Syllabus

Econ 559, Spring 2008

Prof. Andrés Rodríguez-Clare

Before we begin, read:

· William Easterly, The Elusive Quest for Growth, MIT Press

· David Romer, Advanced Macroeconomics, chapter 1 (up to section 1.7) and chapter 2 (only part A). Make sure that you can answer the questions at the end of this syllabus.

First block: neoclassical theories

• Mankiw, Romer and Weil, 1992, “A Contribution to the Empirics of Economic Growth,” The Quarterly Journal of Economics, Vol. 107, No. 2. (May), pp. 407-437.
• Klenow and Rodríguez-Clare, 1997, "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?" NBER Macroeconomics Annual 1997, B. Bernanke and J. Rotemberg ed., Cambridge, MA: MIT Press, 73-102. Data: Appendix
• Hsieh and Klenow, 2007, "Relative Prices and Relative Prosperity", American Economic Review 97, June, 562-585.
• Caselli and Feyrer, 2006, The Marginal Product of Capital, forthcoming in the Quarterly Journal of Economics
• Jones, 2007, A Simple Mincerian Approach to Endogeneizing Schooling
• Erosa, Koreshkova and Restuccia, 2007, "How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality"
• Jones, 2007, "Intermediate Goods, Weak Links, and Superstars: A Theory of Economic Development"
• Hsieh and Klenow, 2007, "Misallocation and Manufacturing TFP in China and India"
• Gollin, Parente and Rogerson, 2002, "The Role of Agriculture in Development," American Economic Review, American Economic Association Papers and Proceedings, vol. 92(2), pages 160-164, May.
• Duarte and Restuccia, 2007, The Role of Structural Transformation in Aggregate Productivity
• Burstein and Monge-Naranjo, 2007, “Foreign Know-How, Firm Control, and the Income of Developing Countries”
• Caselli and Coleman, 2006, The World Technology Frontier, American Economic Review

Second block: endogenous technology

· Romer, 1990, "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October

· Jones, 2005, “Growth and Ideas,” in P. Aghion and S. Durlauf (eds.) Handbook of Economic Growth (Elsevier, 2005) Volume 1B, pp. 1063-1111

· Howitt, 2000, “Endogenous Growth and Cross-Country Income Differences,” American Economic Review 90 (September): 829-46.

· Klenow and Rodriguez-Clare, 2005, "Externalities and Growth", Handbook of Economic Growth, volume 1A, P. Aghion and S. Durlauf, eds., 2005, 817-861 (chapter 11). Data: Panel

· Cordova and Ripoll, 2005, “Endogenous TFP and Cross-Country Income Differences”

· Lucas, 2007, “Trade and the Diffusion of the Industrial Revolution,” NBER Working Paper No. 13286

· Kortum, 1997, “Research Patenting, and Technological Change,” Econometrica, Vol. 65, No. 6. (Nov), pp. 1389-1419.

· Eaton and Kortum, 2001, "Technology, Trade, and Growth: A Unified Framework." European Economic Review, 2001, 45(4-6), pp. 742-55.

· Ramondo and Rodríguez-Clare, 2008, “The Geography of Trade and Multinational Production”

Questions about the Solow model: What drives long run growth in the Solow model? What are the key determinants of the steady state income level? What happens to consumption in steady state if the savings rate increases? What is the golden-rule level of the capital stock? What is the relationship between the share of income going to capital and the elasticity of steady state income per capita w.r.t. s? What does it mean to say that the speed of convergence is 4%? How is this obtained? Can we explain differences in income levels across countries with the Solow model? Why or why not? What is the implication of the Solow model for convergence across countries? Is this satisfied in the data? Can you think of a simple reason for this failure of the model? What is the implication of the Solow model regarding the direction of the capital flows? Is this satisfied in the data? With endogenous savings, will the economy be at the golden-rule level of the capital stock?