Barcelona Macroeconomics Summer School 2009.

ECONOMIC GROWTH AND DEVELOPMENT I:

Professor Xavier Sala-i-Martin

 

CLASS SCHEDULE (TWO -HOUR CLASSES)

CLASS 1: Introduction: Growth and the World Distribution of Income. Poverty and Inequality. 

      (a) Individual Income

      (b) Poverty Rates

      (c) Income Inequality

      (e) The Importance of Growth

·         Bourguignon, F. and C. Morrisson, C., (2002) , "Inequality Among World Citizens: 1820-1992", American Economic Review.

·         Chen, Shaohua, and Martin Ravallion, “How Did the World’s Poorest Fare in the 1990s?” World Bank Working Paper 2409 (Washington: World Bank, 2002)

·         Deaton, Angus, “Measuring Poverty in a Growing World,” NBER Working Paper 9822 (Cambridge, Massachusetts: National Bureau of Economic Research, 2003).

·         Jones, C. I., "On the Evolution of the World Income Distribution", Journal of Economic Perspectives, Summer 1997

·         Kremer, M., A. Onaski, and J. Stock, "Searching for Prosperity", NBER WP, April 2001.

·         Quah, D. "Empirics for Growth and Distribution: Polarization, Stratification, and Convergence Clubs", Journal of Economic Growth, 2, 1997.

·         Quah, D. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics", Economic Journal, July 1996.

·         Sala-i-Martin, X. "The World Distribution of Income: Falling Poverty... and Convergence, Period", Quarterly Journal of Economics, Vol. 121, No. 2: 351-397, May 2006

·         Sala-i-Martin, X and Maxim Pinkovskiy (2008), "Parametric Income Distributions" mimeo Columbia University

·         UNDP-Human Development Report, 2003. http://www.undp.org/hdr2003/

·         Powerpoint Presentation

(Version PPT97_2003)

·         PLAY with Distributions

·          

More Play (Gapminder)

 

CLASS 2: Aid, Solow, and Poverty Traps:

        (a)  The Basic Model: From Solow to Traps

·          BX  Chapter 1.

·          Blair, Tony. "Our Common Interest: Report of UK's Commission for Africa", March 2005. 

·         Economics, May 1991, vol 106, pp. 617-650.

·             Murphy, K. A. Shleifer, and R. Vishny, "Industrialization and the Big Push", Journal of Political Economy, vol 97. October 1989, 1003-1002

·             Sachs, Jeffrey D., John W. McArthur, Guido Schmidt-Traub, Margaret Kruk, Chandrika Bahadur, Michael Faye, and Gordon McCord.  "Ending Africa's Poverty Trap." Brookings Papers on Economic Activity.  2004:1 [Download article as PDF].

·             Sachs, Jeffrey et al. Investing in Development: A Practical Plan to Achieve the Millennium Development Goals, UN Millennium Project,  Earthscan: New York, 2005.

·          PPT Lectures 2 and 3 (Version PPT1997)

(b) Aid Effectiveness: The Evidence

·         (*) Burnside, Craig, and David Dollar,2000, “Aid, Policies and Growth” American Economic Review, Vol. 90, No. 4, pp. 847–868.

·         Blair, Tony, 2005, "Our Common Interest: Report of UK's Commission for Africa".

·         Boone, Peter (1994), “The Impact of Foreign Aid on Savings and Growth”, LSE working paper 677.

·         Clemens, Michael, Steven Radelet and Rikhil Bhavnani (2004) “Counting Chickens before they Hatch: The Short Term Effect of Aid on Growth”, mimeo CGD.Duflo, Esther, (2004) "Scaling Up and Evaluation", Annual, Bank Conference on Development Economics, The World Bank

·         Dreher, Axel, Peter Nunnenkamp, and Rainer Thiele (2007), “Does Aid for Education Educate Children: Evidence from Panel Data”, mimeo January.

·         Easterly, William, 2002, "The Elusive Quest for Growth" (MIT Press)

·         (*) Easterly, William, 2003, "Can Foreign Aid Buy Growth?", Journal of Economic Perspectives, Vol 17, No.3, pp. 23–48.

·         Easterly, William, 2005. "Reliving the 50s: the Big Push, Poverty Traps, and Takeoffs in Economic Development" DRI Working Paper No. 15 (June).

·         Easterly, William, 2005, "The Utopian Nightmare" Foreign Policy (September/October).

·         Easterly, William, 2006, The White Man’s Burden (New York, NY: The Penguin Press). Hansen, Henrik and Finn Tarp (2001), “Aid and Growth Regressions”, Journal of Development Economics, 64(2), pp547-70.

·         Michaelowa, Katharina, and Anke Weber (2006), “Aid Effectiveness Reconsidered: Panel Data Evidence for the Education Sector, Hamburg Institute for International Economics discussion paper 264.

·         Mishra, Prachi and David Newhouse (2007), “Health, Aid, and Infant Mortality”, IMF Working Paper 07/100, April 2007

·         (*) Rajan, Raghuram and Arvind Subramanian, 2005a, "Aid and Growth: What Does the Cross-Country Evidence Really Show?" IMF Working Paper 05/127 (Washington: International Monetary Fund) 

·         Rajan, Raghuram and Arvind Subramanian, 2005b, “What Determines Aid’s Impact on Growth?”, paper presented at the IMF Research Department conference “Trade and Growth,” Washington, January.

·         Rodman, David (2007) “The Anarchy of Numbers: Aid, Development, and Cross Country Empirics”, CGD Working paper 32.

