AGEC 340 – International Economic Development Course slides for week 15 (April 20 & 22) Capital flows, migration and aid* • Our last week of new material! • Reminder: final lit review due Fri. Apr 23 at 5 pm • Remember to save and upload without your name (First page should have only the title and date) • Keep a version with your name and this course’s name for your files (e.g. to use as a writing sample) u are following the textbook, this is chapte
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Our last week of new material! Reminder: final lit review due Fri . Apr 23 at 5 pm
AGEC 340 – International Economic Development Course slides for week 15 (April 20 & 22) Capital flows, migration and aid*. Our last week of new material! Reminder: final lit review due Fri . Apr 23 at 5 pm Remember to save and upload without your name - PowerPoint PPT Presentation
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AGEC 340 – International Economic Development
Course slides for week 15 (April 20 & 22)
Capital flows, migration and aid*
• Our last week of new material!
• Reminder: final lit review due Fri. Apr 23 at 5 pm • Remember to save and upload without your name
(First page should have only the title and date)• Keep a version with your name and this course’s name
for your files (e.g. to use as a writing sample)
* If you are following the textbook, this is chapter 19.
So far, we have focused on choices within a country.How might international relationships matter?
• Remember, the highest national income usually comes from– free international trade (limit tariffs, quotas, etc.), but– active domestic policies (taxes, subsidies & regulations) to offset
externalities and market failures
• So a country’s own government can help it grow– …but what can one country do to help another?
so far we’ve seen R&D for new technology WTO and other treaties to facilitate free trade
this week: capital flows, migration, foreign aid
First, capital flows:big, growing… and very unstable
Source: Reprinted from IMF (2007), Finance and Development 44(1).
Even the direction of capital flows is hard to predict: for the past decade, it has increasingly flowed out of poorer countries, into the U.S.
Source: Reprinted from IMF (2007), Finance and Development 44(1).
The poorest countries have repaid or been forgiven much of their past debt
For low-income countries, governments’ foreign aid is very important
The role of foreign aid: more detail, updated
Foreign aid and private flows to developing countries from all donor countries (2006 US$ b.)
Government’s foreign aid provides public goods (better government policies, health, education, and economic growth) .
• Governments’ foreign aid can be a complement to private investment & trade, as aid supports growth which makes it profitable for firms to expand investment & trade
What about migration?
Source: Reprinted from Migration Policy Institute, Washington DC (www.migrationpolicy.org).
Migration is transforming our lives!
Source: Reprinted from Migration Policy Institute, Washington DC (www.migrationpolicy.org).
The current wave of migration is a blast from the past…
Source: Reprinted from Migration Policy Institute, Washington DC (www.migrationpolicy.org).
my ancestors
all arrived in
the 1880s
…but of course today’s migrants come from different regions
Source: Reprinted from Migration Policy Institute, Washington DC (www.migrationpolicy.org).
The demand for migration is stronger than ever
Source: Reprinted from L. Pritchett, “Let Their People Come: Breaking the Gridlock on Global Labor Mobility.” Washington: Center For Global Development, 2006
Migration is especially important at low skill levels
Source: Reprinted from L. Pritchett, “Let Their People Come: Breaking the Gridlock on Global Labor Mobility.” Washington: Center For Global Development, 2006
Sources: Global Economic Prospects 2006: Economic Implications of Remittances and Migration (World Bank), World Development Indicators 2007, and Global Development Finance 2007.
Remittances and capital flows to developing countries
:
Reprinted from World Bank data, online at http://go.worldbank.org/QOWEWD6TA0
Migration varies by region: Comparing Indiana to the US as a whole...
Source: Reprinted from Uris Baldos, Tani Lee, Delphine Simon and Brigitte Waldorf , “Immigrants in Indiana: Where They Live, Who They Are, and What They Do.” Purdue Agricultural Economics Report, February 2009.
Migration varies by region: Comparing counties within Indiana…
Source: Reprinted from Uris Baldos, Tani Lee, Delphine Simon and Brigitte Waldorf , “Immigrants in Indiana: Where They Live, Who They Are, and What They Do.” Purdue Agricultural Economics Report, February 2009.
Migration varies by region: Where do Indiana’s immigrants come from?
Source: Reprinted from Uris Baldos, Tani Lee, Delphine Simon and Brigitte Waldorf , “Immigrants in Indiana: Where They Live, Who They Are, and What They Do.” Purdue Agricultural Economics Report, February 2009.
Migration varies by age and sex: Who are Indiana’s immigrants?
Source: Reprinted from Uris Baldos, Tani Lee, Delphine Simon and Brigitte Waldorf , “Immigrants in Indiana: Where They Live, Who They Are, and What They Do.” Purdue Agricultural Economics Report, February 2009.
Figure 4. Immigrants in Indiana by Age and Sex in 2000 and 2006
Migration varies by education level: Immigrants tend to have either very low or very high education
Source: Calculated from Uris Baldos, Tani Lee, Delphine Simon and Brigitte Waldorf , “Immigrants in Indiana: Where They Live, Who They Are, and What They Do.” Purdue Agricultural Economics Report, February 2009.
32.2
13.9 18.210
39.464.8
21.5
58.3
28.421.3
60.2
31.7
0
10
20
30
40
50
60
70
80
90
100
Immigrants Native Born Immigrants Native Born
Indiana Tippecanoe County
Bachelor’s, Graduate or Professional Degree
High School or Some College
Less than High School
How else do we in the US affect world development?
US Trade Policy and Trade Agreements
• Does the US have free trade?Average import tariff rates by