ECONOMIC GROWTH AND INNOVATION
Learning outcomes of the course unit
1) Knowledge and applied knowledge. This course enables students to improve their knowledge of the causes and consequences of economic growth, and of their potential application to actual data.
2) Judgmental skills. This course will improve the judgment skills necessary to understand the effects of globalization and Government on growth necessary to put in practice the pieces of knowledge more amenable to empirical applications
3) Making judgements. The course will foster student's ability to integrate knowledge and handle complexity, and formulate judgements regarding the mechanism driving the dynamics of economic growth and
the change in standards of living.
4) Communications skill. Students will have the ability to communicate
their judgements with the help of proper definitions and by selecting suitable diagrams and charts for assessing economic growth.
5) Learning skills. Students will be stimulated to make use of critical-thinking abilities when they analyze economic growth scenarios.
Familiarity with some basic concepts of Macroeconomics and Microeconomics (Gdp, marginal productivity of a factor, returns to scale)
Course contents summary
This course focuses on the standard neoclassical growth model to study the determinants of economic growth. It does so by providing the tools and the occasion to coherently and practically think about such topics as: Why do growth rates differ across countries and over time? How do we measure the growth contribution of physical and human capital? Is globalization bad or good for growth? Does “big Government” hinder growth?
This course employs the standard neoclassical growth model to study the determinants of economic growth. It does so by providing the tools and the occasion to coherently and practically think about such topics as: Why do growth rates differ across countries and over time? How do we measure the growth contribution of physical and human capital? Is globalization bad or good for growth? Does “big Government” hinder growth?1. The facts of growth In this part we will introduce the 2 main important questions for the course: why do countries differ in their standards of living? And why do countries grow richer or fail to grow richer over time? As discussed in chapters 1 and 2 of the textbook, in order to analyze these issues we need to work with a combination of theoretical reasoning and the examination of data.
2. The Solow model and population growth
In this part we will discuss the contents of chapter 3. In particular, we will study the Solow model: a capital-based theoretical framework to explain why countries differ in their levels of income. Such a simple model is not able to explore all of the phenomena we observe, but it is instructive to see how far the theory can take us.3. The Solow model extendedIn this part we will consider how population growth can be incorporated into the Solow model. In particular, we will discuss how the Solow model can be extended to take more phenomena into account. The topics of this section are discussed in chapters 4 and 5 in the textbook.4. Human capital In this section, we will discuss the idea that differences in the quality of workers are one possible explanation for differences in income among countries. This is the main topic of chapter 6 in the textbook.
5. Productivity growth and efficiencyProductivity is the effectiveness with which factors of production are converted into output. In this part we will explore the nature of productivity and how it is measured (chapter 7 in the textbook). In particular, we will focus on 2 techniques, called development accounting and growth accounting. Efficiency (chapter 10) is the effectiveness with which factors of production and technology are combined to produce output. In this section we will explore the concept of efficiency, asking whether we can find any direct evidence of efficiency differences among countries.6. Globalization and growth During the course, we have studied the accumulation of physical and human capital, population growth, and the efficiency of production, assuming that our economy was closed off from the rest of the world. This assumption will be removed in the discussion in this part (as in the chapter 11 of the textbook), and we will ask the following questions: how does being open to the world economy affect a country’s economic growth? And, what are the particular channels through which openness affects growth?7. Government and growthGovernment activity can be associated with all of the determinants of economic growth that we have examined during the course. In this part we will discuss both normative and positive analyses of government behavior in an economy (chapter 12 in the textbook).
David Weil, Economic Growth, 2011.
Standard classes. Also class discussions on topics of interest.
Assessment methods and criteria
Final written exam (up to 25 pts for knowledge; up to 10 pts for judgment skills).