ECGA 6470: Economic
Growth & Development Spring 2009
Course Description
Requirements Course Calendar
Problem Set #1A Problem Set #2
Jones
Appendix C Eviews file Jones Appendix C Spreadsheet
Three Growth Models handout Barro’s AK Model with
Government
Texts:
PhD students: Agénor, Pierre-Richard (2004) Economics
of Adjustment and Growth,
2nd ed (HUP) 0674015789
Barro, R. & J. Sala-i-Martin (2004) Economic
Growth 2nd ed (MIT Press) 0262025531
Masters: Jones, Charles I. (2001) Introduction
to Economic Growth 2nd ed (W.W. Norton 0393977455)
Recommended (some required reading):
Aghion, P and P. Howitt (1998) Endogenous Growth
(MIT Press,
Barro, Robert J. (1998) Determinants of Economic
Growth (MIT Press, Boston).
Lucas, R.E. (2002) Lectures
on Economics Growth (
Parente, S. and
Rodrik, Dani (2003) In
Search of Prosperity (
Romer, David (2005) Advanced Macroeconomics (chapters
1-3)
Reference & background reading (click to full list below):
Aghion, P. & J.Williamson (1998) Growth,
Inequality & Globalization,
Bhalla, Surjit (2002) Imagine
There’s No Country, www.IIE.com (0-88132-348-9)
Ros, Jaime (2000) Development Theory &
Economic Growth (U of
World Bank, (2000) The Quality of Growth (QOG)
World Bank (1993) The East Asian Miracle (
Gylfason, Thorvaldur, 1997, Principles of Economic
Growth (
Topics-Lectures: Part I Development
and Growth: Theory and Evidence
Introduction: Globalization and Poverty Income Convergence
or Divergence?
Growth
Models:
Endogenous
Growth I: Population/human capital Endogenous
Growth II: Technical change
Poverty
Traps—industrialization Empirical
Evidence on convergence
Part II. Growth promoting Economic Policy
Openness to Trade Openness to Capital Flows
Financial Development Poverty/Inequality Reduction
Macroeconomic Stability Geography, Institutions
Reading/Topics: *required readings: **high priority Journal Acronyms
First week: read Jones Chapter 1-2 and Sachs et. al BPEA Ending Africa’s Poverty Trap pp. 121-31.
1. Introduction: Growth Miracles and Poverty Traps
Sachs
et. al BPEA Ending Africa’s Poverty Trap pp. 121-31.
Lucas, R.E. (2000) Macro for the 21st
Century. JEP,14:1, Winter 2000 or Chapt 4 of .
Lucas
(2002) pp. 1-23 and pp. *251-253 “Making a Miracle”
Jones 2nd ed. Chapter 1,
Brad de Long (2000) Cornucopia
Agénor Chapter 10 pp.
411-30 *Barro & Sala-i-Martin
Introduction and Chapter 1
Case Study 1.2 Institutions vs. Geography: how rich countries
became poor
Acemoglu, Daron, Simon Johnson and
James Robinson (2006) “Understanding Prosperity
and Poverty: Geography,
Institutions and the Reversal of Fortune” the
long version…
Rodrik, Dani
(2003) Institutions
Rule IMF Finance & Development Issue
Sachs, Jeffery (2003)
Case Study 1.2 Is globalization good for
the poor?
Fischer, S.Globalization and its Challenges AER, May 2004;
Dollar
& Kraay Spreading the Wealth Foreign
Affairs
Bhagwati,
J “Anti-Globalization: why? Stilitz, J.
Globalization & Growth & Discontents
R.
Rajan & Zingales (2003) Saving Capitalism…, book excerpt, Milken Institute Review
Case
Study 1.3: Is World Inequality Rising or Falling? Lecture notes
Sala-i-Martin (2002) The Disturbing "Rise" of Global Inequality
March 12, 2002
Ravallion “Have we already Met the Millennium Development Goals?”
