Growth and Development WS 19/20  

Growth and Development: Theory

Lecturer: Prof. Dr. Thomas Steger
Dates: Tuesday, 9.15 - 10.45 a.m. (SR 8), Thursday, 9.15 - 10.45 a.m. (SR 7)
Start: October 15, 2018
Credits: 10 ECTS
Language: English


I. Introduction (pdf)
Global income distribution, Within-country inequality, Human development index, Poverty rates

Country snapshots (World Development Indicators)
Country snapshots (Charles Jones)
Human development index (United Nations Development Programme)

- Ray, Debraj: Development Economics, Princeton University Press, 1998 (Ch. 2).
- Weil, David: Economic Growth, Routledge, 2016 (Ch. 1).
- Milanovic, Branko, Global income inequality by the numbers: in history and now -- an overview, Policy Research Working Paper, World Bank, 2012.

II. Economic Growth
(pdf1, pdf2)
Solow Model, Convergence Debate, Human capital

Digression I: The World Bank Long Term Growth Model
Projects: Country specific growth & development projections
Digression II: Uneven Growth (Ray)

Barro, R. J. & X. Sala-i-Martin, Economic Growth, MIT Press, 2003, Ch. 2.
- Jones, C. & D. Vollraths, Introduction to Economic Growth, Norton, 2013 (Ch. 2 & 3).

III. Poverty Traps
Solow model under concave / convex production technology, Multiple equilibria in 2 sector economy

Digression: Poverty traps versus very slow convergence (Steger, 2000)

- Barro , R. J.and X. Sala-i-Martin, Economic Growth, MIT Press, 2004 (Ch. 1.4.2).
- Bryan S. Graham and Jonathan R. W. Temple, Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?, Journal of Economic Growth, 2006, 5-41.
- Kraay, A., & McKenzie, D. (2014). Do poverty traps exist? Assessing the evidence. The Journal of Economic Perspectives, 28, 127-148.

IV. Inequality
Human capital investment under imperfect capital markets, Application of Basic Aiyagari model to DCs

The World Inequality Database
The Aiyagari Model (simple intro)

Projects: Country specific discussion of inequality patterns; discussion of Galor / Zeira model and relevance for DCs, discussion of basic Aiyagari model and relevance for DCs

- Galor, O. and Zeira, J. (1993): Income Distribution and Macroeconomics. The Review of Economic Studies, Vol. 60, No. 1, 33-52.
- See also: Bertola, G., Foellmi, R., and Zweimüller, J.: Income Distribution in Macroeconomic Models, PUP, 2006 (Ch. 7.2).
- Torul, Orhan & Oğuz Öztunalı, On income and wealth inequality in Turkey, Central Bank Review, Vol. 18, 2018, 95-106.

V. Institutions & Policy
Imperfect Property Rights (data & model), Costs of Doing Business (data & model)

Rankings & Ease of Doing Business
Econtalk: Simeon Djankov - Doing Business Report and Development Aid

- Gonzalez, F.M., Effective property rights, conflict and growth, Journal of Economic Theory, November 2007, 127-139.
- Jones, C. and R. Hall, Why Do Some Countries Produce So Much More Output per Worker than Others? Quarterly Journal of Economics, 1999, pp. 83-116.

VI. Development Aid
Washington Consensus; Unconventional Development Aid (Charter Cities, Romer); Insights from Experimental Approach

Romer, Paul M., “Technologies, Rules, and Progress: The Case for Charter Cities,” Center for Global Development Essay, March (2010).
Schaefer, A. & T: Steger, Journey into the Unknown? Economic Consequences of Factor Market Integration under Increasing Returns to Scale, Review of International Economics, 2014, Vol. 22 (4), 783–807
The Prize in Economic Sciences 2019: Scientific Background

Digression: Why doesn't Capital Flow to from Rich to Poor Countries? (Lucas, 1990)

letzte Änderung: 23.01.2020