Dynamic Macroeconomics, Innovation and Growth

Abstract

Introducing dynamic models and workhorses in macroeconomics, understanding the role of innovation and institutions for economic development and discussing policies to foster innovation and economic growth.

Objective

After the course, students will be familiar with dynamic general equilibrium theory and the basic workhorse models in macroeconomics. Participants will be able to apply the frameworks to interesting issues, such as innovation and growth. Moreover, students will understand how the world has developed over the last centuries and the proximate and fundamental causes of innovation and economic growth. Students will understand and apply the basic models of economic growth and will be able to identify policies to foster innovation and growth and to reduce the large wealth differences in the world.

Content

This course is designed for Master’s students in economics or related disciplines with a solid foundation in microeconomics, macroeconomics, and calculus. It is particularly suited for those interested in long-run macroeconomic dynamics, development economics, and the theoretical foundations of growth-oriented policy. Students will develop a rigorous understanding of modern growth theory, gaining analytical tools to examine why some countries grow richer than others, how innovation drives productivity, and what role institutions and policies play in shaping long-term outcomes. The course links formal modeling with real-world relevance. We begin with an introduction to the field and the Solow model as a benchmark. We then cover the neoclassical growth model with mathematical underpinnings, before examining models of technological progress, including Romer’s learning-by-doing and expanding varieties, as well as Aghion & Howitt’s Schumpeterian growth framework. The final sessions focus on growth policies and fundamental drivers of development.

Resources