Bhalla Chapters 1-3 and Two Policy Briefs Webcast:
Bhalla vs. Ravallion
Schultz, T. Paul (1998) Inequality & the Distribution of World Income
Yale Growth Ctr #784
Case Study 1.4: Global
Imbalances Aziz & Dunaway (2007) China’s
Rebalancing Act
WB GEP 2007 Managing
the next wave of Globalization
*Overview
2. Three
Growth Models: Conditional vs. absolute convergence:
Agénor
Chapter 11
*Barro(1997) Chapter 1 *Jones 2nd
ed, Chapt 2 & Chapt 3 Problem Set #1A Jones Chapter 2
McCallum, B. (1996) Neoclassical vs. Endogenous Growth FRB of Richmond
Jones
Chapts. 2,3 Romer, D. Chapts 1 & 3 Jones Chapter 1; Robelo, S. “Knowledge and Growth”
Pritchett, (1996)
Divergence Big Time. Lucas, R.E.(1988) "Mechanics of
Development" JME,22,3-42.
Solow, R. M.
(1956) "Contribution to the Theory of Growth," QJE, 70, 65-94.
Mankiw, Romer, and Weil, "Empirics of Growth," QJE,
May,1992,107:2,407-38.
3.
Endogenous Growth I Human
Capital: *Agénor Chapter 12 A&H ch 1 Answers
Population, Human Capital
& Growth-- Aghion and Howitt (1998) Chapter 1 pp. 22-29
Jones, C. (1998) Population
& Ideas: A Theory of Endogenous Growth,March,Stanford U.
Kremer (1993) Population &
Technical Change: 1 Million BC to 1990, QJE,108, 681-716
Becker, Murphy and Tamura (1990)
Human Capital, Fertility & Growth, JPE, 98:5, s12-37
4. Endogenous Growth II Technical Change: Jones *Chapters 4-8 *A&H—pp. 35-39
Romer, Paul M. (1990) Endogenous technological
change. JPE 98(5), S71-S102.
Romer, Paul
M,(1986)"Increasing Returns and Long-run Growth," JPE,94:5,1002-37
AghionHowittChapter1_read.pdf
5. Poverty Traps: Population, Industrialization and Market Structure
*B-SIM
pp. 74-77 Sachs et. al BPEA Ending Africa’s Poverty Trap
pp. 121-47.
*Krugman (1996) “The Fall and Rise of Development Economics”
Journal Acronyms
Murphy, K. Schleifer & Vishny
(1989) "Industrialization & the Big Push"
JPE, 97:5, 1003-27
Robelo, S. (1992) “Growth in open economies” Carnegie-Rochester
Public Policy Series, 36,5-46.
Krugman, P. (1994) Counter-Counter Revolution In Development Theory,
WBER (similar to “Rise &Fall’)
6. Empirical Evidence: correlates of growth and some controversies .
Sim
Chapts 11,12 Agénor Chapter 13 Sala-i-Martin 15 Years of Growth Theory
Levine R. & D. Renelt (1992)"Cross-cty
Growth Regressions," AER, Sept,84:2,942-63 [cd]
*Barro, R. J. (1998) Determinates of Economic Growth Chapt 1. and
TEAM pp. 60-69.
*Sala-i-Martin,
J. (1997) “I just ran two million
regressions,” AER,
May 1997.
Barro, Robert J., "Growth in a Cross Section of Countries," QJE,
May 1991,106, 407-43.
Barro, R.J. and X. Sala-i-Martin, "Convergence," JPE,
1992, 100 (2), 223,251.
Rodrik growth regressions and economic policy
6.1 Endogenous vs. Exogenous Growth and
covergence
*McGratten,
E. (1998) “A Defense of AK Growth Models, FRBMQR,
Fall,22:4, 13-27
Jones, C. “Time Series Tests of Endogenous Growth
Models," QJE, May 1995, 110, 495-525
6.2 Case Study: East Asian Growth: A
Miracle?
Alwyn Young (1995) “The Tyranny of Numbers..”
