INTRODUCTION
"Since the 1700s, increases in average living standards became a permanent feature of economic life in many countries. This was associated with the emergence of a new economic system called capitalism, in which private property, markets and firms play a major role. Under this new way of organizing the economy, advances in technology and specialization in products and tasks raised the amount that could be produced in a day’s work. This process, which we call the capitalist revolution, has been accompanied by growing threats to our natural environment, and by unprecedented global economic inequalities." (Core Econ, Chapter 1)
Today we will explore the idea of economic growth and both absolute and relative living standards. We will discuss ideas such as nominal GDP, real GDP, growth rates, and purchasing power parity as ways of measuring economic well-being. We will also begin to explore the causes of economic growth in addition to the barriers to it.
As today is the first class of the semester, there is no homework due today.
Choose five countries whose economies you would like to focus on for the entire semester. In class I will pick people randomly to choose a country. Once your first choice is taken, you will have to move to your second choice, etc. Hopefully, everyone will get one of their top five choices. Almost all of your assessments this semester will focus on this country, so choose wisely.
Read the following sections in Chapter 1 ("The Capitalist Revolution") of Core Econ: Introduction, Section 1.1 (Income Inequality), Section 1.2 (Measuring Income and Living Standards), and Section 1.3 (History's Hockey Stick: Growth in Income).
Share a question that you would like to discuss as part of our Socratic Discussion today.
Participate in a Socratic Discussion. This rubric will be used to evaluate your blog post and discussion.
Read the following sections in Chapter 1 ("The Capitalist Revolution") of Core Econ: 1.4 The Permanent Technological Revolution.
Podcast: In this podcast, Thomas Piketty of the Paris School of Economics and author of Capital in the Twenty-First Century talks to Econtalk host Russ Roberts about the book. The conversation covers some of the key empirical findings of the book along with a discussion of their significance.
Podcast: In this podcast, Daron Acemoglu, the Elizabeth and James Killian Professor at the Massachusetts Institute of Technology, talks with EconTalk host Russ Roberts about his new paper co-authored with James Robinson, "The Rise and Fall of General Laws of Capitalism," a critique of Thomas Piketty, Karl Marx, and other thinkers who have tried to explain patterns of data as inevitable "laws" without regard to institutions. Acemoglu and Roberts also discuss labor unions, labor markets, and inequality.
Podcast: In this podcast Morten Jerven of Simon Fraser University, author of Poor Numbers, talks with EconTalk host Russ Roberts about the quality of data coming out of Africa on income, growth, and population. Jerven argues that the inconsistency of the numbers and methodology both across countries and within a country across time, makes many empirical studies of African progress meaningless. The conversation closes with a discussion of what might be done to improve data collection in poor countries.
Podcast: In this podcast, Gabriel Zucman of the University of California, Berkeley talks with EconTalk host Russ Roberts about his research on inequality and the distribution of income in the United States over the last 35 years. Zucman finds that there has been no change in income for the bottom half of the income distribution over this time period with large gains going to the top 1%. The conversation explores the robustness of this result to various assumptions and possible explanations for the findings.
TedTalk: Richard Wilkinson on how income inequality harms society
TedTalk: Daniel Ariely on whether equality of income is desirable
Spreadsheet: Global Income Data by Country
Speech: Robert Kennedy's speech questioning how we measure economic well-being
UN Database: National Accounts Main Aggregates Database
Video: Thomas Piketty and James Heckman explain why data is fundamental to their work
Readings (Sources of Economic Growth)
Human Capital
Readings (Consequences of Economic Growth)
Readings (Barriers to Economic Growth)
Readings (Growth and Development Models)
Readings (Growth and Development Strategies)
Commanding Heights: Click the link for resources related to this PBS documentary. We may watch a few clips from the video in class. You can watch the whole series by streaming it online, if you're interested by clicking here. It's a really engaging and relatively contemporary view of development and globalization.