Asian Economic Development and Integration

Instructors

KAWAI, Masahiro

Credits / Language / Semester

2Credits / English / Winter

Objectives/Overview

This course will provide an overview of the key factors influencing the rapid growth and development of Asian economies since the 1950s, with a focus on developments since the Asian financial crisis (1997/98). It will examine a range of policy challenges that the region has faced, and the response of various economies. The course will draw on diverse country, sub-regional, and intra-regional experience to identify policies that seem to have contributed most significantly to growth and development, examine why they “worked,” and how they might be applied in other developing economies. It will consider current policy debates on a host of “hot” topics including trade, monetary policy, regional economic integration, the environment, and financial market development and supervision. At the end of the course, students should understand the key drivers of Asian growth and development in the past 60 years and be familiar with a range of ongoing policy discussions likely to influence growth in the region moving forward.

Students are expected to attend all lectures, participate actively in class, write a paper on any of the lecture topics, and make a class presentation on the paper.

Keywords

Asia, Economic Development, Regional Integration

Schedule

Lecture Topics

[1] Asian economic development and integration

The lecture will discuss the meaning of development, the main development challenges in Asia, the experience of the Asian financial crisis and global financial crisis and policy responses they have spawned in the region, e.g. growth rebalancing, closer economic integration, etc.

[2] Sources of growth and development in Asia

The lecture will briefly review economic growth theories; discuss the sources of growth in Asia - why some countries grew fast while others slow; institutional factors, human capital development, policy lessons and growth strategy.

[3] Inequality and growth, and social protection challenges

The lecture will discuss the relationship between inequality, poverty and growth; provide a survey of theoretical and empirical studies on the inequality-growth nexus, and issues in economic development; and discuss social policy issues and the reform challenges in social protection schemes in Asia.

[4] Macroeconomic management

The lecture will examine issues of macroeconomic management in Asia after the global financial crisis. Issues include monetary policy, exchange rate management and capital flows, exit strategies, etc.

[5] Trade and investment: Role in and contribution to development

The lecture will discuss the role of trade in growth and development, the experience of developing countries, trade policy and income distribution. It will also discuss current topics in globalization such as labor mobility, offshoring, foreign direct investment and transnational companies.

[6] Trade and investment: The rise and impact of production networks

The lecture will discuss how production networks have changed trade patterns in Asia and the impact of production networks on trade flows and bilateral trade balances.

[7] Financial sector development

The lecture will examine the role of the financial sector in economic development, including the evolving role of loan, bond and equity markets over time and issues related to the timing of deregulation and opening of financial markets to external investors. Issues of financial stability will also be considered, including the importance of microprudential and macroprudential frameworks, management of capital flows, and regional cooperation measures.

[8] Environment and development

Emerging economies of Asia have an essential role to play in promoting the global move towards sustainable development. Although their economic activities are circumscribed by developmental preferences, equity concerns, and industrial competitiveness, they are important agents in implementing several measures which would mitigate global environmental challenges like climate change. This lecture will discuss emission and pollution trends—a result of economic development in regional economies—and analyze strategies by which Asia can protect the environment while achieving prosperity. It will capture the complexity of international systems that link domestic, regional, and global levels, and showcase the many actors besides the state which determine whether economic development is environmentally sound and how new policies can help.

[9] Infrastructure: Role in and contribution to development in Asia

The lecture will discuss the importance and role of hard and soft infrastructure development in economic development in Asia. The following topics will be covered: (i) Track records of infrastructure development in the past two decades and the current status of infrastructure in Asia; (ii) Strategies and priorities in infrastructure development in Asia; (iii) Implications of infrastructure development to productivity and income distribution; (iv) Demand estimation for national and regional infrastructure investment in transport, energy, telecommunications, water and sanitation; (iv) Environmental dimension of infrastructure development; (v) Financing infrastructure projects and public-private partnership; and (vi) Regional cooperation toward an integrated and seamless Asia.

[10] Review and extended discussion

This session will review and examine linkages among previous lectures focused on trade, finance, environment, and infrastructure. Students are to raise issues and questions, and to share their views on these issues in an extended discussion.

[11] Regional cooperation and integration in Asia: Trends and prospects

The lecture will discuss the main pillars of regional cooperation and integration in Asia (trade and investment, money and finance, infrastructure, regional public goods), present an analysis of the Asian approach to regionalism, review recent trends of regional cooperation and integration indicators, and analyze the formation of the Asia’s institutional architecture for regionalism.

[12] Capital Flows and Official Development Assistance

The lecture will discuss capital flows to developing economies and the role of official development assistance (ODA). Among others, it will deal with the size and type of capital flows, and why and how ODA is provided. It will also discuss theory and empirical analyses of the growth impact of capital and aid, aid giving and selectivity, and effects of policy, institution, and demography on economic growth. The focus will be on Asia.

[13] Integration

This session will summarize the various lectures discussed. It will include and extended question-and-answer session.

[14 + 15] Student Term Paper Presentations

Students will make presentations based on their Term Papers.

Teaching Methods

Lecture; class discussion

Grading

Each student will be assessed as follows:
• 10% - attendance
• 20% - contribution to class discussion
• 30% - term paper presentation
• 40% - written term paper (individual)

Required Text

Readings for each lecture topic will be advised.

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