Economic Growth and Development

Course content

 

Why are some countries rich and other countries poor? Why have Singapore, Taiwan and South Korea had annual growth rates well above 5 per cent per year during the last 50 years while many sub-Saharan African countries are not growing at all? What is the engine of economic growth? Why have some countriers benefitted from the technological development while others lag far behind? These are some extremely important and interesting - but also very complex - questions.

The economic development of a country may be influenced by many different factors. Therefore, for economists, seeking answers to these questions requires a formalised framework where the various mechanisms can be traced and analysed. During this course the students are introduced to such formalised theoretical frameworks: the original model of exogenous technological progress by Robert Solow and extensions of that model including optimizing households and human capital. Further, the model of endogenous long-run growth by Paul M. Romer is covered together with Charles I. Jones' semi-endogenous version of the model and some of Grossman and Helpmans open economy extensions.

Since economic theories are usually described mathematically, learning growth theory requires the students to use mathematical tools such as differentiation, differential equations and dynamic optimization. If necessary, adequate texts on these issues will be distributed during the course but the focus of the course is on economics instead of math.

The students will be actively involved in developing the theoretical frameworks and using them for policy analyses or small modifications. They will also become familiar with existing empirical evidence that is relevant for evaluating the theoretical frameworks.

 

Education

MSc Programme in Agricultural Economics
MSc Programme in Environmental and Natural Resource Economics

Learning outcome

The main objective of the course is to introduce formalised frameworks for analysing questions of income differences, differences in the rate of income growth and technological differences across countries - questions that are central to macroeconomics.

In the bachelor course Economic policy, the students became familiar with theoretical frameworks describing the macroeconomy in the short run. During this course the time horizon is extended to the long run implying a shift in focus - from business fluctuations taking the technology as given to technology and long-run development.

After completing the course the student should hold the following list of specific competences.
Knowledge:
- understand the building blocks of neoclassical growth theory
- identify key assumptions in the Solow and Romer models
Skills:
- derive steady state solutions of the Solow and Romer models mathematically
- analyse steady state properties of the Solow and Romer models mathematically and graphically
- deduce transitional dynamics in the Solow model graphically
Competences:
- choose between competing growth models when analysing specific questions
- evaluate statements about growth mechanisms applying formalised growth models

The course requires active participation. The course content is divided into 5-7 themes. A theme is made up of a number of questions under a thematic heading. Each theme is initiated by a lecture where the theme is introduced and put into perspective followed by group work on the theme questions. The themes organise the students' work during the course, and working on the theme questions allow the students to develop the theories in stead of being introduced to the theories through a lecture.

The precise literature will be announced at the beginning of the course at Absalon.

it is required that you have comptencies in microeconomics and macroeconomics of at least 15 ECTS of each, know how to work with formal mathematically formulated economic models, and has competencies in introductory econometrics

ECTS
7,5 ECTS
Type of assessment
Written examination, 4 hours under invigilation
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Aid
All aids allowed

NB: If the exam is held at the ITX, the ITX will provide you a computer. Private computer, tablet or mobile phone CANNOT be brought along to the exam. Books and notes should be brought on paper or saved on a USB key.

Marking scale
7-point grading scale
Censorship form
No external censorship
one internal examiner
Criteria for exam assessment

according to the learning outcome

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 40
  • Theory exercises
  • 16
  • Preparation
  • 146
  • Exam
  • 4
  • English
  • 206