QJE (a “boring and tedious paper”)
WB Team Report Chapter 5 (CD) Krugman Myth of Asia’s Miracle
*Bosworth and Collins (2003) “The Empirics of Growth: An Update” BPEA,
#2
William Easterly and Ross Levine (2001)
"It's Not Factor Accumulation:
Stylized Facts and Growth Models" WBER,
Volume 15, No. 2
II. Promoting Growth: Good policy or good luck? Journal Acronyms
8.
Openness and Growth I : Trade and Growth
Growth in open Economies handout
Models: *Basu
and Mcleod Terms of Trade Fluctuations and Economic Growth JDE, 1992
*Sachs, Jeffery and Gallup (1998) Geography and Economic growth
Matzuyama, K, (1992) Agricultural Productivity and Comparative Advantage,
JET, 58(2).
Young, Alyn (1991) Learning by Doing and the
Dynamic Effects of International Trade, QJE
Empircal Evidence: *Rodrik (2007) Real Exchange Rates and Economic Growth
*Rodriguez
and Rodrik. (2000) Trade Policy and Economic
Growth: A Skeptics View"
*Warner, Andrew (2003) Once More into the Breach. Center for
Global Development WP
Dollar and Kraay (2004) Trade, Growth and Poverty, Economic Journal,114:493,22-49. (final
version)
Sachs, Jeffrey D. & Andrew Warner(1995)
“Economic Reform & Global Integration.”
BPEA (1):1-118.
Edwards, S, (1997) Openness and Growth: What do We Really Know? Economic
Journal,
Dollar, David (1992) Outward-Oriented Developing Economies Really
do Grow More
Rapidly, Economic Development and Cultural Change, 523-43.
9. Capital Flows, Savings and Growth: Capital Mobility and
Growth (Agénor Chapter 16)
Prasad et. al (2007) Paradox of Capital
and Kose et. al. (2007) Beyond the Blame Game
Prasad
et. al. (2006) Foreign Capital and Economic Growth Subramanian slides
Henry,
Peter Blair Capital Account Liberalization: Theory, evidence and
speculation
Lucas,
R. (2002) Why doesn’t capital flow from rich to poor countries?
(chapter 2)
Macroeconomics for the 21st Century
(chapter 4)
Carroll and Weil (1994) Savings
and Growth a Reinterpretation, CRCS on Public
Policy 40, 33-92, North Holland. Part1 Part2 Part3
*Pierre-Olivier Gourinchas and
Olivier Jeanne (2002)
Benefits of Capital Account Liberalization for Emerging
Economies (2002)
Capital Flows to Developing Countries: the Allocation Puzzle (2006)
Tornell, A, Westerman & Martinez (2004) Financial Liberalization Growth And Crises
Edwards, S (2000) Capital Mobility and
Economic Performance, NBER, (cdrom)
De Gregorio (1998) Financial Integration,
Financial Development and Economic Growth (cd)
World Bank (2001)
Capital Flows and Economic Growth, Global
Dev. Finance Chapter 3
Hausman, Ricardo and Eduardo Fernandez-Arias
2000 “Foreign Direct Investment: Good Cholesterol?”
10. Financial Development, Debt and Growth: Pattilo et. al (2002) External Debt and Growth
*Levine, Ross (2003) More on finance and growth: more finance, more growth?
Economic Review
St.
Louis Federal Reserve Bank,
*Levine Finance and Growth Slideshow World Bank
Ross Levine at RepEc
*Levine,
Ross (1997) Financial Development and Economic Growth JEL, XXXV,688–726
Espinosa,
M and W. Hunter (1994) Financial Repression & Development, Economic
Review,
Federal Reserve Bank of Atlanta, Sept/Oct.
King,
R. and R. Levine (1993) "Finance, Entrepreneurship, &
Growth" JME, 32:3,
Greenwood,
J., & B. Jovanovic, "Financial Development & Income Dist," JPE,
5:1, 1990: 1076‑107.
Bencivenga,
V, & B. Smith (1991) "Financial Intermediation &
Endog.Growth,"RES, 58,195-209
McKinnon,
R. (1991) The Order of Economic Liberalization (Johns Hopkins Press).
McKinnon,
Ronald, Money and Capital in Economic Development, Brookings, 1973.
