Development Macroeconomics

Language

English

Main themes

This course studies macroeconomic aspects of economic development, growth, and inequality with a focus on theoretical analyses.
The following subjects are studied:
Part 1: Economic development and structural change

• The evolution of income differences across and within countries (empirical)
• The diffusion of technologies towards developing countries
  • A model of technology diffusion
    • Endogenous distance to the technological frontier
    • Appropriateness of technologies
• Consumer demand and structural change
  • Stone-Geary preferences and Engel curves
  • Structural change and endogenous growth in a two-sector model
• Dual economy models
  • Urbanization
  • Formal and informal activities
• The O-ring theory of economic development
• Coordination failures
  • Rent-seeking and endogenous career choices
  • Aggregate demand externalities

Part 2: Inequality and growth

• The neoclassical theory of distribution
  • Robotization and the labor income share
• Capital market imperfections, inequality, and growth
  • One-period lifetime with bequest model
    • Decreasing returns to individual investment
    • Increasing returns and investment indivisibilities
• Factor income distribution and growth
  • Infinite horizon (Ramsey)
  • Overlapping generations
  • Growth, distribution, and political economy
• Personal income distribution and growth
  • Homothetic preferences
  • Consumption indivisibilities and demand-driven innovation

Learning outcomes

At the end of this learning unit, the student is able to :
1	The goal of this course is to improve students' understanding of the above-mentioned topics and should learn to rigorously address various related issues.

Content

The course consists of lectures in which the topics are presented (by the lecturer) and discussed. There are some exercises that have to be prepared at home before being solved in class.
The goal of this course is to improve student’s understanding of the above-mentioned topics and to enable them to rigorously address various related issues.

Evaluation methods

There is a final written exam at the end of the course

Other information

Course in charge of Unamur BUT taught at UCLouvain
Prerequisites: Undergraduate Macroeconomics course
Reception: 2 hours per week

Bibliography

• Several chapters from the following books:
  1. “Introduction to Modern Economic Growth”; Daron Acemoglu; Princeton University Press; 2009
  2. “Income Distribution in Macroeconomic Models”; Gioseppe Bertola, Reto Föllmi, Josef Zweimüller; Princeton University Press; 2006 
• Various papers indicated during the course

Teaching materials

• Diapositives (en anglais) et lectures complémentaires - Lecture slides and complementary readings.

Faculty or entity

ECON