115_problem_sets_1998-2004 - ECONOMICS 115: THE WORLD...

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1 ECONOMICS 115: THE WORLD ECONOMY IN THE 20 TH CENTURY PAST PROBLEM SETS Economics 115 Professor Barry Eichengreen The World Economy in the 20 th Century Department of Economics September 15, 1998 University of California, Berkeley First Problem Set 1. Identify each of the following concepts in a few words and explain its relevance to the modern world economy. (10 points each) A. Path dependence B. Aggregate production function C. Schumpeterian growth D. Infant industry protection E. Price specie-flow mechanism 2. Answer each of the following two essay questions in 250 words or less. (25 points each) A. Economists argue that there is a powerful tendency for rates of economic growth and levels of income per capita to converge across countries. Some have gone further and estimated that there is a strong tendency for convergence to proceed at 2 per cent a year. Why do economic historians doubt this &iron law of convergence?± B. The final decades of the 19 th century and the final decades of the 20 th are regularly referred to as &the two eras of globalization.± The parallels between the two periods are extensive, to be sure, but there are also important differences between these two eras in the extent, nature, and effects of international economic transactions. Describe and account for these differences.
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Economics 115 Professor Barry Eichengreen The World Economy in the 20 th Century Department of Economics October 1998 University of California, Berkeley Second Problem Set 1. Identify each of the following concepts in a few words and explain its relevance to the modern world economy. (10 points each) A. National Industrial Recovery Act B. Co-Determination C. Deliberative Councils D. MITI (Ministry of Trade and Industry) E. Export promotion 2. Answer each of the following two essay questions in 250 words or less. (25 points each) A. The Bretton Woods System of pegged but adjustable exchange rates had much in common with the gold standard of the interwar years. Under both systems, governments pegged the exchange rate. Under both systems, they held international reserves in the form of convertible foreign exchange (dollar deposits in New York, for example). But while the interwar gold standard was unstable, deflationary and & ultimately & disastrous, the Bretton Woods System functioned remarkably well. What accounts for the very different performance of the two systems? B. Scholars of Asian economic development dispute the role of industrial policy (also known as ±industrial targeting²) a factor in the rapid economic growth of he Japanese and East Asian economies after World War II. Describe the alternative points of view. Which interpretation is most strongly supported by the evidence?
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115_problem_sets_1998-2004 - ECONOMICS 115: THE WORLD...

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