11. Pro-Poor Growth,
Redistribution and Political Economy lecture notes
Aghion & Williamson (2000) Growth Inequality and Globalization, Intro & Chapter
1
A&W Part I, Inequality and Economic Growth, Aghion JEL Survey.
Barro, 2008 Inequality and Growth Revisited
*Alesina and Perotti (1994) The
Political Economy of Growth Survey, WBER (photocopy)
Forbes, Kristen The Relationship
between Inequality and Growth, MIT (AER 2001)
Benabou, Roland (1997) “Inequality and
Growth” NBER Macroeconomics Annual 1997,
Rodrik, D. (1997) Democracy and Economic
Performance, processed, Harvard Univ.
Rodrik, Dani (1998) “Growth Collapses”
processed, Inequality and Growth Further Reading
12. Macroeconomic Stability and Growth
Inflation and Growth—Further Reading (*Barro, Determinants
of Growth, Chapter 3)
*Fischer,S. (1993) The Role of
Macroeconomic Factors in Growth, JME, 32,485-512 [cd]
*Easterly, William. The Lost
Decades: Explaining Developing Countries' Stagnation 1980-1998
World Bank, Development Research Group, Jan 2000, (forthcoming)
presentation
*Barro, R.(1990) Government Spending
w/ Endogenous Growth, JPE,98,103-25[cdrom]
Bruno, Michael, & W. Easterly (1998) "Inflation Crises &
Long-Run Growth." JME 41:1:3-26
DeGregorio, Jose (1993) Inflation, Taxation and L-R Growth, JME,
39,59-84.
Easterly, W. and S. Rebelo (1993)
Fiscal Policy and Economic Growth, JME, 32, 417-58.]
Easterly, William(1993) How Much do Distortions affect
Growth? JME, 32, 187-212.
13. Growth Strategies: Institutions vs. Policies
Rodrik (2008) Second Best Institutions
Rodrik (2003) Growth Strategies Rodrik growth regressions and economic policy
Acemoglu, Johnson and Robinson (2001) Colonial Origins of Comparative Development
AER
AJR (2004) Institutions as The Fundamental Cause of
L-R Growth (2003) Unbundling Institutions
Rodrik
Getting institutions right: a
primer *Johnson et. al. (2006) Levers for Growth,
F&D March
Rajan and Zingales (2006) “Persistence of Underdevelopment: Institutions,
Human
capital or constituencies?” NBER Paper #12093 Powerpoint summary
Glaeser
et. al (2004) “Do institutions cause Growth?” NBER
*IMF, WEO April
2003 Institutions & Growth Chapt. 3
Rodrik, Institutions Rule Finance & Development Issue
Institutions Rule: Longer paper
Edison, H. How Strong are the links?
14
Natural Resources and Growth
Sachs,
J and A. Warner (1995) Natural Resource
Abundance and Growth HIID WP #517
15.
Pro-poor Growth case studies:
World Bank, Pro Poor Growth in the 1990s LatAm Virtuous circles
*Rodrik, D. (2003) Growth Strategies (NBER working paper
10050) Boston, MA
*Pritchet, Lant (2004) Socialist
Star and Democratic…Growth Theory, Vietnam and the Philippines
in Rodrik, D. ed. In
Search of Prosperity (Princeton University Press).
World Bank (2004) Economic Growth in the 1990s: Learning from a Decade of
Reform
China
and India: Rosendo’s China Case Study IMF China Case Study China Trade and Growth
Dreaming with Brics India’s pattern of Development (Kochar & Rajan)
China In Search of Prosperity Bosworth/Collins (2007) China vs. India: Growth Account
Africa: An African Success Story: Botswana Africa’s Growth Tragedy (Easterly & Levine)
LatAm:
Latin America in the Rear View Mirror
Transition: Long Term Prospects for the Russian Economy, ECB (Elitza Mileva, coauthor)
III.
