Topics in Growth and Development

Economics 325

Bard College

Spring 2006

INstructor: / Tamar Khitarishvili
Office: / Albee 211
Telephone: / x 6141
E-mail: /
Office hours: / Tuesdays 4:00 – 5:30pm
Thursdays 10:00 – 11:30am
Class meeting times: / Monday and Wednesday
3:00 – 4:20
Class location: / Olin 310

Description

This course introduces students to the theoretical modeling of determinants of economic growth and development. It presents a synthesis of recent and older literature on economic growth, income and asset inequality, poverty and undernutrition, population growth, international trade, and the markets for land, labor and credit. The analyzed models will be supplemented with empirical evidence from around the world.

Prerequisites: ECON 201 or permission of the instructor.

SYLLABUS AVAILABLE AT inside.bard.edu/~khitaris/TopicsSyllabus.doc

Readings

Required textbook:

Debraj Ray (1998) “Development Economics,” Princeton University Press.

Additional texts (on reserve):

William Easterly (2001) “The Elusive Quest for Growth: Economists’ Adventures and

Misadventures in Tropics,” MIT Press.

Hernando de Soto (2000) “The Mystery of Capital: Why Capitalism Triumphs in the

West and Fails Everywhere Else,” Basic Books Publishing.

Charles I. Jones (1998) “Introduction to Economic Growth,” W.W. Norton and

Company.

We will also use a number of classic and contemporary articles to supplement the material.

Grading

Your grade in this course will be based on your performance on exams, assignments, papers, and your class participation. Here is the breakdown of the final grade:

Midterm Exam / 20%
Final Exam / 20%
Assignments / 30%
Paper / 20%
Class Participation / 10%
Total / 100%

ASSIGNMENTS

The details on all the assignments will be provided as we move along.

Here is the tentative assignment schedule:

Due date
Assignment 1 / Wednesday, February 8
Assignment 2 / Wednesday, February 22
Assignment 3 / Wednesday, March 8
Assignment 4 / Wednesday, April 12
Assignment 5 / Wednesday, May 3

Paper

The objective of the paper is to analyze a particular theoretical issue and to assess its validity using empirical evidence. You could, for instance, extend a model covered in class by considering potentially missing elements. I will provide you with further details on the potential topics, the structure of the paper and on the research strategies in a separate assignment sheet.

Here are the due dates for different stages of working on the paper:

Due date
Paper topic
(set up a meeting with me this week to discuss it) / Monday, March 13
First draft
(set up a meeting with me this week to discuss it) / Monday, April 17
Return your comments to each other / Wednesday, April 26
Final paper / Wednesday, May 10

CLASS PARTICIPATION

Class participation is a crucial component of this course. I strongly encourage you to get engaged. I will also occasionally ask you to provide your responses to the readings for that day. These responses will also count towards class participation.

Academic Misconduct

Any act of academic dishonesty or misconduct will be referred to the Office of the Dean. For further information, see the section "Plagiarism and Academic Honesty" in Academic Requirements and Program Guide, 2005-2006.

Attendance

Regular attendance and participation are both important, emphasized by the fact that class participation is given 10% of the final class grade.

Tentative Course Outline

The following is a tentative course outline. Depending on the pace of the course and student desire, we may exclude some topics and include others.

Day / Date / Comments
WEEK 1: Introductions
Ray, ch. 1
Wednesday / January 25 / Ch. 1
WEEK 2: Some facts about development
Ray, ch. 2

Angus Maddison (2005) “Measuring and Interpreting World Economic Performance 1500-2001,” Review of Income and Wealth, 51(1), March, pp. 1-35.

also available at http://apseg.anu.edu.au/pdf/edges/Maddison.pdf
Monday / January 30 / Ch. 2.1 – 2.4 and Maddison with particular focus on pages 1 – 17 in the working paper version (Parts I and II); section III is extremely interesting, too.
Wednesday / February 1 / Ch. 2.5
WEEK 3: Harrod Domar model
Ray, ch. 3.1, 3.2, 3.3.1, 3.3.2
Monday / February 6 / 3.1 – 3.3.1
Wednesday / February 8 / 3.3.2
Assignment 1 Due
WEEK 4: Solow Model
Robert M. Solow (1956) “A Contribution to the Theory of Economic Growth,” Quarterly Journal of Economics, 70(1), Feb, pp. 65-94.
Ray, ch. 3.3.3, 3.4
Monday / February 13 / 3.3.3. and Solow
Wednesday / February 15 /

3.3.4

WEEK 5: Solow Model (cont’d)
Ray, ch. 3.5
Easterly, ch. 3
Monday / February 20 / 3.5.1 – 3.5.5 and Easterly
Wednesday / February 22 / 3.5.6 – 3.6
Assignment 2 Due
WEEK 6: More on capital and its accumulation
De Soto, chs. 1, 2, and 3
Human capital and Education
Ray, ch. 4.1 and 4.2
Mankiw, N.G., P.Romer and D. Weil (1992) “A Contribution to the Empirics of Economic Growth,” Quarterly Journal of Economics, 107, pp. 407 – 438.
Easterly, ch. 4
Monday / February 27 / De Soto
Wednesday / March 1 / 4.1, 4.2. and Romer
WEEK 7: Human capital and Education (cont’d)
Ray, 4.3
Easterly, ch. 4
Monday / March 6 /

