Economic Growth

Code:

LEC302

Acronym:

CE

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2006/2007 - 1S

Active?	Yes
Responsible unit:	Grupo de Economia
Course/CS Responsible:	ECONOMICS

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ECO	490	Official Curricular Structure since 2004	3	2		-

Objectives

The course of Economic Growth aims to present the main perspectives and the formal macro-models that were developed to explain the dynamic behaviour of economies. Why do countries have different levels of per capita income and productivity? What makes some countries grow faster than others? Do countries converge to the same equilibrium in the long run? In the growth process, what is the role played by capital accumulation, by human capital investments and by knowledge?
The course of Economic Growth presents and discusses the main formal macro-models (from the Harrod – Solow debate to endogenous growth models). Besides theoretical perspectives, we will also analyse the main methodologies concerning empirical studies on economic growth and discuss some relevant empirical studies.

Program

1. INTRODUCTION TO ECONOMIC GROWTH
1.1. Concepts
1.2. Measure
1.3. Growth theory

2. DYNAMIC EQUILIBRIUM: THE HARROD – SOLOW DEBATE
2.1. Harrod model
2.2. The neoclassical growth model (Solow)
2.3. Post-Keynesian models

3. SOLOW MODEL AND THE STYLISED FACTS OF GROWTH
3.1. The Solow Model with technical progress
3.2. Assessing the model considering economic growth facts (decomposition of growth sources; Kaldor’s stylised facts; the convergence debate)

4. EXTENSIONS OF THE NEOCLASSICAL GROWTH MODEL
4.1. The Solow model with human capital
4.2. The contribution of Barro to the convergence concept

5. ENDOGENOUS GROWTH
5.1. Introduction (the meaning of endogenous growth; the AK model; knowledge as the engine of growth)
5.2. The first model of P. Romer
5.3. The Lucas model
5.4. Models with endogenous innovation
5.5. A final assessement

6. TECHNOLOGY AND ECONOMIC GROWTH
6.1. The knowledge production function
6.2. Innovation, diffusion and investment
6.3. The role of equipment investment
6.4. Technology diffusion at international level

Main Bibliography

1. Textbook

FIGUEIREDO, A.M; PESSOA, A.; SILVA, M.R. (2005), Crescimento Económico, Escolar Editora.

2. Articles

BARRO, Robert (1991), “Economic Growth in a Cross Section of Countries”, Quarterly Journal of Economics, 106, pp. 407-443.
DE LONG, J. Bradford and SUMMERS, L. (1991), “Equipment Investment and Economic Growth”, Quarterly Journal of Economics, 106, 2, pp 445-502.
FAGERBERG, Jan (1987), “A Technology Gap Approach to Why Growth Rates Differ”, in Research Policy, vol. 16; republished in The Economics of Innovation (published by C. FREEMAN), Edward Elgar, 1990, pp. 55-67.
KRAVIS, Irving (1986), “The Three Faces of the International Comparison Project”, The World Bank Research Observer, vol. 1, no. 1, pp. 3-26.
LUCAS, Robert E. (1988), “On the Mechanics of Economic Development”, Journal of Monetary Economics, vol. 22, pp. 3-42.
MANKIW, N. Gregory, ROMER, David and WEIL, David N. (1992), “A Contribution to the Empirics of Economic Growth”, Quarterly Journal of Economics, 107, pp. 407-437.
ROMER, Paul M. (1994), “The Origins of Endogenous Growth”, Journal of Economic Perspectives, Vol. 8, 1, pp. 3-22.
SOLOW, Robert (1994), “Perspectives on Growth Theory”, Journal of Economic Perspectives, Vol. 8, 1, pp. 45-54.

Complementary Bibliography

1. Textbooks

BARRO, Robert and SALA-I-MARTIN, X. (1995), Economic Growth, McGraw-Hill International Editions.
JONES, Charles I. (2000), Introduction to Economic Growth, 2nd Edition, W.W. Norton.
SOLOW, Robert (2000), Growth Theory – An Exposition, 2nd Edition, Oxford University Press.

2. Articles

DOMAR, Evsey (1946), “Capital Expansion, Rate of Growth and Employment”, Econometrica, vol. 14, pp. 137-147.
HARROD, Roy (1939), “An Essay in Dynamic Theory”, Economic Journal, vol. 49, pp. 14-33.
KALDOR, Nicholas (1957), “A Model of Economic Growth”, Economic Journal, vol. 67.
ROMER, Paul M. (1986), “Increasing Returns and Long-Run Growth”, Journal of Political Economy, vol. 94, pp. 1002-1037.
ROMER, Paul M. (1990), “Endogenous Technical Change”, Journal of Political Economy, vol. 98, pp. S71-S102.
SOLOW, Robert (1956), “A Contribution to the Theory of Economic Growth”, in Quarterly Journal of Economics, vol. 70, pp. 65-94.

3. Other

WORLD BANK, World Development Report, various years.
OCDE (2002), Purchasing Power Parities and Real Expenditures, Benchmark Year 1999, Paris.
UNPD, Human Development Report, various years.

Teaching methods and learning activities

Teaching procedures includ both theoretical learning and analysis of empirical evidence, in order to achieve a balance between theoretical and practical issues.
SIGARRA information system will be used as a permanent platform of communication between teachers and students.

Evaluation Type

Calculation formula of final grade

Final exam: General regime

Continuous evaluation: Average classification of the final test (60%) and the two intermediate tests (20% each).

Classification improvement

General regime