Composition of Trade, Comparative Advantage, and Political Autonomy (Experimenting with the Atlas of Economic Complexity)
Author: Tyler Crown
Objective of the activity
Learning goals: (1) Students will experiment with freely available data and reinforce theoretical knowledge by observing correlations. (2) Students will familiarize themselves with key economic indicators, and apply theoretical knowledge to the interpretation of data.
Pre-class activities
The main reading for this class will be Kohli 2020 (Imperialism and the Developing World, 2020), with the Wallerstein (World-Systems Analysis: An Introduction, 2004) reading occurring earlier. Students should complete these readings before class. The lecture will follow the former, highlighting its discussion of the Washington Consensus, and arguments about nationalist vs. dependent development. Note that in Kohli utilizes the following indicators: For Debt: (1) Debt Service as % of Exports; (2) Debt as % of GNI For Growth: simply Annual GDP Growth (%) For Income Inequality: [Suggest students use GINI instead of Kohli’s bespoke ratio of the top 20% to the bottom 20%.] For Savings: Domestic savings as % of GDP For Exports: Manufactured Exports as % of Total Exports These indicators and their significance will be discussed in class. (See below.) In class, students will be instructed in the use of the main tool to be utilized in the assignment, but the instructor may also share a 7-minute Tutorial Video. (This should be posted to the course website. The link can be found in the attached document.)
In-class activities
The lecture will track Kohli’s generic comparison between Latin American and Asian capitalist national economies. The major variables highlighted by Kohli in this connection are debt service as % of GNI, GDP growth, and manufacturing as % of exports. The instructor will then introduce the Harvard Atlas of Economic Complexity and demonstrate how to use the tool. Make sure to demonstrate each of the functions that will be necessary for the post-class assignment. These functions are listed below: Trade Composition (Products) Trade Composition (Location) Global Share Country Profiles
After Class Activities
Report Instructions: 1. First, view the following data panels on Harvard’s Atlas of Economic Complexity for both the US and China: Trade Composition (Products) (2) Trade Composition (Locations), (3) Trade Over Time, (4) Global Share (by sector). 2. Second, answer the following questions about both the US and China. – Trade Composition (Products).What are these countries’ top 3 export industries? What are these countries’ top 3 imported products? Who are these countries’ top 3 competitors in each of their top 3 export industries? – Trade Composition (Location). Where are these countries’ top 3 export destinations? And their top 3 sources of imports? – Global Share. How have these countries’ share of the global market in their top 3 export industries changed over the last 30 years? (Have they taken over more of the market for their top industries? Have they lost market share? Have they been shifting into different industries?) 3. Choose a third country belonging to Latin America, Africa, or Asia. Answer the same questions above (1-3) for this third country. 4. Review the individualized Country Profile for your chosen third country. Reflect on how the “Economic Structure” (“Export Basket” + “Economic Complexity”) of the US, China, and the third country compare. (For example, is the third country significantly less economically “complex” than China? Are its exports primarily services, manufactured goods, agricultural goods, raw materials, etc.? How do its GDP per capita and projected GDP growth compare to that of the US and China? Note whether you witness significant correlations in your third-country case study. (For example, in your case study, is there a correlation between “economic complexity” and the rate of economic growth? Between the latter and manufactured products as a share of exports?) Discuss whether your findings suggest that your third country has more or less relative political autonomy (compared especially to China).
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