Econ 550 Stephen Parente
Topics in Macroeconomics Fall 2019
Office: 118 DKH
Office Hours: Tuesday, Thursday 11:00-12:00
Course Homepage: publish.illinois.edu/parente/courses/econ550
Course Description and Goals: This is a topics course on economic development and growth, with an emphasis on the very long-run (1300-2000). The course will focus on that part of growth literature known as unified growth theory in an attempt to understand todays’ huge disparities in international incomes. Among the topics the course will cover are savings TFP, structural transformations, political economy, fertility and human capital, and genetics. In exposing you to these topics and techniques, the hope is that at least one of you will find a dissertation topic.
Evaluation: Evaluation will be based on a number of out of home projects, class presentations as well as a final examination. The home projects will involve solving some models on the computer via Matlab, Fortran or some other software of your choice. As the success of a topics course is based on the number of students who find a dissertation topic, a valid research proposal is a substitute for the final examination.
Books and Readings: Most of the course will be based on journal articles that can be accessed through the course website. However, there are a number of books that you may find useful. Some of them are listed below.
Acemoglu, Daron. 2009. Introduction to Modern Economic Growth; Princeton University Press. Princeton.
Acemoglu, D. and J. Robinson. 2012 Why Nations Fail: the Origins of Power, Prosperity, and Poverty. Harvard University Press: Cambridge, MA.
Aghion, P. and S. Durlauf. 2014. Handbook of Economic Growth. Elsevier Press.
Galor, Oded. 2011 Unified Growth Theory. Oxford University Press: Oxford and Princeton.
McCloskey, Diedre. 2010. Bourgeois Dignity; Why Economics Can’t Explain the World. Chicago University Press: Chicago.
Mokry, Joel. 1990. The Lever of Riches. Technological Creativity and Economic Progress. Oxford University Press: New York and Oxford.
Clark, Gregory. 2008. A Farewell to Alms: A Brief Economic History of the World. Princeton
Diamond, Jared. 1997 Guns and Steel: The Fates of Human Societies. W.W. Norton and Company: New York
Calibration Reference: Kydland, F. and E.C. Prescott (1996): The Computational Experiment: an Econometric Tool. Journal of Economic Prespecitves 10: 69-85.
Prescott, E.C. (1998) Business Cycle Research: Problems and Methods. Federal Reserve Bank of Minneapolis Working Paper 590.
Other Resources: A great source for research ideas are the webpages of Dani Rodrik and Oded Galor. Rodrik in particular is good at identifying puzzles. Galor is one of the most creative of researchers in the profession.
Course Outline and Reading List
- Introductory Topics: Development and Growth Facts
Galor, Oded. 2010. From Stagnation to Growth: Unified Growth Theory.
Broadberry, S., B. Campbell, Alexander Klein, Mark Overton, Bas van Leeuwen. 2010. “British Economic Growthhttp://www2.warwick.ac.uk/fac/soc/economics/staff/academic/broadberry/wp/britishgdplongrun8a.pdf
Clark, Gregory, 2013. “1381 and the Malthus delusion,” Explorations in Economic History, Elsevier, vol. 50(1), pages 4-15.
Acemoglu, D. Ch. 1.
- Growth Accounting, TFP, Savings Rates, Human Capital
Parente, S. L. and Prescott E.C. 1994. “Barriers to Technology Adoption and Development. Journal of Political Economy (102) 298-321.
Hall, R. and C. I. Jones (1999) “Why do Some Countries Produce So much More Output than Workers.” Quarterly Journal of Economics
Djankov, S. La Porta, R., F. Lopez de Silanes, and A. Shleifer. 2002 The Regulation of Entry Quarterly Journal of Economics.117: 1-37.
McCloskey, D. Chapters 14, 18, 23
Erosa, A. T. Koreshkova, and D. Restuccia. 2010. “How Important Is Human Capital? A Quantitative Theory Assessment of World Income Inequality,” Review of Economic Studies, Wiley Blackwell, vol. 77(4), pages 1421-1449.
Antunes, A. T. Cavalcanti, and A. Villamil (2008) “The Effects of Financial Repression and Enforcement on Entrepreneurship and Economic Development, “ Journal of Monetary Economics 55: 278-97.
III. Neoclassical Growth Model and Growth Miracles
King, R. and R. Sergio (1993) “Transitional Dynamics and Economic Growth in the Neoclassical Model,” American Economic Review, American Economic Association, vol. 83(4), pages 908-31.
Chang, Y and Hornstein, A. 2011. “Transition Dynamics in the Neoclassical Growth Model: The Case of South Korea,” RCER Working Papers 565, University of Rochester.
- Misallocation of Resources
Hsieh, C., and P. J. Klenow, 2009. “Misallocation and Manufacturing TFP in China and India,” The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1403-1448, November.
