EconS 572

^{School of Economic Sciences | WSU} _{Gregmar Galinato}

International Development

Professor: Gregmar I. Galinato	Office: Hulbert Hall 203C
Office: Hulbert Hall 203C	Hours: 1:25 – 2:35pm T, Th or by Appointment
Phone: 335-6382	Hours: 1:25 – 2:35pm T, Th or by Appointment

Course Overview

This course will present various aspects of economic growth and development from a macro and microeconomic perspective. To understand macroeconomic foundations of development, we will cover theoretical and empirical economic growth models that emphasize the role of human capital, technology, the environment and natural capital as engines of growth. We will include also include the effect of the political economy, trade and other macroeconomic policies in determining economic growth. To understand the microeconomic foundations of development, we will study the role of experiments, both in the laboratory and in the field, in uncovering causal linkages between policies and programs and various indicators of development. This will cover a wide array of topics including education, technology adoption, health, financial institutions and governance.

Syllabus

I. Neoclassical Growth models

*Aghion, P. and P. Howitt (1998), Endogenous Growth Theory, MIT Press, Cambridge, Mass. Chapters 1 to 3.

*Lucas, R. (1998). “On the Mechanics of Economic Development,” Journal of Monetary Economics, pp. 3-42.

Swan, T.W. (1956). “Economic growth and capital accumulation”. Economic Record, 32 (4): 334-61.

Solow, R. (1956). “A contribution to the theory of economic growth”. Quarterly Journal of Economics 70 (1):65-94.

Barro, R. and X. Sala-i-Martin (1992) “Convergence”, Journal Political Econ., 100, 223-251.

Barro, R., and X. Sala I. Martin (1995), Economic Growth, McGraw-Hill Inc., New York
(Chapters 1 to 5).

Romer, D. 1996. Advanced Macroeconomics. McGrawhill

Romer, P. (1986). “Increasing Returns and long-run growth,” Journal of Political Economy, pp. 1002-1037.

Romer, P. (1987). “Growth Based on Increasing Returns due to Specialization,” American Economic Review, pp. 56-62.

Romer, P. (1990). “Endogenous Technical Change,” Journal of Political Economy, S71-S102.

Popp, D. 2002. “Induced Innovation and Energy Prices.” American Economic Review. 92(1): 160-180.

Caballero, R.J. and A.B. Jaffe. 1993. “How High are the Giants’ Shoulders: An Empirical Assessment of Knowledge Spillovers and Creative Destruction in a Model of Economic Growth.” NBER Macroeconomics Annual 1993, Volume 8.

Jang, H. and X. Du. 2013. “ Price- and Policy-Induced Innovations: The Case of U.S. Biofuel.” Journal of Agricultural and Resource Economics. 38(3):299–311.

Turner, C., R. Tamura and S E. Mulholland. 2013. “How important are human capital, physical capital and total factor productivity for determining state economic growth in the United States, 1840–2000?” Journal of Economic Growth December 2013, Volume 18, Issue 4, pp 319-371

Bahk, Byong-Hyong and Michael Gort. 1993. “Decomposing Learning by Doing in New Plants.” Journal of Political Economy. V101(4): 561-583.

Leach, Andrew J. 2007. “The climate change learning curve.” Journal of Economic Dynamics and Control Volume 31, Issue 5, May 2007, Pages 1728–1752.

II. Growth and the Environment

*Aghion, P. and P. Howitt (1998), Endogenous Growth Theory, MIT Press, Cambridge, Mass. Chapter 5.

*Stokey, N. (1998), “Are There Limits to Growth,” International Economic Review, 39, pp. 1-31.

*Kijimaa, M., K. Nishideb, and A. Ohyamac. 2010. “Economic models for the environmental Kuznets curve: A survey.” Journal of Economic Dynamics and Control. Volume 34, Issue 7, July 2010, Pages 1187–1201

*López, R., G. Anríquez and S. Gulati (2007). “Structural Change and Sustainable Development”. Journal of Environmental Economics and Management, 53, pp 307-322.

