27-30 Lesson 4: Composite Indicators of Economic Development ..............................................................31-33 Review Questions: Measuring Development .....................................................................................34
The global economy: Economic development
UNIT 3: Domestic factors and economic development Key terms and concepts: Domestic Factors and Economic Development ........................35 Lesson 1: Domestic Factors and Economic Development ...........................................................36-38 Review Questions: Domestic Factors and Economic Development .........................................39
The Global Economy: economic development UNIT 4: International trade and Economic Development Key Terms and Concepts: International Trade and Economic Development .............................40 Lesson 1: Introduction to International Trade and Economic Development ......................................41-42 Lesson 2: Barriers to Economic Development ....................................................................................43-45 Lesson 3: Overview of Trade Strategies for Economic Development ................................................46-47 Lesson 4: Import Substitution ..............................................................................................................48-51 Lesson 5: Export Promotion ................................................................................................................52-56 Lesson 6: Trade Liberalization ..............................................................................................................57-60 Lesson 7: Bilateral and Preferential Trade Agreements (PTA's) ..........................................................61-62 Lesson 8: Diversification ......................................................................................................................63-64 Lesson 9: Development Strategies (Free and Fair Trade) ...................................................................65-66 Review Questions: International Trade and Economic Development ..............................................67
The Global Economy: economic development UNIT 5: Foreign direct investment and economic development Key Terms and Concepts: Foreign Direct Investment and Economic Development ..................68 Lesson 1: Introduction to Foreign Direct Investment and Economic Development ..........................69-72 Lesson 2: Advantages to Foreign Direct Investment (FDI) .................................................................73-74 Lesson 3: Disadvantages to Foreign Direct Investment (FDI)..............................................................75-76 Review Questions: Foreign Direct Investment and Development Economics..................................77
The Global Economy: economic Development
UNIT 6: Aid, debt, and economic development Key Terms and Concepts: Aid, Debt, and Economic Development .............................................78 Lesson 1: Introduction to Aid, Debt, and Economic Development .....................................................79-80 Lesson 2: Types of Aid ..........................................................................................................................81-87 Lesson 3: Concerns about Aid .............................................................................................................88-89 Lesson 4: Non- Government Organizations (NGO's) ..........................................................................90-92 Lesson 5: The International Monetary Fund (IMF) .............................................................................93-94 Lesson 6: Structural Adjustment Policies (SAP's) ................................................................................95-98 Review Questions: Aid, Debt, and Development Economics.............................................................99
The Global Economy: economic Development UNIT 7: The balance between free markets and government intervention Key Terms and Concepts: Balance between Free Markets and Government Intervention ........................100 Lesson 1: Introduction to Balance between Free Markets and Government Intervention ..............................101-104 Lesson 2: Free-Market Led Strategies ................................................................................................................105-109 Lesson 3: Interventionist Strategies ...................................................................................................................110-112 Lesson 4: Conclusion: The Balance between Free Markets and Government Intervention ...........................113-114 Review Questions: The Balance between Free Markets and Government Intervention .................................115 Sources .......................................................................................................................................................................116
Foreword – by Brad Cartwright -Hey! Thank you so much for purchasing these teaching resources! In here, you will find Vocabulary Lists, Review Questions, IB Exam Practice Questions, and lesson specific Slides for the entirety of The Global Economy – Development Economics. The idea is to provide you with the critical pieces of your teaching resources so that you can teach with confidence and calm. With your purchase comes the right to use these resources with your students, whether that by using the Slides to guide class discussions, by sharing the Vocabulary Lists with your students in preparation for a quiz, or by embedding the IB Exam Practice Questions into your assessments. I’ve come to discover that these resources have been exceptionally useful with my own students here in Santiago, Chile. These resources follow the videos available in both the student and teacher monthly subscriptions. Good luck and take care of yourselves out there! 1
- SAMPLE LESSON -
Aid, Debt, and Economic Development Fundamental Vocabulary and Concepts
