The exam

The ECON621 exam:


  • This is a 24-hour, take-home exam paper. Have your hard copy answers at my office tomorrow at 9 o’clock.
  • All four questions are compulsory.
  • Answer the questions in op-ed, blog post style – there is no need for formal Harvard style referencing, but you do need to support your arguments with statistics and sources.
  • It is about individual effort. Submitting someone else’s work as your own is as unacceptable as ever.


Question 1:

The policy response to the global economic slowdown has come from centrals banks. They have been using conventional and increasingly unconventional ways, to help troubled economies. But how is this supposed to help the real economy? Lots have been written about big bazookas or keeping the powder dry, but could it be that they are out of bullets?

Outline and evaluate the monetary policy response to the global economic slowdown.

  • You can focus on the US economy and emerging markets.
  • Do not only describe the policy actions – you need to critically evaluate the nature of the policies and possible consequences.


Question 2:

In the last few weeks the crisis in the Eurozone has not made the headlines, not because it has been resolved, but rather because things have been getting worse more slowly. But Europe’s options are narrowing since growth is slow and perpetual austerity is not politically workable.

What needs to be done to avoid a breakup of the Eurozone?

  • You need to argue your proposals and provide as much evidence as possible to support them, i.e. you cannot just say payback more debt, or raise more taxes, you need to back it up with numbers and other people’s research.


Question 3:

In a recent paper William Easterly and Ross Levine examine the colonial origins of economic development (see They find a strong and positive impact of colonial European settlement on development. This view is in contrast to the arguments outlined in Acemoglu and Robinson’s book Why Nations Fail. They argue that inclusive political and economic institutions are necessary for sustained growth and development.

  • Critically contrast the views of Easterly & Levine with those of Acemoglu & Robinson.
  • Summarise your views as it applies to South Africa – what have been the roles of political and economic institutions in growth and development pre- and post-1994?


Questions 4:

Growing inequality is one of the biggest social, economic and political challenges of our time. Is it inevitable? Can we make growth and development more equitable?

  • Answer these questions by discussing the evolution of income inequality over time, the causes / drivers of inequality and the policy prescriptions for greater equality.
  • Apply your arguments to and provide evidence for the case of South Africa.


Best of luck ladies and gentlemen.


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