Development Economics: Macroeconomic Approach

Tentative Schedule 1. Overview of Stylized Facts i. This part briefly overviews the stylized facts of economic growth (the large disparities in output per capita across countries, evolution of the world income distribution) 2. Solow Model and Neo-Classical Growth Model (NGM) i.Here, I teach the most basic and fundamental macroeconomic model for economic growth. ii.You will learn basic properties of the model and methods for dynamic models. 3.Simple Endogenous Growth Models (AK type models) i.This part modifies the NGM to endogenize the economic growth rate. ii.You will learn functional form of production play key roles 4.Structural Change i.Structural change here refers to the reallocation of resources across the broad economic sectors agriculture, manufacturing, and services. We consider the extension of the Neo-Classical Growth model to explain the structural change. 5.Technological Progress (R&D) i.This part overviews models of R&D where technology is endogenously improved. 6.Firm dynamics, allocation, and growth i.This part shows you that creative destruction and firm competition is another factor that drives economic growth. Market power, allocation of resource are also key in this class of models. 7.Directed Technological Progress

I will use slides Also, I plan to hand out some problem sets which are for preparation for the exam, and I do not evaluate them.

Final Exam (but in case the enrollment is very small, I may replace it with student presentation)

Reference 1.Acemoglu, D. (2008). Introduction to modern economic growth. Princeton university press. 2. Aghion, P., & Howitt, P. W. (2008). The economics of growth. MIT press. 3. Barro, R., & Sala-i-Martin, X. (2004). Economic growth.　The MIT Press.

Other survey papers relevant to the course 1. Aghion, P., Akcigit, U., & Howitt, P. (2014). What do we learn from Schumpeterian growth theory?. Handbook of economic growth (Vol. 2, pp. 515-563). Elsevier. 2. Buera, F. J., Kaboski, J. P., & Shin, Y. (2015). Entrepreneurship and financial frictions: A macrodevelopment perspective. economics, Annual Review of Economics, 7(1), 409-436. 3 Jones, C. I. (2016). The facts of economic growth. Handbook of Macroeconomics (Vol. 2, pp. 3-69). Elsevier. 4. Herrendorf, B., Rogerson, R., & Valentinyi, A. (2014). Growth and structural transformation. Handbook of economic growth, 2, 855-941.

A prerequisite is understanding Macroeconomics at GraSPP or equivalent. I will start with a review of the introduction to dynamic economics (e.g., Solow model, dynamic optimization)