TrainingsMasterEconomicsCoursesAdvanced macroeconomics

Master EconomicsUE Advanced macroeconomics

Content

The course will analyse advanced macroeconomics models, with a special focus on growth and development. The empirical validity of these theories will be discussed.

Course outline :

The aim of the course is to examine the “new growth” or “endogenous growth” theories developed in the last 25 years, as well as the closely related literature on development.

The course consists of two sections. The first part will examine the seminal work in growth and economic development. We will study the various mechanisms that will result in sustained long-run growth -learning-by-doing, investments in infrastructure, education, and firms’ R&D decisions– and analyse the role played by externalities and increasing returns to scale. We will see that a crucial implication of these growth models is that the equilibrium growth rate is not socially optimal, and that a laissez-faire economy can grow either too slowly or too fast. We will also examine the causes of economic development, and why poverty traps may emerge. The explanations proposed include the theory of “the big push”, whereby increasing returns to scale can result in poverty traps and hence explain why certain economies remain underdeveloped. We will then address the role of “threshold effects” in education, their implications for development, and the role of the distribution of wealth.

The second part of the course will examine and several topics related to growth : the empirical evidence, the relationship between growth and inequality, recent views on the causes of the industrial revolution, and the role of institutions in development.

Professional skills

  • Develop modelling skills in macroeconomics
  • Understanding the causes of long-term growth and of why some countries remain in poverty traps

Language used

Main language used by this course: Anglais.

Bibliography

  • Barro, R. and X. Sala-i-Martín, Economic Growth, Mc Graw-Hill 1995.
  • Aghion, P. and P. Howitt, Endogenous Growth Theory, MIT Press 1998.
  • Aghion, P. and P. Howitt, The Economics of Growth , MIT Press 2009.
  • Aghion, P. and S. Durlauf (eds.) Handbook of Economic Growth, North Holland 2005.

Fundamental prerequisites

A reasonable competence on math is expected.

Recommended prerequisites

Macroeconomics modelling, growth, development.

Structure and organisation

The 24 hours of the course will be (roughly) divided as follows : 12 hours of lectures devoted to analysing in detail models, 4 hours devoted to problem solving, and 8 hours focusing on ‘topics’ such as inequality and growth or trade and growth.

Volume of teachings

  • Lectures: 24 hours

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