Economic Dynamics

Abstract

Overview of economic growth theory; study of some standard growth models; discuss important issues related to economic development.

Objective

Why is it that, in modern times, some countries are extremely poor while others are fairly rich? Why has the standard of living been increasing by a factor of about 6 during the last 100 years in most of OECD economies? These are the staggering questions which are at the center of economic growth theory. Generations of economists found it fascinating to think about the causes (and sometimes also about the consequences) of economic growth. This fascination has been expressed by Lucas (JME, 1988, p. 5) who stated that once one starts to think about economic growth, it is hard to think about anything else. Modern growth theory is characterized by an extensive use of formal concepts, methods and models. This course, among other things, aims at demonstrating how these models can be used to tackle the issues raised above. Specifically, there are three main objectives: (1) An overview of the theory of economic growth is provided (the models discussed are listed below); (2) it is shown how economic growth models are usually set up; (3) we will use economic growth.

Content

PART I 1. Introduction 2. Basic Concepts and Methods PART II 3. The Neoclassical Growth Model 3.1. The Solow Model 3.2. The Ramsey Model 4. Endogenous Growth 4.1. AK-type Growth Models 4.2. Human-Capital based Growth 4.3. R&D-based Growth PART III 5. Government Policy and Corruption 6. The Importance of Institutions 7. Globalization and Growth

Resources