Summary: "What happens in the economy depends on what millions of people do, and how their decisions affect the behaviour of others. It would be impossible to understand the economy by describing every detail of how they act and interact. We need to be able to stand back and look at the big picture. To do this, we use models. To create an effective model we need to distinguish between the essential features of the economy that are relevant to the question we want to answer, which should be included in the model, and unimportant details that can be ignored." (Core Econ Chapter 2) Today we will begin our study of the workhorse model of economic growth, THE SOLOW MODEL.
Inquiry Question: What is the relationship between technology, population, and economic growth?
Read Chapter 2 ("Technology, Population, and Growth") of Core Econ. As you read take notes that help you to answer this question (What is the relationship between technology, population, and economic growth?).
COPY this document and COMPLETE the assignment to prepare for the discussion.
Activity: Do I understand these CONCEPTS (The Solow Growth Model and economic development)
Watch these videos.
Read one of these articles and continue working on this document to prepare for today's discussion.
Participate in a Socratic Discussion on today's Inquiry Question (What is the relationship between technology, population, and economic growth?).
This rubric will be used to evaluate your discussion.
Read Chapter 16 ("Technological progress, employment, and living standards in the long run") of Core Econ. As you read take notes that help you to answer this question (Why are some countries rich while others remain poor?).
COPY this document and COMPLETE the assignment to prepare for the discussion.
Podcast: In this podcast, Robert Solow, Professor Emeritus at Massachusetts Institute of Technology and Nobel Laureate, talks with EconTalk host Russ Roberts about his hugely influential theory of growth and inspiration to create a model that better reflected the stable long-term growth of an economy. Solow contends that capital accumulation cannot explain a significant portion of the economic growth we see. He makes a critical distinction between innovation and technology, and then discusses his views on Milton Friedman and John M. Keynes.
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.