University at Albany
State University of New York
Economics
803R: Advanced Macroeconomics II
Spring 2009
Section 9672: AS 015; MW 1:15PM-02:35PM
Instructor
John Bailey Jones
BA-113
442-4926
jbjones@albany.edu
http://www.albany.edu/~jbjones/
Office Hours: Tuesday and Thursday, 10:30–12:00; and by appointment
Course Objectives
The goal of this course is to review the literature on
economic growth. Although we will spend most of our time analyzing theoretical
models, we will review the empirical literature as well. We will try to
answer the following three questions:
- Why have the richest
countries enjoyed sustained economic growth for the past 2 centuries?
- Why have some poor
countries been able to catch up with the rich?
- Why have some poor
countries failed to catch up?
Requirements
There will be one in-class midterm, worth 40 percent of
your grade. The date of the midterm will be announced in class. There is
no final exam.
40 percent of your grade will
depend on an original research paper. The proposal for this paper is due on
Monday, April 6, and the paper itself is due on Monday, May 4 (the last day of
class). Unless there are powerful extenuating circumstances, late papers
will not be accepted. The paper does not have to relate directly to the
material covered in class, but it must address a macroeconomics topic.
You can submit the same paper that you are using or have used in other classes,
subject to the other professors' approval – in fact, this is encouraged.
10 percent of your grade will
depend on an in-class presentation. Your task will be to outline and present
the main results of a published article, using slides, in about 15 to 30
minutes.
Finally, there will be several
problem sets, cumulatively worth 10 percent of your grade. Students are
encouraged to work in groups. Each group can hand in a single problem set on
behalf of all its members. Please be sure to list all members of the group on
such joint efforts. The size of such homework groups is limited to three
people.
Texts
A reading list appears below. While the lectures are designed to be
self-contained, you will almost surely find it essential to acquire the
following texts:
- Acemoglu, Daron, 2009, Introduction
to Modern Economic Growth, Princeton, NJ: Princeton University
Press.
- Barro, Robert, and Xavier
Sala-i-Martin, 2003, Economic Growth, Second Edition, Cambridge,
MA: The MIT Press.
Outline
- Introduction
- Stylized facts
- The role of
productivity growth
- The three motivating
questions
- The Neoclassical Growth
Model
- Introduction to
continuous time optimization
- Review of the
neoclassical model
- The convergence
hypothesis: theory and data
- Convex models of
economic growth
- Endogenous Growth Models
with Human Capital Accumulation
- One-sector formulation
- Two-sector formulation
- Endogenous Growth Models
with Innovation
- Models with expanding
product variety
- Quality ladders
- Scale effects
- Growth Miracles
- Small open economies
- Technology diffusion
- Empirical evidence
- Growth Failures
- Barriers to entry
- Institutions
Reading List
Most of the items listed below can be found in the library. In
addition, students can copy my copies. To make this manageable, I will request
that one student borrow and copy the article for the entire class, and that the
borrowed item be returned within 2 days.
Notation: Items identified by the author are one of the texts
listed above. Items marked with a "box" are technical
background readings. Underlined readings are linked to electronic journal
archives.
- Introduction: The Three
Motivating Questions
- Acemoglu, 2009.
Chapters 1 and 3.5.
- Barro and
Sala-i-Martin, 2003. Introduction.
- Jones,
Charles I., 1995, "Time Series Tests of Endogenous Growth
Models," Quarterly Journal of Economics 110(2), pp. 495‑525.
- Parente, Stephen
L., and Edward C. Prescott, 2002, Barriers to Riches, Cambridge,
MA: MIT Press, Chapters 2-4.
- Hall, Robert E., and
Charles I. Jones, 1999, "Why Do Some Countries Produce So Much More
Output Per Worker Than Others," Quarterly Journal of Economics
(114), pp. 83‑116.
- The Neoclassical Growth
Model
- Barro and
Sala-i-Martin, 2003. Chapters 1, 2 and Appendix A.3.
- Blanchard, Olivier
and Stanley Fischer, 1989, Lectures on Macroeconomics, Cambridge,
MA: MIT Press. Chapters 2.1‑2.3.
- Ramsey, Frank P.,
1928, "A Mathematical Theory of Saving," Economic
Journal 38(152), pp. 543‑559.
- Solow, Robert M.,
1956, "A Contribution to the Theory of Economic Growth," Quarterly
Journal of Economics 70(1), pp. 65‑94.
- Acemoglu, 2009.
Chapter 8.
- Acemoglu, 2009.
Chapters 5–7.
- Barro and
Sala-i-Martin, 2003. Chapter 12.
- Mankiw, N.
Gregory, David Romer and David N. Weil, 1992, "A Contribution to the
Empirics of Economic Growth," Quarterly Journal of Economics 107(2),
pp. 407‑437.
- Barro and
Sala-i-Martin, 2003. Chapter 4.
- Acemoglu, 2009.
Chapter 11.
- Jones,
Larry E., and Rodolfo Manuelli, 1997, "The Sources of Growth ,"
Journal of Economic Dynamics and Control 21(1), pp. 75‑114.
- Rebelo, Sergio,
1991, "Long-Run Policy Analysis and Long-Run Growth," Journal
of Political Economy 99(3), pp. 500‑521.
- Jones, Larry E.,
and Rodolfo Manuelli, 1990, "A Convex Model of Equilibrium
Growth: Theory and Policy Implication," Journal of
Political Economy 98(5), pp. 1008‑1038.
- Romer, Paul M.,
1986, "Increasing Returns and Long-Run Growth," Journal of
Political Economy 94(5), pp. 1002‑1037.
