31526 - Economic Development

Learning outcomes

At the end of this course, students will have acquired knowledge of fundamental issues of economic development from a theoretical viewpoint. Basic questions will be asked and a framework for some answers will be provided. What hurdles are there to a steady path of economic development? Which the pitfalls? Whence success? Although cast in a historical context, these issues will be framed analytically: history matters but theoretical simplification is unavoidable.

Course contents

ECONOMIC DEVELOPMENT

Course Outline

 

  Topics

 

• Introduction: The singularity of economic development.

Sustained economic development: an unprecedented occurrence.

 

 

• The dynamics of extensive growth.

Population dynamics and available surplus. The economy's growth rate: the simple model.

Consumption per head, investment and the rate of growth.

Diminishing returns.

Rent and the critical threshold.

Surplus labour.

The Malthusian crisis.

 

• A crucial question: is development necessary?

      The answer is no. Crises do not necessarily lead to virtuous reactions and  virtuous circles.

     

 

 

• The Structure of the Economy and Structural change.

A multisectorial view of the economy: from a simple two sector economy to a full fledged n-sector structure.

Generalising the growth process

Sraffa and the basic system.

The classical view: Ricardo and Marx

Technical improvement.

 

 

• Technical progress.

The quintessence of sustained growth: general characteristics. Why is it important?

Kaldor and the post-Keynesian school.

The neo-classical approach: new growth theories

The evolutionary perspective: positive feedbacks and cumulative processes.

 

• Innovation and diffusion

Path dependence and technological  trajectories.

Bounded rationality.

      Learning

Patterns of searching.          

 

 

• Diffusion as self-organisation

The new models of diffusion.

 

• Development theory and developing countries .

Catching up and falling behind.

Constraints to growth.

 

 

 

 

 

Readings/Bibliography

References

 

1. The singularity of economic development.

      Landes D.(1999). ‘The Wealth and Poverty of Nations: Why some are so rich and some so       

      Poor. W. W. Norton, New York.

 

     The Cambridge Economic History.

 

      Diamond J. (1997): ‘Guns, Germs and Steel. The Fates of Human Societies.' W.W. Norton 

      & Company, New York.

    

      Diamond J. (2004) : ‘Collapse: How Societies Choose to Fail or Succeed'. Viking and   

      Penguin Books.

 

1. The dynamics of extensive growth.

      Ricottilli M. (1993): Teoria dello Sviluppo Economico'. La Nuova Italia Scientifica, Roma. 

 

     Thirwall A.P. (1989): ‘Growth and Development: with special reference to developing

     countries'. Palgrave, Macmillan, London.

 

1. Is development necessary?

      Ricottilli M. (1993):‘ Perspectives on Development'. in Vaggi G. (ed.): ‘ From the  

     Debt Crisis to Sustainable Development'. Macmillan, London.

 

1. Structural Change.

Pasinetti. L. (1981): ‘Structural change and economic growth : a theoretical essay on the dynamics of the wealth of nations', Cambridge University Press.

 

Goodwin R.M. (1974): ‘The Use of Normalised General Co-ordinates in Linear Value and Distribution Theory.' In Polenské K.R., Skolka J.V. (eds):  ‘Advances in Input-Output Analysis'. Proceedings of the Sixth Conference on Input-Output Techniques, Wien.

 

Kurz H.D., Salvadori N. (1995):' Theory of Production: a long period analysis.' Cambridge University Press.

 

      Lewis A. (1954): ‘Economic Development with Unlimited Supplies of labour'. ‘The

      Manchester School of Economic and Social Studies' Vol.2, n.2.

 

      Sraffa P.(1960) ‘ Production of Commodities by Means of Commodities. Cambridge
      University Press.  

    

 

1. Structural change as a disequilibrium path.

Hicks  J. (1973): ‘Capital and Time.'  Clarendon Press, Oxford.

 

Ricottilli M. (1993): ‘Teoria dello Sviluppo Economico'. La Nuova Italia Scientifica, Roma.

 

Ricottilli M. (2008): ‘Division of Labour, Traverse and Evolving Structures', in Hagemann H., Scazzieri R., (eds.): ‘Capital, Time and Transitional Dynamics'. Routledge, London.

 

1. The neo-classical approach

Romer D. (2001): ‘Advanced Macroeconomics'. McGraw Hill, Boston.

 

Aghion P., Howitt P.(1998): ‘Endogenous Growth Theory', MIT Press, Cambridge, Mass.

