Syllabus

Econ 580, Spring 2009

Prof. Andrés Rodríguez-Clare

Background reading:

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

· David Weill, Economic Growth, Pearson Addison Wesley Press

You should also be comfortable with the Neoclassical Growth Model. A good reference is David Romer, Advanced Macroeconomics, chapter 1 (up to section 1.7) and chapter 2 (only part A). You should be able to answer the following questions: 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?

Introduction

· Acemoglu, Chapter 1

· Pritchett, “Divergence, Big Time”

· Lucas, “Some Macroeconomics for the 21^st Century”

Neoclassical theories of international income differences

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, Quarterly Journal of Economics
Erosa, Koreshkova and Restuccia, 2007, "How Important is Human Capital? A Quantitative Theory Assessment of World Income Inequality"
* Cordoba and Ripoll, The Role of Education in Development
Jones, 2009, "Intermediate Goods, Weak Links, and Superstars: A Theory of Economic Development"

· Restuccia and Rogerson, “Policy Distortions in Aggregate Productivity with Heterogenous Establishments,” Review of Economic Dynamics

Hsieh and Klenow, 2007, "Misallocation and Manufacturing TFP in China and India", forthcoming QJE
Burstein and Monge-Naranjo, 2007, “Foreign Know-How, Firm Control, and the Income of Developing Countries” QJE
Caselli and Coleman, 2006, The World Technology Frontier, American Economic Review
* Córdoba and Ripoll, “Agriculture and Aggregation”
--- Restuccia, Yang and Zhu, “Aggriculture and Aggregate Productivity,” JME 2008
Duarde and Restuccia, “The Role of Structural Transformation in Aggregate Productivity”

Endogenous technology: implications for growth and income differences

· 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

· Córdoba and Ripoll, 2005, “Endogenous TFP and Cross-Country Income Differences”, JME 2008

The Industrial Revolution

· * Becker, Murphy and Tamura, 1990, “Human Capital, Fertility, and Economic Growth,” JPE

· Kremer, 1993, “Population Growth and Technical Change” One Million B.C. to 1990,” QJE

· Lucas, The Industrial Revolution: Past and Present

· Hansen and Prescott, “Malthus to Solow” AER

· * O’Rourke, Rahman and Taylor, “Trade, Knowledge and the Industrial Revolution”

· Galor, “From Stagnation to Growth: Unified Growth Theory,” Handbook Paper

Models of technology adoption

· * Manuelli and Sheshadri, “Frictionless Technology Diffusion: The Case of Tractors”

· Chari, V. V. & Hopenhayn, H. (1991), ‘Vintage human capital, growth, and the diffusion of new technology’, Journal of Political Economy 99(6), 1142–65.

· Matthias Kredler, “Experience vs Obsolescence: A Vintage Human Capital Model”

· Atkeson and Kehoe, “Modeling the Transition to a New Economy: Lessons from Two Technological Revolutions”

· * Caselli, “Technological Revolutions”

Multinationals and development (skip)

· Antras, Garicano and Rossi-Hansberg, “Offshoring in a Knowledge Economy”

· * Dasgupta, “Learning, Knowledge Diffusion, and the Gains from Globalization”

Industrialization, Geography, Structural Change

· Murphy, Shleifer and Vishny, 1989, “Industrialization and the Big Push,” JPE

· Krugman and Venables, 1995, “Globalization and the Inequality of Nations,” QJE

· Krugman, “The Role of Geography in Economic Development”

· Acemoglu, Part VII

Political Economy of Development