Final Exam

Here is a set of 10 potential final exam questions. As per the exam directions, you will only be asked to answer 3 questions.

I: The Long Run: Game Stoppers

China faces possible “game stoppers”. Discuss one of the issues that could result in a sharp decline in growth or impose chronic costs sufficient to lower incomes. (Do not discuss the anticipated slowdown in long-run growth due to ordinary diminishing returns!)

II: The Long Run: Inputs

Demographics is destiny: China’s economic and social future has already been determined in the choices of its mothers. Argue!!

III: Reform: Hukou

You are tasked by Premier Xi with abolishing hukou. Why does that (or does that not!) matter? What steps do you need to take to make hukou reform meaningful?

IV: Reform: Aging

Humans are bad at long-run decisions. Left to their own accord, they tend to underinvest in education and preventive medicine, and fail to understand savings decisions in the face of the vague imperatives of far-distant aging. At the macroeconomic level, there’s also the PayGo issue. Discuss one of these issues and potential policy responses.

V: Reform: Negative Externalities

In one word, coal! – but also water. What do they teach about China’s political economy? Is there any hope?

VI: Cities: Positive Externalities

Urbanization is China’s future – as it is for all high income societies. It is driven by positive externalities, and in turn enables others. Elaborate!!

VII: Households

Without disentangling China’s multiple regional cultures and shifting status symbols we may not know which brand of cigarettes to give as a gift. Fortunately, most of the multitude of mundane decisions – savings/consumption, jobs/career, housing, education and family – reflect universal economic considerations.
Analyze one such decision, using theory and highlighting the key factors affecting behavior.

VIII: Status

Improving one’s relative status is an important goal of most individuals. China is no exception. Discuss how status-seeking behavior affects daily consumption decisions as well as life cycle considerations and potentially other aspects of economic activity.

IX: Empire

China’s historical legacy as a multi-ethnic, geographically-extensive empire continues to shape many policy issues a century after the fall of the Qing dynasty. Argue!!

X: Decentralization

Adjusting the dimensions along which revenues and responsibilities are decentralized is the single biggest long-run challenge China faces.

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