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Course starting date 24th January, 2022

Course Completed on 26th Feb, 2022

Attendance -Link

Internal Exam-Link

Content/ Syllabus: Unit wise course content distribution

Question paper- 2021, Internal   1   , 2    

Unit -1 Introductory Growth Models

Harrod Model of Growth – Domar Model of Growth – The Harrod – Domar model – assumptions – implications – actual, warranted and natural rate of growth – knife edge instability problem and its economic implication – causes behind it – properties of warranted rate of growth - Comparison of Harrod and Domar Growth Models . 

Lecture  Note-1 Introduction to Growth Theory - Video

Lecture  Note-2 Harrod Model Part 1/2 - Video

Lecture  Note-3 Harrod Model Part 2/2 - Video

Unit-2 Exogenous Growth Model

Class task - Link

Solow Model – Absolute and Conditional Convergence – Steady State – Golden Rule of Capital Accumulation – Transition of the Golden Rule Steady State. - Constant Population growth and its impact on Steady State, Growth Accounting and Solow Residual , Introducing Constant Technological Progress in the Solow Model , Measuring Growth of Endogenous variables at Steady State .

Detail - 1. Background for Solow Model - Homogeneous function, Neo-Classical Production function, Production Concept. Mathematics Revision, step to take out Growth rate for any variables. 

 2.Development of Solow Model with no population growth and no technical progress, developing steady state condition as long run equilibrium condition . After that we will look at steady-state with motion in the central equation to look at growth in an endogenous variable.  Also we measure Measuring Growth of Endogenous variables at Steady State in intensive as well as extensive form 

3. Impact of depreciation on steady-state and Effect of Saving at Steady State (growth effect vs level effect)- in the case of no Population Growth, no Technical Progress.  

4. The Golden rule of capital accumulation- with No Population Growth and no Technical Progress , Transition to the Golden Rule Steady State. 

5. Solow Model with constant population growth and no technical progress- Steady State with various iteration and Golden rule of capital accumulation, Measuring Growth of Endogenous variables at Steady State

6. Introducing Constant Technological Progress in the Solow Model , Measuring Growth of Endogenous variables at Steady State

7. Growth Accounting and Solow Residual, Absolute and Conditional Convergence , 

Unit -3. Endogenous Growth Model

Introduction to Endogeneous Growth Theory, Basic AK Model

Unit -4. Trade and Development

Trade as an engine of growth – Terms of trade and economic development (Prebisch – Singer Thesis) – Imports substitution Vs export promotion.

Lecture-1 - Trade As An Engine Of Growth - different Perspective, Video 

Lecture 2- Trade as an Engine of growth , Lecture overview- Video 

Lecture 3 :- Prebisch Singer Thesis - Reading, Notes, Video

Lecture 4 - Imports substitution Vs export promotion. - Notes

Economics of Growth - Course learning Outcome

This course will introduce students to the growth theory in economics where they will learn the formal models that are dynamic in nature. The basic framework of growth theory revolves around the understanding that economic growth is the process of accumulation of capital. This course covers two framework of exogenous growth theory –keynesian growth theory which is recognized as harrod-domar model and neo-classical growth theory which is well-known as solow-swan model. Also in the course, endogenous growth theory (basic AK model) and the debate on the relevance of Trade as an engine of growth and development with emphasis on import substitution versus export promotion policies are discussed. This course provides an elementary introduction to growth theory where students are introduce with the requirement of long-run equilibrium called steady state, when the economy is growing.

In this course students will learn the different economic thought on important factors that determine long term growth. In the harrod-domar model long term equilibrium (Steady state condition where all variables are growing at the same rate) gives us a razor edge equilibrium and this arises due to constant capital output ratio. In this model growth can be increase permanently by increasing saving. Solow and Swan using neo-classical framework solve the instability problem in the harrod-domar model by considering capital output ratio to be endogenous. In the solow model factors of production demonstrate positive and diminishing return. However in the solow model increase in saving has only level effect and no growth effect. The argument of solow about long term growth depends on technical progress which is exogenous and so depends on non-economic factors. This argument remains unsatisfactory as no policy decision can be made to influence economics growth. Thus step were taken to introduce endogenous technical progress, in this regard first attempt in the form of AK Model was made by Frankel in 1962 by considering capital to be both in physical and human capital thus taking care of diminishing return to capital. In this basic version of endogenous growth theory economic growth can be increase permanently by increasing saving rate. Students in this course also learn about various models and debate related to whether trade can be considered as an engine of growth and development or not. This paper, although sophisticated students on large numbers chose it to understand the dynamics nature of economics. This course will form the foundation for students for advance courses in macroeconomics or growth theory at master and Ph.D. level