Christian Groth,
Department of Economics,
University of Copenhagen

Supplementary material for Economic Growth

Various themes    Testing growth theories    Other material

Various themes

New!
J. Tirole and O. Blanchard: Economics for the Common Good, Princeton Univ. Press, 2017.

H. Llavador and J. Roemer: Sustainability for a warming planet, Harvard Univ. Press, 2015.
G. Wagner and M. L. Weitzman: Climate Shock. The Economic Consequences of a Hotter Planet, Princeton Univ. Press, 2015.

A beautiful updated overview of facts:
C. I. Jones: The Facts of Economic Growth, 2015, version 2.0.

Supplements to Acemoglu's textbook
Slides from Acemoglu's lectures at MIT fall 2011.

Discussion of the colonial origins of comparative development
David Albouy: The colonial origins of comparative development: An empirical investigation: Comment, AER, 2012, vol. 102 (6), 3059-3076
Response to Albouy's criticism. By Acemoglu, Johnson, and Robinson, AER, 2012, vol. 102 (6), 3077-3110.

Current economic policy

Idle workers + Low Interest rates = Time to rebuild infrastructure, L. H. Summers, The Boston Globe, April 11, 2014.
L. H. Summers, U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the
Zero Lower Bound, Business Economics 49 (2).

NEW: Viktor Slavtchev and Simon Wiederhold, Does the Technological Content of Government Demand Matter for Private R&D? Evidence from US States, American Economic Journal: Macroeconomics, vol. 8 (2): 45–84, 2016.

Abstract:
Governments purchase everything from airplanes to zucchini. This paper investigates the role of the technological content of government
procurement in innovation. In a theoretical model, we first show that a shift in the composition of public purchases toward high-tech products translates into higher economy-wide returns to innovation, leading to an increase in the aggregate level of private R&D. Using
unique data on federal procurement in US states and performing panel fixed-effects estimations, we find support for the model’s
prediction of a positive R&D effect of the technological content of government procurement. Instrumental-variable estimations suggest
a causal interpretation of our findings.

 

Beyond GDP? Welfare across Countries and Time
See paper by C. I. Jones and P. J. Klenow in American Economic Review, vol. 6, no. 9, 2016.

 

Vertical and horizontal innovations

Moore's law: http://en.wikipedia.org/wiki/Moore's_law


Danny Quah, 1996, The Invisible Hand and the Weightless Economy, Occasional Paper 12, Centre for Economic Performance, LSE, London, May 1996.
    Abstract: As modern economies grow, production and consumption shift towards economic value that reside in bits and bytes, and away from that embedded in atoms and molecules. This paper discusses the implications of such changes for the nature of ongoing growth in advanced economies and for the dynamics of earnings and income distributions—polarization, inequality—across people within societies.

 

NEW: Embodied technical change and balanced growth:
Grossman, G., E. Helpman, E. Oberfield, and T. Sampson: Balanced Growth Despite Uzawa, CESifo Working Paper No. 5774, Februar 2016.

Recent Danish research on returns to R&D in the private sector and knowledge spillovers (in Danish), see the Economic Council.

Joseph Stiglitz on patents: How intellectual Property Rights Reinforces Inequality, New York Times, July 14, 2013. Comment.
            Prizes, not patents, Project Syndicate, March 6, 2007.
            Medicine for tomorrow: Some alternative proposals to promote socially beneficial research and development in pharmaceuticals, 2010 (with A. Jayadev), Journal of Generic Medicines, vol. 7, 3, 217–226.
            Stiglitz and Lin, eds., The Industrial Policy Revolution I,IEA Conference Volume 151-1.

Cozzi, G., and S. Galli, 2014, Sequential R&D and blocking patents in the dynamics of growth, J. of Economic Growth, vol. 19, 183-219.