*Jayachandran, Seema, Joost De Laat, Eric F Lambin, Charlotte Y Stanton, Robin Audy, and Nancy E Thomas. 2017. “Cash for Carbon: A Randomized Trial Of Payments for Ecosystem Services to Reduce Deforestation.” Science 357 (6348): 267–73. doi:FS-1035.

Brock, W. A. and M. Scott Taylor. (2004). “Economic Growth and the Environment: A Review of Theory and Empirics.” NBER working paper w10854. Available at: http://www.nber.org/papers/.

_______. (2004). “The Green Solow Model.” NBER working paper w10557. Available at: http://www.nber.org/papers/.

_______. (2003). “The Kindergarten Rule of Sustainable Growth.” NBER working paper w9597. Available at: http://www.nber.org/papers/.

Brander, J. and M.Scott Taylor (1998). “The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use”. American Economic Review, pp. 119-38.

López, R. and A. Stocking (2009). “ Bringing growth theory down to earth”.
https://www.agnr.umd.edu/Academics/departments/AREC/LibComp/AREClib/Publications/Working-Papers-PDF-files/09-01.pdf.

Nordhaus, William D. 1991. “To Slow or Not to Slow: The Economics of the Greenhouse Effect.” Economic Journal 101(407): 920–937.

Nordhaus, William D. 1994. Managing the Global Commons: The Economics of Climate Change. Cambridge, MA: MIT Press.

Nordhaus, William D. 2001. “Global Warming Economics.” Science 294: 1283–1284.

Stern, Nicholas. 2007. The Economics of Climate Change: The Stern Review.Cambridge: Cambridge University Press. Available online at http://www.hm- treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm.

Stern, Nicholas (2008). “The Economics of Climate Change,” The American Economic Review 98(2): 1-37.

Weitzman, M.L. (2009) “On Modeling and Interpreting the Economics of Catastrophic Climate Change.” The Review of Economics and Statistics 2009 91(1): 1-19.

III. Corruption and Policy Formation

*Grossman, G. and E. Helpman (1994). “Protection for Sale,” American Economic Review, pp. 833-50.

*Fredriksson, P. and J. Svensson. 2003. “Political instability, corruption and policy formation: the case of environmental policy.” Journal of Public Economics. 87: 1383–1405.

*Bulte, E.H., R. Damania and R. Lopez. 2007. “On the gains of committing to inefficiency: Corruption, deforestation and low land productivity in Latin America.” Journal of Environmental Economics and Management. 54: 277-295.

López, R. (1998). “The Tragedy of the Commons in Cote d’Ivoire Agriculture: Empirical Evidence and Implications for Evaluating Trade Policy”, The World Bank Economic Review, pp.105-131.

Grossman, G. M. and Krueger, A. B. (1995) “Economic Growth and the Environment,”
Quarterly Journal of Economics, 110(2): 353-77.

Copeland, B. and S. Taylor (2004). “Trade, Growth and the Environment.” Journal of Economic Literature.

Deacon, R.T. (2004). “Does the Environmental Kuznets Curve Describe How Individual Countries Behave?” Working Paper UCSB # 01-04. Available at: http://www.econ.ucsb.edu/cgibin/faculty.cgi?f=deacon.

IV. Trade and the Environment

*Brander, J. & M. Scott Taylor, 1997. “International Trade and Open-Access Renewable Resources: The Small Open Economy Case,” Canadian Journal of Economics. 30(3): 526-52,

*Grossman, Gene M.; Krueger, Alan B. “Environmental Impacts of a North American Free Trade Agreement” ; The Mexico-U.S. free trade agreement, 1993, pp. 13-56, Cambridge and London: MIT Press

*Chilchilnisky, G. (1994). “North-South Trade and the Global Environment,” American Economic Review 84: 851-874.

*Antweiler, W.; B.R. Copeland; T.M. Scott. (2001). Is Free Trade Good for the Environment? American Economic Review, 91(4): 877-908.

Alpay, S. (2001). How Can Trade liberalization be Conducive to a Better Environment? A Survey of the Literature. Available at: http://www.gtap.agecon.purdue.edu/resources/download/1443.pdf

Brander, J. and M. Taylor (1997), “International Trade between Consumer and Conservationist Countries,” Resource and Energy Economics, 19, pp. 267-97.

