Department of Economics,
University of Copenhagen
Supplementary material for Economic Growth
Testing growth theories
Various themes New! J. Tirole:
, Princeton Univ. Press, 2017. Economics for the
Common Good H. Llavador and
, Harvard Univ. Press,
Sustainability for a warming planet G. Wagner and M. L. Weitzman:
, Princeton Univ.
The Economic Consequences of a Hotter Planet
A beautiful updated overview of facts:
Slides from C. I. Jones:
The Facts of Economic Growth ,
2015, version 2.0. Supplements to Acemoglu's textbook
Acemoglu's lectures at MIT fall 2011.
Discussion of the colonial origins of comparative developmentDavid Albouy: The colonial origins of comparative development: An empirical i nvestigation:
AER, 2012, vol. 102 (6), 3059-3076
Response to Albouy's criticism. By Acemoglu, Johnson,
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
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
Danny Quah, 1996, The
Invisible Hand and the Weightless Economy, Occasional Paper 12, Centre for
Economic Performance, LSE, London, May 1996.
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,
Paper No. 5774, Februar 2016.
Recent Danish research on returns to R&D in the private sector and knowledge spillovers
(in Danish), see the
Joseph Stiglitz on
How intellectual Property Rights Reinforces Inequality,
New York Times,
July 14, 2013.
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),
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):
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,
, 119, June, 2009, F374-F403.
Perspective on national income and growth accounting, see Nordhaus,
2007, Two centuries of productivity growth in computing,
Econ. History, vol. 67 (1), 128-159
accounting vs. causes of growth, see, e.g., Aghion and Howitt
Income and wealth distribution (time series, theory,
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,
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, Dabla-Norris et al., 2015,
Causes and consequences of income inequality: A global perspective,
IMP Staff Discussion Note, June 2015.
Deaton, A., 2013,
Princeton University Press. Review by K. Rogoff. The Great
Escape: Health, Wealth, and the Origins of Inequality,
Perotti, R., 1996, Growth, Income Distribution,
and Democracy: What the Data Say, Journal of Economic Growth 1,
A sociological perspective: Kate Pickett and Richard Wilkinson:
Penguin Bookshop, 2010.
The Spirit Level: Why Equality is Better for Everyone,
Recent research (The Equality Trust).
income inequality and economic growth.
World Top Incomes Database
Stiglitz, J. E., 2012,
Norton: New York.
The Price of inequality: How today's divided society endangers our
A brief note by J. E. Stiglitz on
Mauritius Miracle, Project Syndicate, 2011.
Uzawa, H. (2005),
Economic Analysis of Social Capital,
Piketty and related debates:
Thomas Piketty and Emanual Saez, 2013, " Why
the 1% should pay tax at 80%", The Guardian,
24 October 2013.
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.
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"
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
. Brookings Papers on Economic Activity. Conference draft,
March 19-20, 2015
Solow: Piketty is right,
New Republic, April 22,
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
Piketty in , where Piketty among many
other things says:
Potemkim Review, January 2015
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."
"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),
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,
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
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
A brief note on the Solow growth model
interview with Solow, 2002, not directly about this, but about pretty much
everything. See also McQuinn and Whelan (2007)
Economic growth and the
Global warming Some
Arrow, K. J. (2007), Global Climate Change: A Challenge to Policy, The
Economists' Voice 4, Iss. 3, Article 2, 1-5.
MIT Press, April 2015. Why are we waiting?
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
Sinn, H.W. (2008).
Groth, C., and P. Schou (2007),
Growth and Non-renewable Resources: The Different
Roles of Capital and Resource Taxes,
, vol. 53, no. 1, 80-98. Journal of Environmental Economics and
Green GDP issues
Commission on the Measurement of Economic Performance and Social Progress:
I n charge of the commission:
Joseph Stiglitz, Amartya Sen, and Jean-Paul
Fitoussi. Some reports:
Measurement of Economic Performance and Social Progress Revisited - Reflections
and Overview, September, 16, 2009.
, The New Press.
Stiglitz, J.E., A. Sen, and
J.-P. Fitoussi (2010),
Mis-measuring our lives
Economic growth and natural
Bretschger, L. (1999), Edward Elgar Publishing: Cheltenham. Growth
Theory and Sustainable Development.
Groth, C. (2007),
Perspective on Non-renewable Resources. In: L. Bretschger and S.
Smulders, eds., Sustainable Resource Use and Economic Dynamics,
Springer: Dordrecht, pp. 127-163.
Dany Rodrik, 2005,
Growth Strategies. Chapter 14
in , ed. by Handbook of Economic Growth, vol. 1A
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
Paul Romer at CAGE, June 2011.
Economic growth and economic policyRecent books (by Rodrik, Stiglitz,
Brynjolfsson & McAfee,
Norton. Lof and Malinen (2014):
Determinants of the growth and sovereign debt correlation.
The other side of openness:
From resource curse to resource blessing
Historical development and economic
growth Nathan Nunn (2014), Historical development. In:
vol. 2A, ed. by P. Aghion and S. N.
Durlauf, Elsevier, 347-402.
Handbook of Economic Growth, S. Ogilvie and A. W. Carus (2014), Institutions
and economic growth in historical perspective. In:
vol. 2A, ed. by P. Aghion and S. N.
Durlauf, Elsevier, 403-513.
Handbook of Economic Growth,
Economic historyGregory 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. and Paul Sharp
Karl-Gunnar Persson , 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
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.
Brynjolfsson, E., and A. McAfee, 2014, The Second Machine Age, Norton.
Prospects for the future
up to date)
Testing growth theories: Papers
using or discussing
time series methods
Eberhardt, M., and F. Teal, 2011, Econometrics for grumblers: A
new look at the literature on cross-country growth empirics,
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,
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,
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,
Cheung, Y.-W., and A.G. Pascual, 2004, Testing for output convergence: A
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
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,
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,
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
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,
Evolutionary Economics, vol. 9, 135-154.
Evans, P. (1998), .......,
Journal of Economic Literature, vol. 36,
no. 4, 2192-2193.
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,
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.
On the arithmetic growth of life expectancy,
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
A useful internet source:
Recommended Math Manual:
K. Sydsaeter, A. Strom and P. Berck,
Economists' Mathematical Manual, 4th ed. (or later),
Springer Verlag, 2004.
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
writing a BA or MA thesis: some advice.
Supplementary material for