·         Rodman, David, (2007) “Macro Aid Effectiveness Research: A Guide for the perplexed”

·         Sachs, Jeffrey and others, 2004, "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Brookings Institution.

·         Sachs, Jeffrey, 2005, “The End of Poverty”, The Earth Institute, Columbia University, New York

·         PPT Presentation

Class 3 Aid Effectiveness.

(a) Why May Aid be Ineffective?

(b) What to do? Randomized Field Trials

·          Ashraf, Nava, Dean Karlan, and Xavier Giné (2008), “Finding Missing Markets”, mimeo Harvard Business School.

·          Cohen, Jessica and Pascaline Dupas (2007), “Free Distribution or Cost-Sharing? Evidence from a Malaria Prevention Experiment in Kenya”, PAL Working pape

·          Duflo, Esther (2006), "Field Experiments in Development Economics", Poverty Action Lab, MIT

·          Duflo, Esther and Hannah (2006), “Holding Teachers Accountable: Evidence From a Randomized Evaluation in India”, PAL working paper

·          Duflo, Esther, and Michael Kremer (2003), "Use of Randomization in the Evaluation of Development Effectiveness", PovertyAction Lab.

·          Duflo, Esther, Rachel Glennerster, and Michael Kremer,  (2006), “Using Randomization in Development Economics Research: A Toolkit”, mimeo Poverty Lab

·          Duflo, Esther, Pascaline Dupas, Michael Kremer, and Samuel Sinei (2006)” Education and HIV/AIDS Prevention: Evidence from a randomized evaluation in Western Kenya”, mimeo Poverty Lab

·          Gertler, Boyce (2001) @progressa@

·          Karlan, Dean and Xavier Giné (2008), “Peer Monitoring and Enforcement: Long Term Evidence from Microcredit Lending Groups with and without”, Mimeo Yale University

·          Group Liability,” joint with Xavier Gine, January 2008

·          Karlan and Valdivie (2006), “Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions” Mimeo Poverty Lab.

·          Kremer, Michael and Edward Miguel, (2004), “Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities,” Econometrica 72(1): 159-217.”

     CLASS 4: (Time depending) Incentives to Save and Invest. Taxation and the Welfare State.

        (a) The Euler Equation

        (b) Public Spending and Taxation

        (c) Inequality and Growth

Readings:

·         Barro and Sala-i-Martin, Economic Growth Chapters 2 and 4

·         Barro, Robert "Inequality and Growth in a Panel of Countries", Journal of Economic Growth 2000

·         Sala-i-Martin, Xavier (1997), "Transfers, Social Safety Nets, and Growth". IMF Staff Papers, vol. 44, No 1, pp.81-102, 1997.

Day 4

a.    The Economics of Ideas.

·         R&D and Growth.

·         Intellectual property rights.

·         International protection of International Property Rights.

·         The Tragedy of Africa: Malaria, Tuberculosis, and AIDS. Human and Economic Costs.

·         Vaccines: South Africa vs. Pharmaceutical Industry.

 

Readings:

o    Economic Growth, Chapters 6, 7, and 8.

o    Kremer, Michael, 2001a, “Creating Markets for New Vaccines: Part I: Rationale,” in Innovation Policy and the Economy, Vol. 1, ed. by Adam B. Jaffe, Josh Lerner, and Scott Stern (MIT Press).

o    ———, 2001b, “Creating Markets for New Vaccines: Part II: Design Issues,” in Innovation Policy and the Economy, Vol. 1, ed. by Adam B. Jaffe, Josh Lerner, and Scott Stern (MIT Press).

o    Sachs, Jeffrey D., 2001, “Macroeconomics and Health: Investing in Health for Economic Development,” report of the Commission on Macroeconomics and Health, World Health Organization.

Health and Aid PPT

R&D Model of Growth PPT 

Day 5

a.    The Empirics of Growth:

 

·         Cross-Country Growth Regressions: the robustness debate.

 

Readings:

o    Economic Growth, Chapter 12.

o    Levine, Ross, and David Renelt, 1992, “A Sensitivity Analysis of Cross-Country Growth Regressions,” American Economic Review, Vol. 82 (September), pp. 942–63.

o    Sala-i-Martin, Xavier, Gernot Doppelhoffer, and Robert Miller, 2004, “Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach,” American Economic Review, Vol. 94, No. 4, pp. 813–35.

 PPT Presentation

 

b.    Africa

 

Readings:

 

o    Arunga, June, and Billy Kahora, 2007, “The Cell Phone Revolution in Kenya” (London: International Policy Network; Milan: Istituto Bruno Leoni).

o    Collier, Paul, 2007, “The Bottom Billion: Why are the Poorest Countries Failing and What Can Be Done About It” (Oxford University Press).

o    ———, and Jan Willem Gunning, 1999, "Why Has Africa Grown Slowly?" Journal of Economic Perspectives, Vol. 13, No. 3 (Summer), pp. 3–22.

o    Easterly, William, 2002, "The Elusive Quest for Growth" (MIT Press).

o    Njinkeu, Dominique, Benno Ndulu, Stephen A. O'Connell, and Robert H. Bates “The Political Economy of Economic Growth in Africa, 1960-2000” (Cambridge University Press).

o    Sala-i-Martin, Xavier, and Arvind Subramanian, 2003, “Addressing the Natural Resource Curse: An Illustration from Nigeria,” University of Pompeu Fabra Working Paper No. 685.

o    Powerpoint Presentation.