ECON 3900 Critical Thinking through Writing (CTW) Assignment Instructions: · This is an individual assignment, so each student should work on it independently. Copying or plagiarism will be subject to the University’s Academic Honesty policy. · Your writing assignment must be typed (1.5 spacing, Times New Roman, 12pt font). · As a guideline, your essay response to the questions posed below should be about 3 pages in length. Grading of this assignment will be done based on the following: · Identifying the issue(s): Clearly identifying the problem(s), question(s) or issue(s). Providing background for the problem(s), questions(s) or issue(s). · Analytics: Applying economic concepts to the questions. Developing logical arguments. Drawing substantiated conclusions. Drawing connections between economic concepts and real-world applications. · Communication and Structural Organization: Language clearly and effectively communicates ideas. Assignment is organized with an introduction, body, discussion, conclusions, and reference section, if applicable. Grammar, syntax and appropriate style. Part I. Read Chapter 8, “Tales of Increasing Returns.” From Easterly W., The Elusive Quest for Growth. MIT Press, 2001. Referring to evidence from the chapter, answer the following questions: 1. How is knowledge different from physical capital? What are the special characteristics of knowledge that make it so useful for growth? How can knowledge help a country grow? Make sure to use examples from the chapter to support your answers. 2. Describe what the chapter means by “traps” by the author. Why “traps” do occur in the economy? What are some government policies that could be used to alleviate the effects of “traps”. Please provided a detailed description of these policies. Part II. Read Chapter 2, “Aid for Investment.” From Easterly W., The Elusive Quest for Growth. MIT Press, 2001. Referring to evidence from the chapter, answer the following questions: 1. Evaluate the following claim: “Savings is not enough for the investment needs of developing countries. As such, if aid agencies and rich countries provide aid to developing countries it will increase their rate of investment and generate economic growth.” Give some examples of these policies. Has such a policy worked, why or why not? 2. What conclusions would we draw about the impact of foreign aid on economic growth and development if we were to use the Solow model to analyze this question? Please use a diagram to supplement your answer. 3. How does your answer in Part II, 2. change if knowledge is a part of factors of production? Specifically, how does your aggregate production change, and its implication of foreign aids?
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