4.3 and Easterly

Wednesday / March 8 /

4.3 and Easterly

Assignment 3 Due

WEEK 8: Population Growth
Ray, ch. 9
Easterly, ch. 5
Monday / March 13 / 9.1 – 9.3.2 and Easterly
Paper Topics Due

Set up a meeting with me to discuss your paper topic

Wednesday / March 15 / 9.3.3 – 9.3.4
WEEK 9: Population Growth (cont’d)
Ray, ch. 9
Monday / March 20 /

Midterm Exam

Wednesday / March 22 / 9.4 – 9.5
WEEK 10
Monday / March 27 /

Spring Recess

Wednesday / March 29 / Spring Recess
WEEK 11: Technology
Ray, ch. 4.4
Romer, P. (1990) “Endogenous Technological Change,” Journal of Political Economy, 98, pp. S71 – S101. available at http://inside.bard.edu/~khitaris/Romer90.pdf
Easterly, ch. 9
CBO (2005) “R&D and Productivity Growth: A Background Paper,” Congressional Budget Office, June. available at http://www.cbo.gov/ftpdocs/64xx/doc6482/06-17-R-D.pdf
SUPPLEMENTARY
Romer, P. (1986) “Increasing Returns and Long-Run Growth,” Journal of Political Economy, 94, pp. 1002 – 1037. available at http://inside.bard.edu/~khitaris/Romer86.pdf
Monday / April 3 / 4.4.1 – 4.4.3 and Romer (1990)
Wednesday / April 5 / 4.4.4. and CBO and Easterly
WEEK 12: Does History Matter?
Ray, ch. 4.4.5, 4.5 (possibly) and 5
Easterly, ch. 8
Kenneth Arrow (2005) “Path Dependence and Competitive Equilibrium,” in History matters : essays on economic growth, technology, and demographic change, edited by Timothy W. Guinnane, William A. Sundstrom, and Warren Whatley (Connect NY)
Monday / April 10 / 5.1 – 5.2. and Easterly
Wednesday / April 12 / 5.3 – 5.6 and Arrow
Assignment 4 Due
WEEK 13: Institutions

Personal to Impersonal Exchange

Avner Greif (2002) “Institutions and Impersonal Exchange: From Communal to Individual Responsibility,” Journal of Institutional and Theoretical Economics, 158(1) pp. 168-204.
working paper version available at
http://www-econ.stanford.edu/faculty/greif-Ireland/Inst-Impersonal.pdf

Testing models using economic history

“Modeling the Middle Ages: The History and Theory of England’s Economic Development” John Hatcher and Mark Bailey, Oxford University Press, 2001 (Connect NY)
Sokoloff, Kenneth L., and Stanley L. Engermann (2000) “Institutions, Factor Endowments, and Paths of Development in the New World,” Journal of Economic Perspectives, 14(3), Summer, pp. 217 – 232. available at http://inside.bard.edu/~khitaris/SokoloffEngermann.pdf
Monday / April 17 / Greif
First Paper Draft Due
Set up a meeting with me to discuss the draft
Wednesday / April 19 / Hatcher and Bailey, and Sokoloff and Engermann
WEEK 14: Property Rights
Ross Levine (2005) “Law, Endowments and Property Rights,” Journal of Economic Perspectives, 19(3) Summer, pp. 61 – 88. available at http://inside.bard.edu/~khitaris/Levine.pdf
De Soto, ch. 6
OPTIONAL
Stiglitz, Joseph and Karla Hoff (2005) “The creation of the rule of law and the legitimacy of property rights: the political and economic consequences of a corrupt privatization,” NBER Working Paper Series # 11772.
available at http://www.nber.org/papers/w11772.pdf
Monday / April 24 / Levine
Wednesday / April 26 /

de Soto

Return your paper comments to each other

WEEK 15: Economic Inequality
Ray, chs. 6 and 7
Bhalla, Surjit (2002) “Imagine there's no country: Poverty, inequality, and growth in the era of globalization,” Institute of International Economics, chs. 3 and 11
Monday / May 1 / Ch. 6 and Bhalla both chapters
Wednesday / May 3 / Ch. 7.1 – 7.2.5
Assignment 5 Due
WEEK 16: Economic Inequality (cont’d)
Ray, ch. 7
Poverty
Bhalla, Surjit (2002) “Imagine there's no country: Poverty, inequality, and growth in the era of globalization,” Institute of International Economics, chs. 4 and 9
OPTIONAL
Ray, ch. 8
Deaton, A. (2005) “Measuring Poverty in a Growing World (or Measuring Growth in a Poor World), Review of Economics and Statistics, 87(1), February, pp 1-19 available at http://inside.bard.edu/~khitaris/Deaton.pdf
Monday / May 8 / 7.2.6 – 7.2.9 and 7.3
Wednesday / May 10 / Bhalla, both chapters
Final Paper Due
WEEK 17
Monday / May 15 /