KECD 2215 - MACROECONOMICS 1: Growth

Organisation

This course is an introduction to modern theoretical and empirical research in economic growth. Economic growth means long-run economic growth. We won't be preoccupied with quarterly fluctuations in GDP, but with long-run changes in economic output.

Why are developed countries like the US and France so much richer than they were 200 years ago?

Why are they so much richer than some countries? Why are countries like China catching up?

We will start with so-called exogenous growth models (topics 1–3).

These models deal with the question: what drives the growth rate of output per capita?

Their authors paid particular attention to capital accumulation and technological progress.

We'll then study empirical evidence on the drivers of growth (topics 4–5).

We'll move to modelling endogenous technological progress (topics 6–8).

How are ideas generated? What is growth: more of the same goods, a new type of good, an improvement in the quality of the goods?

Finally, we'll study fundamental determinants of growth (topic 9): institutions, trade, geography, etc.

Outline :

Topic 1: The Solow-Swan model

Topic 2: The neoclassical model

Topic 3: The overlapping-generation (OLG) model

Topic 4: Growth accounting

Topic 5: Development accounting

Topic 6: Ideas and growth

Topic 7: The expanding variety model

Topic 8: Creative destruction

Topic 9: Fundamental causes of growth

Prerequisites

KECD 2240 - INTRODUCTION TO MATHEMATICS FOR ECONOMICS

Assessment :

• Problem sets 25%
• Midterm exam 25%
• Final exam 25%