Copeland, B. and M. Taylor (1994). “North-South Trade and the Environment,” Quarterly Journal of Economics, (109): 755-787.

López, R. (1994). “The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization,” Journal of Environmental Economics and Management, 27(2): 163-84.

López, R. and Niklitschek (1991). “Dual Economic Growth in Poor Tropical Areas,” Journal of Development Economics, pp. 189-211.

Jinji, N. (2006). “International trade and terrestrial open-access renewable resources in a small open economy”, Canadian Journal of Economics, pp. 790-808.

V. Geography and Institutions

*Gallup, J., J. Sachs and A. Mellinger, (1999) “Geography and Economic Development,” International Regional Science Review. vol. 22 no. 2 179-232

Easterly, W. and R. Levine (2003) “Tropics, germs, and crops: how endowments influence economic development,” Journal of Monetary Economics, 50(1), 3-39, January.

Sachs, J. (2001) Tropical Underdevelopment,” NBER Working Papers 8119.

Masters, W. and M., McMillan, (2001) “Climate and Scale in Economic Growth” Journal of Economic Growth, 6(3), 167-86, September.

Aghion, P. and S. Durlauf, eds. (2005) Handbook of Economic Growth, Vol. 1A. North Holland Ch 6.

Acemoglu, D., S. Johnson and J. Robinson (2001) The Colonial Origins of Comparative Development: An Empirical Investigation” American Economic Review, 91(5), 1369-1401, December.

Rodrik, D., A. Subramanian and F. Trebbi (2004) Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development” Journal of Economic Growth, 9(2), 131-165, 06.

McArthur, J. and J. Sachs, (2001) Institutions and Geography: Comment on Acemoglu, Johnson and Robinson (2000),” NBER WorkingPapers 8114.

VI. Poverty and Income Inequality

*Azariadis, C. 1996. “The economics of poverty traps: part one : complete markets.” Journal of Economic Growth. 1: 449-486.

*Acemoglu, Daron; Robinson, James A. 2002. “The Political Economy of the Kuznets Curve.” Review of Development Economics, June 2002, v. 6, iss. 2, pp. 183-203

Azariadis, C. and J. Stachurski. 2005. Poverty Traps. Handbook of Economic Growth. Aghion and Durlauf eds. Available at: http://cedec.wustl.edu/azariadis/teaching/e5861Fl07/papers/azstach.pdf

Acemoglu, D. 1997. “Training and Innovation in Imperfect Labor Market”, Review of Economic Studies.

Acemoglu, D. and Robinson, J. A. 2002. “The Political Economy of the Kuznets Curve.” Review of Development Economics, v. 6, iss. 2, pp. 183-203

Hoff, K. and J. Stiglitz, 2001, “Modern Economic Theory and Development”, in Meier and Stiglitz (eds.) Frontiers of Development Economics, World Bank and Oxford University Press, New York.

Bardhan, P. 2001. “Distributive Conflicts, Collective Action and Institutional Economics”, in Meier and Stiglitz (eds.) Frontiers of Development Economics, World Bank and Oxford University Press, New York.

Krugman, P. 1981. “Trade, Accumulation, and Uneven development”, Journal of Development Economics, pp. 149-61.

López, R. (1998). “Where Development Can or Cannot Go: The Role of Poverty-Environment Linkages,” in B. Pleskovic and J. Stiglitz, eds., Annual Bank Conference on Development Economics 1997, The World Bank, Washington, D.C.

López, R. (2007). “Structural Adjustment and Sustainable Development”, in G. Atkinson, S. Dietz and E. Neumayer, Handbook of Sustainable Development, Edward Elgar, Cheltenham, UK and Northhampton, MA, USA

Murphy, K. M., A,. Shleifer, and R. W., Vishny (1989) Industrialization and the Big Push” Journal Political Economy, 1003-26, 97(5).

Pearce, David (2005). Managing Environmental Wealth for Poverty Reduction. Poverty and Environmental Partnership, MDG7 Initiative, UNDP, New York.