    

1. The evolutionary approach

        Arthur B. (1989): "Competing Technologies, Increasing Returns and Lock-in by Historical Events," Economic Journal, 99, 106-

       131,1989.

       Ricottilli M. (1994):'Technical Progress, Innovative Activity and Development'. The International Journal of Technology Management. Vol. 9, no.3/4.

 

Dopfer K. (2005): ‘The Evolutionary Foundation of Economics'. Cambridge University Press.

 

Kauffman S. (1993): ‘ The Origin of Order'. Oxford University Press.

Further Readings:

-          Aghion P., Howitt P.(1998): ‘Endogenous Growth Theory', MIT Press, Cambridge, Mass.

-          The Cambridge Economic History.

-          Andergassen R. Nardini F. Ricottilli M. (2006): ‘Innovation Waves, Self-organised Criticality and Technological Convergence.' The Journal of Economic Behavior and Organisation. Vol. 61, pp. 710-728.

-          Andergassen R. Nardini F. Ricottilli M. (2009): ‘Innovation and Growth through Local and Global Interaction.' The Journal of Economic Dynamics and Control. Vol. 33. pp. 1779-1795.

-          Diamond J. (1997): ‘Guns, Germs and Steel. The Fates of Human Societies.' W.W. Norton  & Company, New York.

-          Diamond J. (2004) : ‘Collapse: How Societies Choose to Fail or Succeed'. Viking and       Penguin Books.

-          Dopfer K. (2005): ‘The Evolutionary Foundation of Economics'. Cambridge University Press.

-          Goodwin R.M. (1974): ‘The Use of Normalised General Co-ordinates in Linear Value and Distribution Theory.' In Polenské K.R., Skolka J.V. (eds):  ‘Advances in Input-Output Analysis'. Proceedings of the Sixth Conference on Input-Output Techniques, Wien.

-          Goyal S. (2007): ‘ Connections'. Princeton University Press. Princeton.

-          Hicks  J. (1973): ‘Capital and Time.'  Clarendon Press, Oxford.

-          Holland J. (1998): Emergence: From Chaos to Order. Oxford University Press. Oxford

-          Kauffman S. (1993): ‘ The Origin of Order'. Oxford University Press

-          Kurz H.D., Salvadori N. (1995):' Theory of Production: a long period analysis.' Cambridge University Press.

-          Landes D.(1999). ‘The Wealth and Poverty of Nations. W. W. Norton, New York

-          Lewis A. (1954): ‘Economic Development with Unlimited Supplies of labour'. ‘The       Manchester School of Economic and Social Studies' Vol.2, n.2.

-          Pasinetti. L. (1981): ‘Structural change and economic growth : a theoretical essay on the dynamics of the wealth of nations', Cambridge University Press.

-          Pomeranz K. (2000): ‘The Great Divergence'. Princeton University Press. Princeton.

-          Ricottilli M. (1993): Teoria dello Sviluppo Economico'. La Nuova Italia Scientifica, Roma. 

-          Ricottilli M. (1993):‘ Perspectives on Development'. in Vaggi G. (ed.): ‘ From the       Debt Crisis to Sustainable Development'. Macmillan, London.

-          Ricottilli M. (1994):'Technical Progress, Innovative Activity and Development'. The       International Journal of Technology Management. Vol. 9, no.3/4.

-          Ricottilli M. (2008): ‘Division of Labour, Traverse and Evolving Structures', in Hagemann H., Scazzieri R., (eds.): ‘Capital, Time and Transitional Dynamics'. Routledge, London.

-          Romer D. (2001): ‘Advanced Macroeconomics'. McGraw Hill, Boston.

-          Sraffa P.(1960) ‘ Production of Commodities by Means of Commodities. Cambridge      University Press. 

-          Thirwall A.P. (1989): ‘Growth and Development: with special reference to developing      countries'. Palgrave, Macmillan, London.

 

 

Teaching methods

Up-front lectures.

Assessment methods

Written exam. The exam lasts one hour: students are expected to answer two broad questions concerning the course topics. They are expected to discuss analytically the main issues of economic development, the implied trade-offs, the models that can be used to understand to growth process, Emphasis is laid upon the role of technological progress in the development process.

Teaching tools

Transparencies, Blackboard.

Links to further information

http://www.lmec.unibo.it/LMEC/default.htm

Office hours

See the website of Massimo Ricottilli