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x What are some critiques of these assumptions? x In each model, what are the factors that drive growth? Explain how/why these factors determine growth. x What are some of the testable predictions of these models? To what extent does empirical evidence support each model? Are the models realistic—why or why not?
x What are some policies that would raise per capita income growth in each model?
OPTION 2: Based on the lecture notes, assigned readings, and other appropriate sources discuss the following statement: “Eliminating income inequality should be a key development priority.” In writing your essay:
x Clearly state if you agree or disagree with this statement, and to what extent.
x Consider under what circumstances if any, inequality may be permissible or desirable from an economic perspective, and under what circumstances, if any, it is harmful or undesirable.
x Consider what policies are available to a policymaker to combat poverty and increase growth
o Discuss which policies you think are the best and why.
o Compare policies that decrease income inequality to those that increase growth using other methods.
o Carefully explain what happens when income inequality is decreased using theory you have seen in lectures and empirical evidence.