A beautiful website for growth economists (although now not so often updated):
Economic Growth Resources 

An easily accessible description of growth accounting in practice: O'Mahony and Timmer, Output, input and productivity measures at the industry level: The EU KLEMS database, Economic Journal, 119, June, 2009, F374-F403.
Perspective on national income and growth accounting, see Nordhaus, 2007, Two centuries of productivity growth in computing, J. Econ. History, vol. 67 (1), 128-159.
On growth accounting vs. causes of growth, see, e.g., Aghion and Howitt (2007) here.

 


Income and wealth distribution (time series, theory, debate)

 

Distribution, social capital, and economic growth:
Aghion, P., E. Caroli, and C. Garcia-Penalosa, 1999. Inequality and economic growth: The perspective of the new growth theories, Journal of Economic Literature, vol. 37, 1615-1660.
Berg and Ostry, Inequality and unsustainable growth: Two sides of the same coin? IMF Staff Discussuion Note, April 8, 2011.
Cowell, Frank A., 1995, Measuring Inequality, 2. ed., London.
Ostry.J.D., A. Berg, C.G. Tsangarides, 2014, Restribution, inequality, and growth, IMF Staff Discussion Note 1402.
Handbook of Income Distribution, vol. 2A and 2.B, 2014-2015, online here.
Bertola, Foellmi, and Zeimüller, Income distribution in macroeconomic models, 2006.
Dabla-Norris et al., 2015, Causes and consequences of income inequality: A global perspective, IMP Staff Discussion Note, June 2015.
Deaton, A., 2013, The Great Escape: Health, Wealth, and the Origins of Inequality, Princeton University Press. Review by K. Rogoff.
Perotti, R., 1996, Growth, Income Distribution, and Democracy: What the Data Say, Journal of Economic Growth 1, 149-87.

A sociological perspective: Kate Pickett and Richard Wilkinson: The Spirit Level: Why Equality is Better for Everyone, Penguin Bookshop, 2010.
Recent research (The Equality Trust).
OECD on income inequality and economic growth.
The World Top Incomes Database
Stiglitz, J. E., 2012, The Price of inequality: How today's divided society endangers our future, Norton: New York.
A brief note by J. E. Stiglitz on The Mauritius Miracle, Project Syndicate, 2011.

Uzawa, H. (2005), Economic Analysis of Social Capital, Cambridge University Press.

 

Piketty and related debates:
Thomas Piketty and Emanual Saez, 2013, "Why the 1% should pay tax at 80%", The Guardian,

Thomas Piketty, 2014, Capital in the Twenty-First Century, Harvard University Press, 2014. Brief review by Thomas B. Edsall   Comment by Kenneth Rogoff. Comment by Dany Rodrik. Review by Branko Milanovic, World Bank.
Piketty's presentation of the book at CUNY 28/04/2014 and discussion by Stiglitz, Krugman, and Durlauf.
Interview with Krugman on Piketty's book.
DeLong: Mr. Piketty and the “Neoclassicists”: A Suggested Interpretation. May 22, 2014.
Per Krusell, 2014, Is Piketty's "Second Law of Capitalism" fundamental? Vox, with link to Krusell and Smith, WP, June 6, 2014.
Rognlie, M., 2014, A note on Piketty and diminishing returns to capital, WP, MIT.
Rognlie, M., 2015, Deciphering the fall and rise in the net capital share, Brookings Papers on Economic Activity. Conference draft, March 19-20, 2015.

Solow: Piketty is right, New Republic, April 22, 2014.
Solow interview on Equitable Growth (January 14, 2014).

Short version of Solow interview at the Washington Center for Equitable Growth (Nov. 20, 2013).
Summers, L., review of Piketty's Capital in the Twenty-First Century. Excerpt from the response by Piketty concerning the basic neoclassical model and the elasticity of factor substitution . The excerpt is from this interview with Piketty in Potemkim Review, January 2015, where Piketty among many other things says:

"I do not believe in the basic neoclassical model. But I think it is a language that is important to use in order to respond to those who believe that if the world worked that way everything would be fine. And one of the messages of my book is, first, it does not work that way, and second, even if it did, things would still be almost as bad."

Human capital

"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." Chinese proverb.

