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MSc Economics

Year of entry: 2020

Course unit details:
Advanced Topics in Development Economics

Unit code ECON61212
Credit rating 15
Unit level FHEQ level 7 – master's degree or fourth year of an integrated master's degree
Teaching period(s) Semester 2
Offered by Economics
Available as a free choice unit? Yes

Overview

 

 

Aims

The aim of the course is to provide rigorous training on the current research on a number of issues in development economics and growth theory: demographic transition and growth; public capital and growth; gender equality and growth; and middle-income traps. To do so presentations will dwell on a series of micro-founded, fully-articulated models, based on the overlapping generations (OLG) approach. The intuition behind key mathematical results, and their relevance for the real world, will be systematically emphasized.

Learning outcomes

Upon completion of this course, successful students will be able to:

 

a) show a clear understanding of the current literature in development economics and economic growth, both empirical and analytical, on demographic transition and growth, public capital and growth, gender equality and growth; and middle-income traps;

 

b) evaluate critically some of the results in the literature, particularly those related to the role of public capital in the growth process, and the determinants of women’s labor force participation;

 

c) develop simple OLG models of their own, from which they will be able to derive original results, and acquire the analytical skills that may serve them eventually should they choose to pursue a PhD Program in Economics.

Syllabus

The course will consist of 10 mandatory lectures.

Topic 1 (Lectures 1 to 3) – Demographic Transition, Occupational choice, and Development Traps

These lectures will present a two-period OLG model with heterogeneous labor and exogenous growth, following a brief general introduction to this class of models. The model will be used to illustrate the links between occupational choice, the distribution of skills in the labor force, and demographic forces taking the form of fertility changes. After reviewing the stylized facts associated with the demographic transition, and describing the structure of the model (behavioral functions and market equilibrium conditions), its solution and dynamic properties will be analysed.

Topic 2 (Lectures 4 and 5) – Public Capital and Growth

These lectures will present a two-period OLG model focusing on the role of public capital (core infrastructure) in economic growth. It will consider first conventional productivity channels. New channels, including an impact on adjustment costs associated with private investment; an effect on the durability of private capital; an effect on the production (and availability) of health and education services; and network effects of infrastructure will be discussed next.

Topic 3 (Lectures 6 to 8) – Women’s Time Allocation, Gender Inequality, and Growth

These lectures will discuss how women’s time allocation changes in the process of development and how such changes affect growth and gender inequality over time. It will begin with some background evidence on gender disparities in developing countries. It will then examine factors affecting women’s time allocation, with particular attention to the role of infrastructure. A gender-based OLG model (which builds on the model presented in Topic 2) will be presented and used to analyse the impact of public policy on women’s time allocation (in terms of time devoted to household chores and market activity), growth, and gender inequality.

Topic 4 (Lectures 9 and 10) – Middle-Income Traps

These lectures will discuss the causes and policies to escape from, a middle-income trap, generally characterized by a sharp deceleration in growth, following a period of sustained increases in per capita income. It will begin with some background evidence on the nature of middle-income traps. It will then provide a taxonomic review of the causes of these traps. It will present a simple OLG model with two types of infrastructure to illustrate how equilibrium traps, characterized by a misallocation of talent, can emerge. The implications for public policy will also be examined.

 

Teaching and learning methods

Lectures

Assessment methods

Method Weight
Written exam 100%

Recommended reading

Prior to the start of the class, students are encouraged to review key mathematical formulas provided in the following document:

Agénor, Pierre-Richard, Mathematical Formulas and Dynamic Optimization Techniques, unpublished, University of Manchester (January 2019).

This document will be uploaded on the course website a week before the course starts.

 

Study hours

Scheduled activity hours
Lectures 20
Independent study hours
Independent study 130

Teaching staff

Staff member Role
Pierre-Richard Agenor Unit coordinator

Additional notes

Timetable
Lectures: Wednesday 11-1pm

 

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