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Is it possible for Latin American countries to "adopt" the "Asian model of economic growth"?

What policies from the East Asian countries could be exportable to other countries and potentially be successful?

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019
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Related questions

(Shattering the Myths about U.S. Trade Policy, Development Lessons for Asia from Non-Asian Countries), and view this TED Talk on foreign direct investment.

Then, look at U.S. trade policies and at another market's trade policies. Contrast and compare the two countries in terms of their major trade policies. Which policy or policies do you think are most important and why? What do you think might be a necessary trade policy that has not yet been implemented? What do you think is the future of trade policies?

 

Multiple Choice

1. Assume that the money multiplier equals 2.5 and if the Fed purchases $10 million in bonds from a bank, the monetary supply will:

  1. Increase by $10 million.
  2. Increase by $25 million.
  3. Decrease by $10 million.
  4. Decrease by $25 million.

2. The monetary base is defined as:

  1. all currency in circulation.
  2. checkable deposits at depository institutions.
  3. excess reserves in the banking system.
  4. currency plus total banking reserves.

3. Which of the following means of financing federal government spending will increase the monetary base?

  1. raising the corporate income tax.
  2. raising the personal income tax.
  3. selling bonds to the public.
  4. selling bonds to the Fed.

Short Answer

1. Assume the Federal Reserve Board is undertaking an expansionarymonetary policy. Explain the details of how the expansionary Fed impacts each of the following:

  1. Open market operations - how does the Fed use open market operations for an expansionary monetary policy?
  2. The monetary base.
  3. Money Supply.
  4. Fed funds interest rate.
  5. Long-term interest rates.
  6. Business Investment.
  7. Aggregate demand.
  8. Economic growth.
  9. Unemployment rate.

2. Under certain circumstances, expansionary Fed policy may not have much of an effect on the rate of economic growth. Give a reason why, and explain?

3. Regarding the Asian currency crisis, answer the following questions:

  1. Describe the normal reasons why a currency undergoes a significant depreciation and what were the important characteristics of the Asian countries involved in the crisis?
  2. What are some expected domestic economic consequences of the currency crisis for the countries involved? Focus on:
    • import prices of goods and services into the Asian country.
    • export prices of goods and services from the Asian country.
    • Domestic inflation rates.
  3. Assume that the countries involved undertake a tight monetary policy and raise interest rates in response to the crisis. What are the two primary reasons for raising interest rates in their case?
  4. Given high domestic interest rates, what is the economic outlook for these Asian countries in the next few years?

Assume the following problem is based on 2010 economic data for the following countries associated with the North American Free Trade Agreement (NAFTA):

United States

Mexico

Real GDP per capita $44,000

Real GDP per Capita $11,000

a. What is the definition and the formula for the rule of 70?
b. Assuming that real GDP per capita in Mexico grows at the rate of 5 percent per year, how long will it take for Mexico's economy to double?
c. How many years will it take for Mexico's economy to reach the level of the United States real GDP per capita in 2010?
d. Using economic growth theory, what has helped Developing Countries (DVCs) like the Asian Tigers of Singapore, South Korea, Thailand, Hong Kong, and Japan transform into Industrially Advanced Countries (IACs)? e. Based on our discussion in class, Superstar Economist Alan Greenspan classified the large transition economies of India and China as Elephants. Explain the meaning of this phrase

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