Personal Finance

The purpose of this course is to give students an in-depth discussion of academic and policy/practitioner research to be able to address and evaluate the following questions. What are the challenges in measuring poverty? How pervasive is poverty and what are the underlying drivers of poverty? Has economic growth in developing countries (such as Brazil, China and India) helped to alleviate poverty? How pervasive is poverty in the United States? What are informal credit markets? Who participates in them? What are the interest rates and default rates in these markets? What are the challenges to the flow of credit to the poor borrowers? How can they be surmounted? What is the role of microfinance in delivering financial services to the Poor? How successful has been this effort? What are the challenges? What are some of the recent capital market innovations in the markets for the Poor? Can they help to scale up and bring down interest rates? - What are some of the innovations introduced by corporations and governments in this field? With a view to addressing the questions above, the course will begin by examining how poverty is measured, and characterize (using different measures) how pervasive poverty is. In this context, we will pay special attention to simple (exogenous) measures of poverty rates, and multi-dimensional measures of poverty, which link poverty to some underlying deprivations (such as lack of access to education, healthcare, living standards, etc.). We will also examine how the poor organize their lives, budget their consumption expenditures, and survey their access to certain services. After this the course will present evidence on the extent to which poverty has been alleviated in different parts of the world, and how the results compare with the Millennium Development Goals (MDG) set by the United Nations in 2000. Newly established Sustainable Development Goals will be briefly presented. We will also explore the extent to which economic growth in countries has influenced poverty rates. In this context, we will examine the poverty alleviation process and major indicators of poverty in Brazil, China and India before and after these economies began to experience significant economic expansion: this discussion will shed some light on the relationship between economic growth and poverty rates. After characterizing poverty, the course will turn to the role of markets (broadly defined to include private markets, corporate social initiatives, and government initiatives) that address the needs of the poor