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Outline
The course, taught in English, will try to explain the differences in wealth across nations and it will discuss in a critical way a broad set of economic policies and institutions required to trigger economic growth in developing countries and emerging economies. Moving from the original proposals embedded in the Washington Consensus, the methodological approach follows the growth diagnostic proposed by Hausmann, Rodrik and Velasco. Some policy-relevant issues will be discussed.
Other than discussing the theoretical arguments and the related empirical evidence, part of the course is devoted to introduce the main analytical tools (data sources, references, data elaboration) necessary to undertake a country-specific research project. Hence, part of the lectures will require the use of PCs and the internet.
Reading list (in progress, by topic); readings marked by a star (*) are compulsory:
0. Introduction
- slides
1. The wealth of nations
- slides (*)
Some short references on the debate over geography and institutions as sources of long-run economic development:
1. Daron Acemoglu, Root Causes, Finance & Development, IMF, June 2003. (*)
2. Rodrik, Dani and Arvind Subramanian, The Primacy of Institutions, Finance & Development, IMF, June 2003. (*)
3. Jeffrey Sachs, 2003, Institutions Matter, but Not for Everything, Finance & Development, IMF, June 2003. (*)
4. Diamond, Jared, 2004, The Wealth of Nations, Nature, Vol. 429. (*)
5. A short note with references to the role of history, Tim Hartford
6. Daron Acemoglu and James Robinson, Why Haiti is so Poor?, 2012
7. Paul Romer's idea of charter cities and an Economist article
8. Daron Acemoglu and James Robinson, What Does Geography Explain?, 2012
2. The determinants of growth
- slides (*)
Some references:
1. Robert J. Barro, Economic Growth in a Cross Section of Countries, The Quarterly Journal of Economics, 106(2): 407-443.
2. Levine, Ross. 2008. Finance and the Poor, The Manchester School, Supplement 2008, pp.1-13. (*)
3. Levine, Ross. 2003. More on Finance and Growth: More Finance, More Growth?, Federal Reserve Bank of St. Louis Review, 85(4), 2003, 31-46. (*)
4. Pierre Richard-Agenor. 2004. The Economics of Adjustment and Growth, Harvard University Press (Chapter 13 *)
5. Has finance gone too far?, A Vox column on Finance and growth.
6. A table of the "billions" of growth determinants (here is the full paper)
3. Growth diagnostic
- slides (*)
Some references:
1. Ricardo Hausmann, Dani Rodrik & Andres Velasco, Growth Diagnostics, 2005 (it is the chapter 2 of the book below), and the F&D short article Getting the Diagnosis Right, 2006 (*).
2. Dani Rodrik, 2007, One Economics Many Recipes, Princeton University Press, (Chapters 1 & 2 *).
3. Rodrik, Dani and Arvind Subramanian, 2009, Why Did Financial Globalization Disappoint?, IMF Staff Papers, 56(1): 112-138 (*).
4. A list of country-based growth diagnostic studies at the World Bank.
5. Williamson, John (2008), A Short History of the Washington Consensus, in N. Serra e J. Stiglitz (eds.) The Washington Consensus Reconsidered, Oxford: Oxford University Press (*).
6. Rodrik, Dani, 2010, Diagnostics before prescription, Journal of Economic Perspectives, 24(3): 33-44.
7. A great lecture of Velasco on the crisis.
4. Financial globalization
- slides (*)
Some references:
1. Kose, M.A., E. Prasad, K. Rogoff and S.J. Wei (2007) Financial Globalization: Beyond the Blame Game, Finance & Development, 44(1): 8-13. (*)
2. Kose, M.A., E. Prasad, K. Rogoff and S.J. Wei (2009) Financial Globalization: A Reappraisal, IMF Staff Papers, 56(1): 8-62.
3. International Monetary Fund. 2007. Reaping the Benefits of Financial Globalization, IMF Research Department, June. (*)
4. Ostry, J.D. et al. 2011. Capital Controls: When and Why?, IMF Economic Review, 59(3): 563-580.
5. Two articles on capital controls by The Economist and the Financial Times.
6. Aizenman, J. 2008. Large hoarding of international reserves and the emerging global economic architecture, The Manchester School, 76(5): 487-503.
5. The International Monetary Fund and the Debt relief initiatives
- slides (*)
Some references:
1. Bird, G. 2007. The IMF: A Bird's Eye View of its Role and Operations, Journal of Economic Surveys, 21(4): 683-745. (*)
2. Meltzer, A. 2010. The IMF Returns, Review of International Organizations, 6: 443-452. (*)
3. Moser, C. and Sturm, J.E. 2011. Explaining IMF Lending Decisions after the Cold War, Review of International Organizations, 6: 307-340.
4. The IMF website: generally here, and especially here and here
5. Presbitero, A.F. 2010. External debt relief but increasing domestic debt, VoxEU.org, 19 November.
6. The World Bank website of debt relief initiatives. Few numbers are here (*)
7. Arnone, M. and Presbitero, A.F. 2010. Debt Relief Initiatives - Policy Design and Outcomes, Ashgate: Introduction + Chapter 1 (*)
6. Random evaluation
Some references:
1. Banerjee, Abhijt (2006), Making Aid Work - How to fight poverty effectively, Boston Review, July/August. (*)
2. An open debate on The Economist
Exam:
The overall evaluation consists of two parts. One (accounting for 1/3 of the whole evaluation) comes from a group work, while the second (accounting for 2/3 of the vote) is the final (written or oral) exam.
Results:
Group work:
Each group of 3 students will be given assigned a country. The resulting country analysis studies will be presented during classes (see the calendar and the assignments below). More details will be given during the classes. The files of the five presentations can be downloaded here: Barbados, Bahamas, Jamaica, Trinidad & Tobago, Suriname.
Miscellaneous:
Few reading suggestions:
Guns, Germs and Steel (Armi, Acciaio e Malattie; J. Diamond),
Why Nations Fail (D. Acemoglu & J. Robinson),
I numeri per agire (E. Duflo).
VoxEU.org: leading commentaries on current economic events.
Raghuram Rajan on the interpretation of the crisis, Foreign Affairs
Some figures about austerity in Europe: 1 and 2
A piece on the European crisis
Timetable
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