Case Study Data Resources
Maddison
Long LatAm Growth and Poverty Case Study Question 2006
WDI
Query file (right click and “save target as”)
South Africa Charts
Case Study Excel Template (use this if possible) WEO April 2007 Data Set
World Bank GDN Query (no
password) Bourguignon and Morrison Spreadsheet
World Bank WDI Online (password required)
Penn World Tables
World Bank Governance Data Bases World Business Environment Surve (WBES)
http://www.ifc.org/ifcext/economics.nsf/Content/ic-wbes
World Bank Doing Business IFC Doing Business Website
IV.
Other Growth and Development Research/data Sources:
Groningen Growth and Development Centre
NBER Economic Growth Papers CEPAL (ECLA) online data base
Collins Bosworth Sources of Growth Database updated to 2003
World Bank: Macroeconomics and Growth World Bank Research on Aid and Growth
Global Development Network Harvard CID Data Sets
Global Development Network Database World Bank Data and Maps
Dani Rodrik’s Growth Research page Jonathan Temple’s Growth Web Page
AER: American Economic Review JEL: Journal of Economic Literature
JEG: Journal of Economic Growth JEP: Journal of Economic Perspectives
JET:
Journal of Economic Theory
JDE: Journal of Development Economics TEAM: The East Asian Miracle Report
JME: Journal of Monetary Economics JPE: Journal of Political Economy
NBER: National Bureau of Economic Research RES: Review of Economic Studies
QJE: Quarterly Journal of Economics WBER: World Bank Economic Review
Course
Description: Why do people living in some
countries grow rich, while others remain poor?
This
course surveys the growth and development literature with an emphasis on long
term growth.
This
year’s special theme is growth miracles and poverty traps—why does per capita
income grow
at
a rapid 5-6% pace—doubling every 12 years or so-- in China, Korea, India and
Vietnam while
over
the past three decades incomes have stagnated or even declined in Argentina,
Venezuela,
Nigeria
and the Philippines for example? Since developing countries as a group overall
are enjoying
first
part of the course explores several key growth models and some empirical
evidence on long term
growth
and convergence. The second part of the course
turns to growth strategies including the role
booms
in India and China were associated with both internal reforms and trade
liberalization: which
economy
of growth, considering a number of recent arguments that make policy itself
endogenous,
endowments
in shaping governance and therefore long term growth performance of many
countries,
Requirements
: The final and midterm exams account for 40%
and 25% of the course grade respectively.
A
few problem sets and a country case study contribute the remaining 35%. The
project also provides
15
minute summary of their case study to the class near the end of the term.
13. Geography, Institutions, Natural Resources
*IMF, WEO April 2003 Institutions & Growth Chapt. 3 Rodik *Getting institutions right: a primer
Rodrik, Institutions Rule Finance & Development Issue Institutions Rule: Longer paper
Edison, H. How Strong are the links?
Sachs, J and A. Warner (1995) Natural Resource Abundance and Growth HIID WP #517
*Pritchet, Lant (2004) Socialist Star and Democratic…Growth Theory, Vietnam and the Philippines
in Rodrik, D. ed. In Search of Prosperity (Princeton University Press).
*Rodrik, D. (2003) Growth Strategies (NBER working paper 10050) Boston, MA
Radelet, et.al. (2003) MCA country selection process (CGD web site)
AER: American Economic Review JEL: Journal of Economic Literature
JEG: Journal of Economic Growth JEP: Journal of Economic Perspectives
JDE: Journal of Development Economics TEAM: The East Asian Miracle Report
JME: Journal of Monetary Economics JPE: Journal of Political Economy
NBER: National Bureau of Economic Research RES: Review of Economic Studies
QJE: Quarterly Journal of Economics WBER: World Bank Economic Review
III. Growth and Development Research/data Sources:
World Bank: Macroeconomics and Growth
World Bank Research on Aid and Growth
Global Development Network Database
Dani Rodrik’s Growth Research page
Jonathan Temple’s Growth Web Page
IV. Case Study Description and Resource Materials
Case Study Excel Template (use this if possible)
World Bank GDN Query (no password needed)