Restuccia, D. and R. Rogerson, 2008. “Policy Distortions and Aggregate Productivity with Heterogeneous Plants,” Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
- Structural Transformation
Herrendorf, B, Rogerson, R. and Valentinyi, A. 2014. Growth and Structural Transformation. Handbook of Economic Growth, pages 885-941.
Gollin, D., S.L. Parente, and R. Rogerson (2007). “ The Food Problem and the Evolution of International Incomes”, Journal of Monetary Economics 54 : 1230-1255.
Comin, D., D. Lashkari, and M. Mestieri. 2015. Structural Change with Long-run Income and Price Effects. Unpublished Working Paper.
Alverez-Cuadrado, Francesco and Poshke, Markus 2009, Structural Change of Agriculture: Labor Push versus Labor Pull. AEJ Macroeconomics.
Margarida Duarte & Diego Restuccia, 2010. “The Role of the Structural Transformation in Aggregate Productivity,” The Quarterly Journal of Economics, MIT Press, vol. 125(1), pages 129-173, February.
- Unified Growth Theory
Galor, O. and D. N. Weil, 1999. “From Malthusian Stagnation to Modern Growth,” American Economic Review, American Economic Association, vol. 89(2), pages 150-154.
Nils-Petter Lagerlöf, 2006. “The Galor-Weil Model Revisited: A Quantitative Exercise,” Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 116-142, January.
Hansen, Gary and Edward C. Prescott. 2002. “Malthus to Solow”. AER Papers and Proceedings. 92: 1205-1217.
Desmet, K. and S. L. Parente. 2012 “The Evolution of Markets and the Revolution of Industry: A Unified Theory of Growth”, Journal of Economic Growth 17: 205-234.
Voigtländer, N. and H.-J. Voth, 2006. “Why England? Demographic factors, structural change and physical capital accumulation during the Industrial Revolution,” Journal of Economic Growth, Springer, vol. 11(4), pages 319-361.
Wu, Dutta, Levine and Papageorge Entertaining Malthus: Bread, Circuses and Economic Growth
VII. Genetics, Culture and Long Run Development
Spolaore, E. and R. Wacziarg. 2014. Long Term Barriers to Economic Development. in Handbook of Economic Growth ed. Aghione and Durlauf, 121-176.
Algan, Y. and P. Cahuc. 2014. Trust, Growth, and Well-Being: New Evidence and Policy Implications. Handbook of Economic Growth, pages 50-120.
Ashraf, Q. and O. Galor, 2010. “The “Out of Africa” Hypothesis, Human Genetic Diversity, and Comparative Economic Development,” Working Papers 2010-7, Brown University, Department of Economics.
Galor, O. and O. Moav, 2002. “Natural Selection And The Origin Of Economic Growth,” The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1133-1191.
Calvacanti, T., S.L. Parente, and R. Zhao 2007. “Religion in Macroeconomics: A Quantitative Analysis of Weber’s Hypothesis, Economic Theory 32: 105-123.
Benabou, R., D. Ticchi and A. Vindigni. Forbidden Fruits: The Political Economy of Science, Religion and Growth. Dept of Economics. Princeton
Galor, O. and S. Michalopoulos, 2011. “Evolution and the Growth Process: Natural Selection of Entrepreneurial Traits,” Working Papers 2011-9, Brown University, Department of Economics.
Clark, Gregory. 2009. The Domestication of Man: The Social Implications of Darwin. ArtefaCToS (2): 64-80.
Fogli, A. and L Valdkemp. 2014. Germs, Social Networks and Growth. NYU Working Paper.
VIII. Political Economy and Development
Oded Galor & Omer Moav & Dietrich Vollrath, 2009. “Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence,” Review of Economic Studies, Wiley Blackwell, vol. 76(1), pages 143-179, 01.
Krusell, P. and J.V. Rios-Rull. 1996. “Vested Interests in a Positive Theory of Stagnation and Growth,” Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 301-29, April.
Acemoglu, D. Chapter 22.
Raghuram G. Rajan, 2009. “Rent Preservation and the Persistence of Underdevelopment,” American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 178-218, January.
Rodrik, Dani. 2013 “When Ideas Trump Interests”, NBER Working Paper 19631.
Greif, A. and C. Kingston.2011. “Institutions: Rules or Equilibria?In Political Economy of Institutions, Democracy and Voting, Edited by Gonzalo Caballero and Norman Schofield. Springer, Pp. 13-44.
Aldashev, Gani and G. Zanzarone. 2013. Endogenous Enforcement Institutions, University of Namur Working Paper
- Special Interest Groups
Mokyr, Joel. 2002 The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton University Press: Princeton and Oxford
Parente, S. L. and E.C. Prescott. 1999. Monopoly Rights: A Barrier to Riches. American Economic Review.
Desmet, Klaus and S.L. Parente. Resistance to Technology: The Rise and Decline of Guilds forthcoming in Review of Economic Dynamics