Lecture Notes in Economic Growth - ku

1 Lecture Notes in Economic GrowthChristian GrothMay 7, 2014iic Groth, Lecture Notes in Economic Growth , (mimeo) Introduction to Economic The eld .. Economic Growth theory .. Some long-run data .. Calculation of the average Growth rate .. Discrete compounding .. Continuous compounding .. Doubling time .. Some stylized facts of Economic Growth .. The Kuznets facts .. Kaldor s stylized facts .. Concepts of income convergence .. convergence vs. convergence .. Measures of dispersion .. Weighting by size of population .. Unconditional vs. conditional convergence .. A bird s-eye view of the data .. Other convergence concepts.

2 Literature .. 192 Review of The production technology .. A neoclassical production function .. Returns to scale .. Properties of the production function under CRS .. Technological change .. The concepts of a representative rm and an aggregate pro-duction function .. Long-run vs. short-run production functions* .. Literature Notes .. References .. 453 Continuous time The transition from discrete time to continuous time .. Multiple compounding per year .. Compound interest and discounting .. The allowed range for parameter values .. Stocks and ows .. The choice between discrete and continuous time analysis .. Appendix.

3 544 Balanced Growth Balanced Growth and constancy of key ratios .. The concepts of steady state and balanced Growth .. A general result about balanced Growth .. The crucial role of Harrod-neutrality .. Harrod-neutrality and the functional income distribution .. What if technological change is embodied? .. Concluding remarks .. References .. 685 The concepts of TFP and Growth accounting: Some warnings Introduction .. TFP level and TFP Growth .. TFP Growth .. The TFP level .. The case of Hicks-neutrality* .. Absence of Hicks-neutrality* .. Three warnings .. References .. 806 Transitional dynamics. Barro-style Growth Point of departure: the Solow model.

4 Do poor countries tend to approach their steady state frombelow? .. Convergence speed and adjustment time .. Convergence speed for~k(t).. Convergence speed forlog~k(t).. Convergence speed fory(t)=y (t).. Adjustment time .. 92c Groth, Lecture Notes in Economic Growth , (mimeo) Barro-style Growth regressions .. References .. 977 Michael Kremer s population-breeds-ideas The model .. Law of motion .. The inevitable ending of the Malthusian regime .. Closing remarks .. Appendix .. References .. 1038 Choice of social discount Basic distinctions relating to discounting .. The unit of account .. The Economic context .. Criteria for choice of a social discount rate.

5 Optimal capital accumulation .. The setting .. First-order conditions and their Economic interpretation The social consumption discount rate .. The climate change problem from an Economic point of view . Damage projections .. Uncertainty, risk aversion, and the certainty-equivalentloss .. Comparing bene t and costs .. Conclusion .. Appendix: A closer look at Arrow s estimate of the certaintyloss .. References .. 1299 Human capital, learning technology, and the Mincer Conceptual issues .. Macroeconomic approaches to human capital .. Human capital and the e ciency of labor .. The life-cycle approach to human capital .. Choosing length of education.

6 Human wealth .. A perfect credit and life annuity market .. Maximizing human wealth .. Explaining the Mincer equation .. 148c Groth, Lecture Notes in Economic Growth , (mimeo) Some empirics .. Literature .. 15210 Human capital and knowledge creation in a growing The model .. Productivity Growth along a BGP with R&D .. Balanced Growth with R&D .. A precondition for sustained productivity Growth wheng h= 0: population Growth .. The concept of endogenous Growth .. Permanent level e ects .. The case of no R&D .. Outlook .. The casen= 0.. The case of rising life expectancy .. Concluding remarks .. References .. 16911 AK and reduced-form AK models.

7 Consumption taxation. General equilibrium dynamics in the simple AK model .. Reduced-form AK models .. On consumption taxation .. 17412 Learning by investing: two The common framework .. The individual rm .. The individual household .. Equilibrium in factor markets .. The arrow case: <1.. Dynamics .. Two types of endogenous Growth .. Romer s limiting case: = 1; n= 0.. Dynamics .. Economic policy in the Romer case .. Appendix: The golden-rule capital intensity in the Arrow case 19713 Perspectives on learning by doing and learning by Learning by doing* .. The case: <1in ( ) .. The case = 1in ( ) .. 206c Groth, Lecture Notes in Economic Growth , (mimeo) Disembodied learning by investing*.

8 The Arrow case: <1andn 0.. The Romer case: = 1andn= 0.. The size of the learning parameter .. Disembodied vs. embodied technical change* .. Disembodied technical change .. Embodied technical change .. Embodied technical change and learning by investing . Static comparative advantage vs. dynamics of learning by doing* A simple two-sector learning-by-doing model .. A more robust speci cation .. Resource curse? .. Robustness issues and scale e ects .. On terminology .. Robustness of simple endogenous Growth models .. Weak and strong scale e ects .. Discussion .. Appendix .. References .. 23414 The lab-equipment Overview of the economy .. The sectorial production functions.

9 National income accounting .. The potential for sustained productivity Growth .. Households and the labor market .. Firms behavior .. The competitive producers of basic goods .. The monopolist suppliers of intermediate goods .. R&D rms .. General equilibrium of an economy satisfying (A1) .. The balanced Growth path .. Comparative analysis .. 25515 Stochastic erosion of innovator s monopoly The three production sectors .. Temporary monopoly .. The reduced-form aggregate production function .. The no-arbitrage condition under uncertainty .. The equilibrium rate of return when R&D is active .. Transitional dynamics* .. 266c Groth, Lecture Notes in Economic Growth , (mimeo) Long-run Growth .

10 Economic policy .. Appendix .. 27116 Natural resources and Economic Classi cation of means of production .. The notion of sustainable development .. Renewable resources .. Non-renewable resources .. The DHSS model .. Endogenous technical progress .. Natural resources and the issue of limits to Economic Growth . Appendix: The CES function .. Literature .. 29617 Addendum to Chapter Skill-biased technical change in the sense of Hicks: An example Capital-skill complementarity .. Literature .. 301A Appendix: Errata303c Groth, Lecture Notes in Economic Growth , (mimeo) is a collection of earlier separate Lecture Notes in Economic Notes have been used in recent years in the course Economic Growthwithin the Master s Program in Economics at the Department of Economics,University of with the earlier versions of the Lecture Notes some chaptershave been extended and in some cases divided into several chapters.