Jones, B., 2011, Scientific productivity increases with age.
Jones, B., 2015,
The Human Capital Stock: A Generalized Approach, American Economic Review, forthcoming

Psacharopoulos, George, 1994, Returns to investment in education: A global update, World Development, vol. 22 (9), 1325-43.

Sen, Amartya, 1997, Human capital and human capability, World Development, vol. 25 (12), 1959-61.
Temple, J.R.W., 2001, Generalizations that aren't? Evidence on education and growth, European Economic Review, vol. 45, 905-918.

 

A brief note on the Solow growth model
Solow himself is the first to acknowledge that his 1956 model of economic growth is a simple theoretical model of the growth process in a closed economy, not a model of an open economy in a globalized world. The Solow model thus leaves out many aspects of interdependence across countries that are surely important. It is therefore a surprise that it is has played such a prominent role in the empirical cross-country convergence and divergence literature. The Solow model was never meant to be - and is not likely to be - an appropriate model of cross-country growth dynamics. Anyway, here is an interview with Solow, 2002, not directly about this, but about pretty much everything. See also McQuinn and Whelan (2007) here.


Economic growth and the environment

Global warming
Some data.
Some recent papers: http://www.economics-ejournal.org/special-areas/topics/climate-change
Arrow, K. J. (2007), Global Climate Change: A Challenge to Policy, The Economists' Voice 4, Iss. 3, Article 2, 1-5.
John Roemer, http://pantheon.yale.edu/~jer39/climatechange.html
NEW:
R. Stern: Why are we waiting? MIT Press, April 2015.
Groth (2015): Lecture Note on Choice of the Social Discount Rate with an Application to the Climate Change Problem.
 

Time profile of carbon taxation and other dilemmas related to policies against global warming:
Sinn, H.W. (2008).

Groth, C., and P. Schou (2007), Growth and Non-renewable Resources: The Different Roles of Capital and Resource Taxes, Journal of Environmental Economics and Management, vol. 53, no. 1, 80-98.

Green GDP issues
IJoseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi. Some reports:
The Measurement of Economic Performance and Social Progress Revisited - Reflections and Overview, September, 16, 2009.
Stiglitz, J.E., A. Sen, and J.-P. Fitoussi (2010), Mis-measuring our lives
, The New Press.
Economic growth and natural resources

Bretschger, L. (1999), Growth Theory and Sustainable Development. Edward Elgar Publishing: Cheltenham.

Groth, C. (2007), A New-Growth Perspective on Non-renewable Resources. In: L. Bretschger and S. Smulders, eds., Sustainable Resource Use and Economic Dynamics, Springer: Dordrecht, pp. 127-163.

Development policy-making
Dany Rodrik, 2005, Growth Strategies. Chapter 14 in Handbook of Economic Growth, vol. 1A, ed. by P. Aghion and S. Durlauf, Elsevier: Amsterdam. Online at the university library.
Paul Romer's idea of Charter Cities: Paul Romer's talk at TED, July 2009, and an interview with Paul Romer at CAGE, June 2011.

Economic growth and economic policy
Recent books (by Rodrik, Stiglitz,
Lof and Malinen (2014): Determinants of the growth and sovereign debt correlation.

A brief list (2005).
The other side of openness: Tax Justice Network

 

From resource curse to resource blessing
Joseph Stiglitz (2012).

Historical development and economic growth
Nathan Nunn (2014), Historical development. In: Handbook of Economic Growth, vol. 2A, ed. by P. Aghion and S. N. Durlauf, Elsevier, 347-402.
S. Ogilvie and A. W. Carus (2014), Institutions and economic growth in historical perspective. In: Handbook of Economic Growth, vol. 2A, ed. by P. Aghion and S. N. Durlauf, Elsevier, 403-513.