- Endogenous Growth Models
with Human Capital Accumulation
- Barro and
Sala-i-Martin, 2003. Chapters 4 and 5.
- Lucas, Robert E., Jr.,
1988, "On the Mechanics of Economic Development," Journal of
Monetary Economics 22(1), pp. 3‑42.
- Acemoglu, 2009.
Chapters 10 and 11.
- Barro and
Sala-i-Martin, 2003. Chapter 12.
- Endogenous Growth Models
with Innovation
- Barro and
Sala-i-Martin, 2003. Chapter 6.
- Acemoglu, 2009.
Chapters 12–13.
- Romer, Paul M.,
1990, "Endogenous Technological Change," Journal of
Political Economy 98(5), part II, pp. S71‑S102.
- Jones, Charles I.,
1995, "R&D-Based Models of Economic Growth," Journal of
Political Economy 103(4), pp. 759‑784.
- Barro and
Sala-i-Martin, 2003. Chapter 7.
- Acemoglu, 2009.
Chapters 12 and 13.
- Grossman, Gene
M., and Elhanan Helpman, 1991, "Quality Ladders in the Theory of
Growth," Review of Economic Studies 58(1), pp. 43‑61.
- Grossman, Gene M.,
and Elhanan Helpman, 1991, Innovation and Growth in the Global
Economy, Cambridge, MA: The MIT Press.
- Aghion, Phillipe and
Peter Howitt, 1999, Endogenous Growth Theory, Cambridge, MA:
MIT Press. Chapters 2, 3 and 12.
- Aghion, Phillipe
and Peter Howitt, 1992, "A Model of Growth through Creative
Destruction," Econometrica 60(2), pp. 323‑351.
- Young, Alwyn,
1993, "Substitution and Complementarity in Endogenous
Innovation," Quarterly Journal of Economics 108(3),
pp. 775‑807.
- Unnikrishnan Pillai, 2009.
“Technological Progress in the Microprocessor Industry: Explanations of the Acceleration
in 1990-2000 and the Slowdown in 2001-2008,” mimeo, University at
Albany.
- Growth Miracles
- Young, Alwyn,
1995, "The Tyranny of Numbers: Confronting the Statistical Reality
of the East Asian Growth Experience," Quarterly Journal of
Economics 110, pp. 641‑680.
- Hsieh, Chang-Tai,
2002, "What Explains the Industrial Revolution in East Asia?
Evidence from the Factor Markets," American Economic Review
92(3), 502‑526.
- King, Robert and Sergio
Rebelo, 1993, “Transitional Dynamics and Economic Growth in the
Neoclassical Model,” American Economic Review 83(4), pp. 908-931.
- Blanchard, Olivier and
Stanley Fischer, 1989, Lectures on Macroeconomics, Cambridge,
MA: MIT Press. Chapter 2.4.
- Lin, Ching-yuan, 1988,
“East Asia and Latin America as Contrasting Models,” Economic
Development and Cultural Change, 36(3), pp. S153- S197.
- Booth,
Anne, 1999, “Initial Conditions
and Miraculous Growth: Why is South East Asia Different From Taiwan and South Korea?”, World Development 27(2), pp.
301-321.
- Barro and
Sala-i-Martin, 2003. Chapters 3 and 8.
- Acemoglu, 2009.
Chapters 18 and 19.
- Helpman, Elhanan,
1993, "Innovation, Imitation and Intellectual Property Rights,"
Econometrica, 61(6), pp. 1247‑1280.
- Parente, Stephen
L., and Edward C. Prescott, 1994, "Barriers to Technology Adoption
and Development," Journal of Political Economy 102(2),
pp. 298‑321.
- Lucas, Robert E.,
Jr., 1993, "Making a Miracle," Econometrica 61(2),
pp. 251‑272.
- Growth Failures
- Acemoglu, 2009.
Chapter 4.
- Hall, Robert E., and
Charles I. Jones, 1999, "Why Do Some Countries Produce So Much More
Output Per Worker Than Others," Quarterly Journal of Economics
(114), pp. 83‑116.
- Guest, Robert, 2004, The
Shackled Continent: Power, Corruption, and African Lives,
HarperCollins Publishers.
- "The
Road to Hell is Unpaved," The Economist, December 19,
2002.
- Lahiri, Amartya
and Kei-Mu Yi, 2007, "A Tale of Two States: Maharashtra and West
Bengal," mimeo.
- Parente, Stephen
L., and Edward C. Prescott, 1999, "Monopoly Rights: A Barrier
to Riches," American Economic Review, 89(5), pp. 1216‑1233.
- Parente, Stephen
L., and Edward C. Prescott, 2002, Barriers to Riches,
Cambridge, MA: MIT Press.
- Parente, Stephen
L., and Edward C. Prescott, 1994, "Barriers to Technology Adoption
and Development," Journal of Political Economy 102(2),
pp. 298‑321.
- Acemoglu, 2009.
Chapters 22 and 23.
- Acemoglu, Daron, and
James M. Robinson, 2006, Economic Origins of Dictatorship and
Democracy, New York: Cambridge University Press.
- You will also find it
useful to survey the ongoing – if often non-scientific – debate about
development aid: A
nice sample can be found on William Easterly's web page.
- Easterly, William R.,
2002, The Elusive Quest for Growth: Economists' Adventures and
Misadventures in the Tropics, Cambridge, MA: The MIT Press.
- Easterly, William R.,
2007, The White Man's Burden: Why the West's Efforts to Aid the Rest
Have Done So Much Ill and So Little Good, The Penguin Press.
- Sachs, Jeffrey, 2005,
The End of Poverty, The Penguin Press.