67718 - Development and Growth

Learning outcomes

A good knowledge of macroeconomics, calculus and matrix algebra is required.

Students will acquire a competent analytical albeit theretical perspective of fundamental issues of economic development.

Course contents

· Introduction

- Sustained economic development an unprecedented occurrence.

- Historical background

· The problem of an economy that cannot generate systematic technical progress. I

- Extensive growth: population dynamics and the available surplus.

- Consumption per head, investment and the rate of growth

- Diminishing returns

· The problem of an economy that cannot generate systematic technical progress. II

- Accumulation of surplus labour

- Towards a Malthusian crisis.

· Discussion and presentations

· The structure of an economic system

- The Leontief Matrix

- The maximal growth rate and the rate of surplus

- Eigen values and eigenvectors: the economic interpretation

- Effective demand in a multi-sector system

· The index of total productivity

- The necessary wage rate as a social input

- The basic system

- The rate of growth

· The notion of structural change

- From a simple one sector economy to a multi-sector economy

- The transition problem

- Implied trade-off's

· The Traverse

- The algebra of traverse

- The fundamental trade-off and the difficulties to develop

- Some historical references

· Discussions and presentations

· The nature of money and its importance for development

- An evolutionary and historical perspective

- Credit and debt

· The nature of money II

- The standard theory and its pitfalls

- Monetary institutions

- Risk and uncertainty

· Technical Progress I

- Towards a theory of endogenous technical progress

- Early concepts and conundrums

- From Keynes to Kaldor

- How to read the I=S equation

· Technical progress II

- The neo-classical approach

- Romer and Lucas

- The unanswered question

· Discussion and presentations

· Technical progress III: Alternative theories

- Searching and learning

- Bounded rationality

- The building of technological capabilities

· Feedback processes

- Path dependence

- Lock-in

- Technological trajectories

· Knowledge and information

- Arrivals and process of information

- Networks

- The evolutionary approach

· Innovations and diffusion of innovations

- Models of self-organised criticality

- Local and global interaction

· Discussion and presentations

· Forging ahead and falling behind

- Searching for the keys of development

- Robustness and resilience

· Towards a conclusion

- Some recent experiences: China and India

- A brief overview of the development outlook

Readings/Bibliography

A short bibliography and references

The following reference items are meant to provide a reading guide both to each of the above stated topics and to eventual further research. The key reference will be given at the end of each lecture.

- 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

Slides and blackboard

Assessment methods

Written exam. The exam lasts one hour. Two questions will be asked and students will be required to answer them analytically. The aim of the exam is to assess the student's ability to critically discuss issues of economic development, the implied trade-offs in terms of growth and standard of living, models of growth and of the impact of technology upon the growth process.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The exam consists in a written test. Students are not allowed to bring books, personal notes or electronic devices. Registration for the exam is compulsory and students have to register through AlmaEsami according to the general rules of the School of Economics, Management and Statistics.

 

The mark is out of 30 points, and the minimum required to pass the exam is 18 / 30.

Teaching tools

Front lectures complemented by students' presentations and discussions.

Office hours

See the website of Massimo Ricottilli