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At the end of this course, you should be able to investigate (both theoretically and empirically) the role of factor accumulation and innovation in explaining the income differences across countries using the basic analytical frameworks presented in class. Furthermore, you will learn and assess the role of the fundamental causes of economic growth, namely institutions and geography, on the processes of factor accumulation and innovation.
Specifics
Required background knowledge: Macroeconomics 1 (especially ISLM model, national accounting), Microeconomics 1 (in particular profit maximization under perfect competition, utility maximization) and Mathematics 1 and 2 (in particular calculus, logarithmic differentiation, differential equations).
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We study four main determinants of ongoing income growth, both in theory and in the empirical data. First, we start from the Solow model, in which the rate of capital accumulation, population growth, and technology determine the level of per capita income to which a country converges in the long run. Second, we introduce human capital, to assess the role of education and skilled labor force on per capita income. Third, we study how technological change can drive the long-run growth rate in the economy. Finally, we study what were the important factors behind pre-industrial growth and the transition to modern economic growth in Europe.
We trace the relative importance of the four sources of growth (capital, skills, technology, and natural resources) and the underlying economic institutions over the course of history. We pay special attention to the role of differences in institutions across countries and time periods.
Type of instructions
The main textbook and a couple of articles/chapters are the compulsory readings for this course. All technical parts of the texts (analytical and empirical models) are explained and then interactively discussed in the lecture hours. The cases and histories are partly discussed in class and partly left for own reading. The tutorials are meant to actively interpret the data, work with the models, solve specific problem sets, and interpret results.
Type of exams
Written exam (60%), canvas-tests (20%) and assignments (20%). [The weights apply if the written exam is graded 5 or more out of ten, otherwise the exam counts for 100%. For resits, the exam has a 100% weight. Repeaters face the same grading procedure as new students in the course.]
Compulsory Reading
- Jones, C., Vollrath, D., Introduction to Economic Growth, 3rd edition. WW Norton.
Recommended Reading
- Persson, Carl Gunnar, and Paul Sharp, An Economic History of Europe; Knowledge, Institutions and growth, 600 to the present, Cambridge University Press, 2015, ISBN 978-1-107-47938-8.
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