 

Economic history
Gregory Clark, 2008, A Farewell to Alms: A Brief Economic History of the World, Princeton University Press.
Mokyr, J., 2005, Long-term economic growth and the history of technology. Chapter 17 in
Handbook of Economic Growth, vol. 1B, ed. by P. Aghion and S. Durlauf, Elsevier: Amsterdam. Online at the university library.
Karl-Gunnar Persson
and Paul Sharp, 2015, An Economic History of Europe. Knowledge, institutions and growth, 600 to the present. Cambridge Univ. Press: Cambridge (UK). Second edition.

The very long run
Links to historical time series
here.
 

Technology history
Ruttan, V. W., Technology, Growth, and Development: An Induced Innovation Perspective, Oxford University Press, 2001.
Smil, V., 2003, Energy at the crossroads. Global perspectives and uncertainties, Cambridge Mass.: MIT Press.

Prospects for the future
Brynjolfsson, E., and A. McAfee, 2014, The Second Machine Age, Norton.

 

Testing growth theories: Papers using or discussing time series methods
(not quite
up to date)

2011

Eberhardt, M., and F. Teal, 2011, Econometrics for grumblers: A new look at the literature on cross-country growth empirics, Journal of Economic Surveys, vol. 25 (1), 109-155.

2010 or earlier

Ang, J. B., and J. B. Madsen, 2010,   Can second-generation endogenous models explain the productivity trends in Asian miracle economies, Review of Economics and Statistics (forthcoming).

Attfield, C., and J. R.W. Temple, 2010, Balanced growth and the great ratios: New evidence for the US and UK, Journal of Macroeconomics, vol. 32, 937-956.

Bradley, M.D., and D.W. Jansen, 1995, Unit roots and infrequent large shocks: New international evidence on output growth, Journal of Money, Credit, and Banking, vol. 27, no. 3, 876-893.

Bernard, A., and Durlauf, S., 1995, Convergence in international output, Journal of Applied Econometrics, vol. 10, 97-108.

Ben-David, D., and D.H. Papell, 1995, The great wars, the great crash, and steady state growth: Some new evidence about an old stylized fact, Journal of Monetary Economics, vol. 36, 453-475.

Bond, A, S. Leblebicioglu, and F. Schiantarelli, 2010, Capital accumulation and growth: A new look at the empirical evidence, Journal of Applied Econometrics, vol. 25, 1073-1099.

Cellini, R., 1997, Implications of Solow's growth model in the presence of a stochastic steady state, Journal of Macroeconomics, vol 19, no. 1, 135-153.

Cheung, Y.-W., and A.G. Pascual, 2004, Testing for output convergence: A re-examination, Oxford Economic Papers, vol. 56, 45-63.

Datta, A., 2003, Time-series tests of convergence and transitional dynamics, Economics Letters, vol. 81, 233-240.

D'Adda, C., and A.E. Scorcu, 2003, On the time stability of the output-capital ratio, Economic Modelling, vol. 20, 1175-1189.

Evans, P., 1998, Using panel data to evaluate growth theories, International Economic Review, vol. 39, no. 2, 295-306.

Framroze, Niels M., K. Juselius, and F. Tarp, 2014, The Long-Run Impact of Foreign Aid in 36 African Countries: Insights from Multivariate Time Series Analysis, Oxford Bulletin of Economics and Statistics, vol. 76 (2), 153-184.

Ha, J., and P. Howitt, 2007, Accounting for trends in productivity and R&D: A Schumpeterian critique of semi-endogenous growth theory, Journal of Money, Credit, and Banking, vol. 39, no. 4, 733-774.

Islam, Nazrul, 2003, What have we learnt from the convergence debate? Journal of Economic Surveys 17, 3,309-362.

 

Jones, C. I., 1995a, Time series tests of endogenous growth models, Quarterly Journal of Economics, vol. 110, 495-525.

Kocherlakota, N., and K.-M. Yi, 1997, Is there endogenous long-run growth? Evidence from the United States and the United Kingdom, Journal of Credit, Money, and Banking, vol. 29, no. 2, 235-262.

Lau, S.-H. P., 2008, Using an error-correction model to test whether endogenous long-run growth exists, Journal of Economic Dynamics and Control, vol. 31, 648-676.

