Course description
This course aims to provide an intermediate-level study of economic growth theory for studying the developing economies. Theoretical, empirical and policy frameworks are studied to analyze topical issues and problems in economic growth and sustainable development.

We study and analyze the developing economies from the perspectives of growth theory, determination of economic growth, the growth record, industrial organization and corporate governance, financial development and instability, labor and employment, education, inequality and public policy, democracy and institutional infrastructure, globalization and international aid.

Topics to be covered include:
- The Neo-classical Model and Convergence of Income
- Coordination and Persistent Poverty
- Credit, Inequality in the Divergence of Incomes
- The Psychology of Poverty
- Health and Nutrition
- The Role of Institutions in Development
- Political Economy and Corruption
- Property Rights and Investment Incentives
- International Aid and Economic Growth
- Microfinance
- Credit, Saving and Insurance
- Land Redistribution
- Role of Media and Policy in Development
- Social Networks and Social Capital
- Role Regulation in Development
- Intrahousehold Allocations and Gender
- Technology Adoption and Learning

Each lecture will be structured to provide the necessary theory to understand the topic as well as an empirical assessment of its relevance. Each class focuses on an academic journal article and is designed to help you to explore the topic in greater detail.

Textbook
Ray, D., Development Economics, Princeton University Press (1998).
Eichengreen, B., W. Lim, Y. Park, D. Perkins, 2015, The Korean Economy: From a Miraculous Past to a Sustainable Future, Harvard East Asian Monographs, Harvard University Press.
Jones, C. and D. Vollrath, 2013, Introduction to Economic Growth, 3rd Ed., Norton & Company.

Evaluation
Assignments: 20%. Midterm Exam: 30%. Final Exam: 30%.
Term Project: 10%. Attendance: 10%.

Course Outline

1. Introduction: Facts about Development
- Banerjee, Abhijit V. and Esther Duflo (2006), “Economic Lives of the Poor, Journal of Economic Perspectives, Vol. 21 (1), pp. 141-167.
- Besley, Timothy and Robin Burgess (2003). "Halving Global Poverty." Journal of Economic Perspectives 17, no. 3: 3-22.
- World Bank (2000). “World Development Report 2000/2001: Attacking Poverty.” Overview, pp. 1-12.
http://siteresources.worldbank.org/INTPOVERTY/Resources/WDR/overview.pdf
- Ray, D.: Chapter 2.
- Rosling, Hans (2007). “New Insights on Poverty and Life Around the World.” TED Talks.

2. Poverty, Development and Growth: Overview
- Ray, D. (1998) "Development Economics" Chapter 2
- Besley, T. and Burgess R. (2003) “Halving Global Poverty”, Journal of Economic Perspectives 17: 3-22.
- Deaton, A.S (2007) Income, Aging, Health and Wellbeing Around the World: Evidence from the Gallup World Poll NBER Working Paper No. 13317.
- Chen, S and Ravallion, M ‘The developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty’ Quarterly Journal of Economics, 125(4) 1577-1625
- Stevenson, B and Wolfers, J ‘Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox’ Brookings Papers on Economics Activity
- Dollar, D. and Kraay, A. “Growth Is Good for the Poor," Journal of Economic Growth, vol. 7(3), pages 195-225

3. Growth Theories: Factor Accumulation
Ray, D. (1998) Chapter 3
- Young.A (1995) “The Tyranny of Numbers: Confronting the Reality of the East Asian Growth Experience”, Quarterly Journal of Economics 110: 641‐80.
- Mankiw N.G., Romer D. and D.Weil (1992): "A contribution to the Empirics of Economic Growth" Quarterly Journal of Economics.

4. Growth Theories: Human Capital, Technical Progress and Endogenous Growth
- Ray, D. (1998) Chapter 4
- Hsieh, C-T and Klenow, P (2010) “Development Accounting” American Economic Journal: Macroeconomics, 2(1), 207-223.
- Aghion.P and P.Howitt (2005) “Growth with Quality-Improving Innovations: An Integrated Framework” Handbook of Economic Growth, Vol 1 part A, 67-11
- Durlauf, Steven N. & Johnson, Paul A. & Temple, Jonathan R.W., 2005. "Growth Econometrics," Handbook of Economic Growth, Vol 1, Ch 8, 555
- Aghion, P., Howitt, P. and Mayer Foulkes, D (2005) "The Effect of Financial Development on Convergence: Theory and Evidence", Quarterly Journal of Economics

5. Growth Theories: Inequality and Growth
Ray, D. (1998) Chapter 6, 7(pp 220-241)
- Banerjee, Abhijit V & Duflo, Esther, 2003. " Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-99, September.
- Galor O. and J.Zeira (1993): "Income Distribution and Macroeconomics" Review of Economic Studies
- Easterly, W. (2007) "Inequality does cause under development: Insights from a new instrument" Journal of Development Economics

6. Growth Theories IV: Coordination Failures * Ray, D. (1998) Chapter 5
- Munshi, Kaivan & Myaux, Jacques, 2006. "Social norms and the fertility transition," Journal of Development Economics, Elsevier, vol. 80(1), pages 1-38, June.
- Murphy K, A.Shleifer and R.Vishny (1989): "Industrialisation and the Big Push" Journal of Political Economy
- Bandiera,O and Rasul,I, (2006) "Social Networks and Technology Adoption in Northern Mozambique" Economic Journal

7. Domestic Policies and Efficient Resource Allocation
- Hall, R. and C. Jones (1999), "Why Do Some Countries Produce So Much More Output per Worker than Others?", Quarterly Journal of Economics
- Isham, J. and D.Kaufman (1999), "The Forgotten Rationale for Policy Reform: The Productivity of Investment Projects", Quarterly Journal of Economics
- *Khwaja, A. and Mian, A. (2005) "Do Lenders Favor Politically Connected Firms?" Quarterly Journal of Economics

