MGDI72162
Contemporary issues in development finance
ASSIGNMENT
The essay should be submitted by the deadline indicated by your programme administrator.
Important: report right at the top of the 1st page the essay question you are addressing. Please do not change it or come up with a different title!
Assignment Weight: 100% of the final mark
12pt font size, with 1.5 or double line spacing. Word limit: 3000 words (excluding references, tables, and abstract).
Choose one of the following questions.
Essay Question 1:
Using one or more variables for financial sector development (e.g., from the World Bank’s Global Financial Development Database), investigate whether finance affects economic growth.
1. Choose a sample of countries and explain why you select such countries (e.g., a selection of advanced economies and emerging and developing economies, following the IMF classification: https://www.imf.org/en/Publications/WEO/weo- database/2023/April/groups-and-aggregates ).
2. The analysis should be conducted using a selection of statistical methods, which may include descriptive methods (e.g., scatterplots, time series plots or other) and inferential methods (e.g., regression analysis).
3. Carefully interpret each bit of empirical evidence you present. This means you need to link your findings to the essay question. Your results should be used to produce evidence illustrating the arguments you present (e.g., support for some countries, but not for others).
Essay Question 2:
Finance has an impact on how income is distributed in the economy. While many would agree with this idea, it is still controversial whether its effect relieves or exacerbates inequality and whether it is significant.
Using one or more proxies for financial sector development (e.g., from the World Bank’s Global Financial Development Database) and measures of income inequality (e.g., from the World Income Inequality Database or the World Wealth and Income Database), discuss whether the above idea finds empirical support.
For your analysis, you should:
1. Choose a sample of countries and explain why you select such countries (e.g., a selection of advanced economies and emerging and developing economies, following the IMF classification: https://www.imf.org/en/Publications/WEO/weo- database/2023/April/groups-and-aggregates ).
2. The analysis should be conducted using a selection of statistical methods, which may include descriptive methods (e.g., scatterplots, time series plots or other) and inferential methods (e.g., regression analysis).
3. Carefully interpret each bit of empirical evidence you present. This means you need to link your findings to the essay question. Your results should be used to produce evidence illustrating the arguments you present (e.g., support for some countries, but not for others).
Essay question 3:
Dimensions of financial development (e.g., financial depth or access to finance) show large variations across countries. Why? Using one or more variables for financial sector development (e.g., from the World Bank’s Global Financial Development Database or World Development Indicators), empirically investigate at least one factor explaining why an economy may have higher levels of financial development than others.
For your analysis, you should:
1. Explain why you select a certain country or sample of countries.
2. The analysis should be conducted using a selection of statistical methods, which may include descriptive statistics (e.g., scatterplots, time series plots or other) and inferential methods (e.g., regression analysis).
3. Carefully interpret each bit of empirical evidence you present. This means you need to link your findings to the essay question. Your results should be used to produce evidence illustrating the arguments you present (e.g., support for some countries, but not for others).
Further guidance
1. Statistical software: although Stata is strongly recommended, you may use other software packages should you wish to do so. Some guidance on how to perform basic statistical analysis using Stata is available on Blackboard.
2. Use the literature, and your knowledge from quantitative methods courses, to identify the appropriate methodology. If you try to replicate the methodology used by other authors, this should be duly acknowledged and justified. Use standard academic sources to search for publications and also use your reading list to identify relevant literature.
3. Suggested essay structure:
o Introduction
A brief survey of the related theoretical and empirical literature
(hint:you should be keep this part very focussed, otherwiseyou will have no space leftfor the empirical analysis and interpretation of the results)
o Description of the data and methodology
o Analysis
o Conclusion
o Appendix
o References