Laincz, C.A., and P.E. Peretto, 2006, Scale effects in endogenous growth theory: An error of aggregation not specification, Journal of Economic Growth, vol. 11, 263-288.

Kim, S., and H. Lim, 2004, Does the Solow residual for Korea reflect pure technology shocks? Working paper (is more related to business cycle theory than to growth theory).

Madsen, J. B., 2008, Semi-endogenous versus Schumpeterian growth models: Testing the knowledge production function using international data, Journal of Economic Growth, vol. 13, 1-26.

Madsen, J.B., J.B. Ang, and R. Banerjee, 2010, Four centuries of British economic growth: The roles of technology and population, MPRA Paper no. 23510.

Mellander, E., A. Vredin, and A. Warne, 1992, Stochastic trends and economic fluctuations in a small open economy, Journal of Applied Econometrics, vol. 7, 369-394.

Mills, T.C., and N.F.R. Crafts, 2000, After the golden age: A long-run perspective on growth rates that speeded up, slowed down and still differ, The Manchester School, vol. 68, no. 1, 68-91.

Jones, Charles, I., 1995b, Time series test of endogenous growth models. Quarterly Journal of Economics 110, no. 2, 495-525.

Romero-Avila, D., 2006, Can the AK model be rescued? New evidence from unit root tests with good size and power, Topics in Macroeconomics, vol. 6, no. 1, article 3.

Sarno, L., 2001, Nonlinear dynamics, spillovers and growth in the G7 economies: An empirical investigation, Economica, vol. 68, 401-426.

Venturini, F., 2007, The long-run impact of ICT, Empirical Economics, vol. 37, no. 3, 497-515.

Venturini, F., 2010a, Product variety, product quality, and evidence of Schumpeterian endogenopus growth: A note.

More growth empirics

Bernanke, B.S., and R.S. Gürkaynak, 2001, Is growth exogenous? Taking Mankiw, Romer, and Weil seriously, NBER Macroeconomics Annual, vol. 16, 11-57. With data here.

Capolupo, R. 2009, The New Growth Theories and their empirics after twenty years, Economics, vol. 3, no. 1, 1-72.

Dinopoulos, E., and P. Thompson, 1999, Reassessing the empirical validity of the human-capital augmented neoclassical growth model, Journal of Evolutionary Economics, vol. 9, 135-154.

Evans, P. (1998), ......., Journal of Economic Literature, vol. 36, no. 4, 2192-2193.

Jones, Charles I., 1995b, R&D-based Models of Economic Growth, Journal of Political Economy, 103.

Jones, C. I., and P. M. Romer, 2010, The new Kaldor facts: Ideas, institutions, population, and human capital, American Economic Journal. Working paper.

Kremer, M., 1993, Population Growth and Technological Change: One Million B.C. to 1990, Quarterly Journal of Economics 108, no. 3, 681-716.

León-Ledesma, M.A., P. McAdam and A. Willman, 2010, Identifying the Elasticity of Substitution with Biased Technical  Change, American Economic Review, 100, 130-1367.

Venturini, F., 2010b, Looking into the black box of Schumpeterian growth theories: An empirical assessmant of R&D races. Universita di Perugia, mimeo.

Other material

On the arithmetic growth of life expectancy, look here. Notice the slope in Fig. 1: For every ten years, female life expecrtancy in the record-holding country increases two and a half year!

Lecture notes in economics, econometrics and mathematics   

    List and access here

Math resources

    A useful internet source: WolframMathWorld

    Recommended Math Manual:
        K. Sydsaeter, A. Strom and P. Berck, Economists' Mathematical Manual, 4th ed. (or later), Springer  Verlag, 2004.

Useful research-oriented Dictionary of Economics

    The New Palgrave Dictionary of Economics (online via the library of Dept. of Economics).

About student seminars and writing papers

For students writing a BA or MA thesis: some advice.

Miscellaneous

Supplementary material for Macroeconomics