8. Education and Human Capital
- Duflo, Esther (2001) "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from and Unusual Policy Experiment" American Economic Review 91(4).
- Duflo, Esther and Rema Hanna (2005). “Monitoring works: getting teachers to come to school,” mimeo, MIT.
- Duflo, Esther, Pascaline Dupas and Michael Kremer (2007). "Peer Effects, Pupil-Teacher Ratios, and Teacher Incentives: Evidence from a Randomized Evaluation in Kenya" mimeo Department of Economics, MIT.
- Banerjee, Abhijit V., Shawn Cole, Esther Duflo, and Leigh Linden (2007). "Remedying Education: Evidence from Two Randomized Experiments in India." Quarterly Journal of Economics 122, no. 3: 1235-1264.
- Kremer, Michael (2003). “Randomized Evaluations of Educational Programs in Developing Countries: Some Lessons”. American Economic Review Papers and Proceedings, 93(2), 102-106

Midterm Exam

9. Health and Nutrition
- Ray, Chapter 8 (focus on pp. 272-272 for the theoretical model) and Chapter 13 (pp. 489-504).
- Deaton (1997): Chapter 4.
- Subramanian, S. and Angus Deaton (1996). "The Demand for Food and Calories" Journal of Political Economy 104 (1).
- Thomas, D., et al. (2004). “Causal Effect of Health on Labor Market Outcomes: Evidence from a Random Assignment Iron Supplementation Intervention,” California Center for Population Research, Working Paper 022-04.

10. Finance and Micro-Credit
- Ray (1998) Chapter 14.
- Aleem, Irfan (1990). “Imperfect Information, Screening and the Costs of Informal Lending: A Study of a Rural Credit Market in Pakistan,” World Bank Economic Review, 3, 329-349.
- Banerjee, Abhijit, Esther Duflo, Rachel Glennerster and Cynthia Kinnan (2010). "The Miracle of Microfinance," MIT mimeo.
- Karlan, Dean and Jonathan Zinman (2010). "Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila." Yale mimeo.
- Besley, Timothy (1995). "How do Market Failures Justify Interventions in Rural Credit Markets", World Bank Research Observer, 9 (1).
- Morduch, Jonathan (1999). "The Microfinance Promise", Journal of Economic Literature, 37(4), 1569-1614.
- Burgess, Robin, and Rohini Pande (2005). "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment." American Economic Review 95, no. 3: 780-795.

11. Institutions and Property Rights: Macro Evidence
- Acemoglu.D, S.Johnson, and J.A.Robinson (2001) “The Colonial Origins of Comparative Development: An Empirical Investigation”, American Economic Review 91: 1369-401.
- Glaeser.E, R.LaPorta, F.Lopez-de-Silanes, and A.Shleifer (2004) "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303,
- B.Jones and B.Olken (2005) "Do Leaders Matter? National Leadership and Growth since WW2" Quarterly Journal of Economics

12. Property Rights: Micro Evidence
- Field.E (2007) “Entitled to Work: Urban Property Rights and Labor Supply in Peru”, Quarterly Journal of Economics 122: 1561-1602.
- Johnson.S, John.McMillan, and C.Woodruff (2002) “Property Rights and Finance”, American Economic Review 92: 1335-56.
- Besley.T (1995) “Property Rights and Investment Incentives: Theory and Evidence from Ghana”, Journal of Political Economy 103: 903-37.

13. Corruption
- Easterly, William (2001). “Corruption and Growth” in The Elusive Quest for Growth, Cambridge, MA: MIT Press, Ch. 12.
- Shleifer, Andrei and Robert W. Vishny (1993). “Corruption,” The Quarterly Journal of Economics, 108(3).
- The Road to Hell is Unpaved,” The Economist, December 19, 2002
- India’s Corruption Blues,” The Economist, March 24, 2001
- Olken, Benjamin A. (2007). "Monitoring Corruption: Evidence from a Field Experiment in Indonesia." Journal of Political Economy 115, no. 2: 200-249.
- Mauro, Paolo (1995). “Corruption and Growth,” Quarterly Journal of Economics, 110 (3), 681-712.
- Fisman, Raymond (2001). “Estimating the Value of Political Connections”, American Economic Review, 91(4), 1095-1102.

14. Technology and Learning
- Ellison, Glen and Drew Fudenberg (1993). “Rules of Thumb for Social Learning,” Journal of Political Economy, 101(4), 612-643.
- Conley, Timothy and Christopher Udry (2008). “Learning about a New Technology: Pineapple in Ghana,” American Economic Review, forthcoming.
- Miguel, Edward and Michael Kremer (2004). “Worms: identifying impacts on education and health in the presence of treatment externalities”, Econometrica, 72(1), 159-217.
- Duflo, Esther, Michael Kremer, and Jonathan Robinson (2008). "How High Are Rates of Return to Fertilizer? Evidence from Field Experiments in Kenya." American Economic Review 98, no. 2: 482-488.

15. International Aid
- Burnside C. and Dollar D. (2000) "Aid, Policies, and Growth," American Economic Review.
- Easterly, W., Levine, R. and Roodman, D. (2004) "New Data, New Doubts: A Comment on Burnside and Dollar's "Aid, Policies, and Growth" American Economic Review, June
- Kuziemko.I and E.Werker (2006) “How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations,” Journal of Political Economy 114: 905-30
- Hsieh, C and Moretti, E. (2006), "Did Iraq Cheat the United Nations? Underpricing, Bribes, and the Oil for Food Program". The Quarterly Journal of Economics, vol. 121, Issue 4, pages 1211-1248

Term Projects: Presentation

Final Exam