Aid Foreign Aid Official Development Assistance (ODA) Non-Governmental Organization (NGO) Humanitarian Aid Food Aid Medical Aid Emergency Aid OECD De e e A a ce Committee (DAC) Official Aid
Development Aid Long Term Loans Tied Aid Project Aid Technical Assistance Aid Commodity Aid Bilateral Aid Multilateral Aide A de Wea e Indebtedness International Monetary Fund (IMF) Structural Adjustment Policies (SAPs) Third World Debt Crisis S e d gP b e L e Heavily Indebted Poor Countries (HIPC) Initiative
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- SAMPLE LESSON -
trade strategies for economic growth and economic development understanding their impact
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trade strategies for economic growth and economic development • import substitution industrialization (ISI) • export promotion (export-led growth or outward oriented growth strategy) • trade liberalization • bilateral and regional preferential trade agreements • diversification (in exports) source: jocelyn blink
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import substitution trade strategies for economic growth and economic development 48
import substitution industrialization (ISI) • key idea: “produce it rather than import it!” • inward-oriented strategy • strategy: – that a developing country should, whenever possible, produce goods domestically, rather than import them
• it is the opposite of export-led growth • in order for it to work, there need to be some necessary conditions: – the government needs to adopt a policy of organizing the selection of goods to produce domestically – subsidies are made available to encourage domestic industries – government needs to implement a protectionist system with tariff barriers to keep out foreign goods
source: jocelyn blink
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advantages: import substitution • protects jobs in domestic market • protects local culture and social habits • protects the economy from the power, and possibly bad influence of MNCs
source: jocelyn blink
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disadvantages: import substitution • may only protect jobs in the short-run • means that the country does not enjoy the benefits to be gained by comparative advantage and specialization • may lead to inefficiency in domestic firms • it may lead to high rates of inflation due to domestic aggregate supply constraints • it may cause retaliatory measures source: jocelyn blink
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export promotion trade strategies for economic growth and economic development 52
export promotion • key idea: “increase trade for growth!” • outward-oriented growth strategy • economic growth is achieved by concentrating on increasing exports and export revenue as a leading factor in the aggregate demand of a country • increase exports should = increased GDP which should = higher incomes which should = growth • country concentrates on producing and exporting products in which it has a comparative advantage source: jocelyn blink
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export promotion • in order to achieve this, it is assumed that a country will need to adopt certain policies – – – – –
liberalized trade liberalized capital flows a floating exchange rate investment in the provision of infrastructure to enable trade to take place deregulation and minimal government intervention
this list illustrates a “package” of policies associated with export led growth source: jocelyn blink
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differences between primary and manufactured products as engine for growth • difficult through the export promotion of primary goods • focus of export-led growth is usually on increasing manufactured exports – Japan, South Korea, Singapore, Taiwan
• focus on their comparative advantage
source: jocelyn blink
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possible problems: export promotion • leads to increased protectionism in developed nations against manufactured products from developing nations • certain assumptions were made about the necessary conditions for manufactured led export growth • increased arrival of MNCs • may increase inequality
source: jocelyn blink
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- SAMPLE LESSON Aid, Debt and Development Review Questions: What you should be able to do!
Explain that aid is extended to economically less developed countries either by governments of donor countries, in which case it is called official development assistance (ODA), or by non- governmental organizations (NGOs). Explain that humanitarian aid consists of food aid, medical aid and emergency relief aid. Explain that development aid consists of grants, concessional long-term loans, project aid that includes support for schools and hospitals. Explain that, for the most part, the priority of NGOs is to provide aid on a small scale to achieve development objectives. Explain that aid might also come in the form of tied aid. Discuss motivations of economically more developed countries giving aid. Evaluate the effectiveness of foreign aid in contributing to economic development. Examine the current roles of the IMF and the World Bank in promoting economic development. Foreign Debt and its Consequences Explain why countries borrow from foreign creditors. Explain that in some cases countries have become heavily indebted, requiring rescheduling of the debt payments and/or conditional assistance from international organizations. Explain that the burden of debt has led to pressure to cancel the debt of heavily indebted countries. Adopted from the IB Economics Subject Guide
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Sources I am grateful for the work of my fellow IB Economics teachers Jocelyn Blink, Ian Dorton, Ellie Tragekes, and Jason Welker. Though they may not know it, each of them have accompanied me through my teaching of IB Economics over the years. Thank you!
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