Content/ Syllabus: Unit wise course content distribution
Course will start from 1st week of Feb, 2025
Course Completed on 17th May, 2025
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 -Criticism.
Submission Link - Class task 6th March, 2025
Harrod Model Part 1/2 - Video Harrod Model Part 2/2 - Video
Lecture Note-1 Introduction to Growth Theory
Lecture Note-2 Harrod Model
Lecture 3 - Domar Model - Reading
Non-applicability of Harrod-Domar Model in Developing Countries
Unit-2 Exogenous Growth Model
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 .
Submission Link Class task 2 - 27th April,2025
Reading : (Economic Growth 1 ) , (Economic Growth 2 ) shashi1234
Model 1. Solow Model with no Population growth and no Technological progress – Introduction – Assumptions – Accumulation of Capital – Growth in the capital stock and Steady State– Growth of Endogenous variables at Steady State – Effect of Saving at Steady State; Growth Effect vs Level Effect –Implication of alternative Saving rate – Impact of higher Depreciation at Steady State – The Golden Rule level of Capital Accumulation – Transition to the Golden Rule Steady State.
Model 2. Solow Model with Constant Population growth and no Technological progress – Introduction – Assumptions – Accumulation of Capital – Growth in the capital stock and Steady State– Growth of Endogenous variables at Steady State – Comparison of Model 1 & 2 – Effect of Saving at Steady State; Growth Effect vs Level Effect – The Golden Rule level of Capital Accumulation – Transition to the Golden Rule – Impact of change in Population growth at Steady State.
Model 3. Solow Model with Constant population growth and Constant technological progress– Introduction– Assumptions – Accumulation of Capital – Growth in the capital stock and Steady State– Growth of Endogenous variables at Steady State – Comparison of Model 1,2 & 3 – Effect of Saving at Steady State; Growth Effect vs Level Effect – The Golden Rule level of Capital Accumulation – Transition to the Golden Rule.
Growth Accounting and Solow Residual, Absolute and Conditional Convergence.
Unit -3. Endogenous Growth Model
Introduction to Endogenous Growth Theory
Basic AK Model , Comparison between exogenous and endogenous growth Model
Submission link Class task 3 -06/05/2025
Introduction to Endogenous Growth Theory, Basic AK Model - Notes
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.
Submission Link Unit 4, 10th May, 2025
1. Lecture-1
Trade As An Engine Of Growth - different Perspective, Video Lecture
Trade as an Engine of growth , Lecture overview
Prebisch Singer Thesis - Reading
Prebisch Singer Thesis Class Notes
1. Prebisch Singer Hypothesis - Video lecture
3. In short, Prebisch Singer hypothesis- Video lecture
4.PST; Critical evaluation - Notes
Lecture-3
Imports substitution Vs export promotion
References/ Suggested Readings
1. Barro, Robert and Xavier Sala-i-Martin: Economic Growth, Chapter 1, 2nd Edition, MIT Press.
2. Charles I. Jones: Introduction to Economic Growth, 2nd Edition, Viva-Norton Student Edition, Viva Books
3. H.L Ahuja: Development Economics, 1st Edition, Chapters-13, 14, 17, 37, 38, S. Chand & Sons Private Limited
4. N. Gregory Mankiw: Macroeconomics, 7th Edition, Chapter-7, Economic Growth I: Capital Accumulation and Population Growth and Chapter-8, Economic Growth II: Technology, Empirics, and Policy, Pages 191-254, Worth Publishers.
5. Sampat Mukherjee: Macroeconomics: A Global Text, 1st Edition, Chapters 42, 43 & 44, New Central Book Agency (P) Ltd.
6. Felix Raj, Sampat Mukherjee, Mallinath Mukherjee, Amitava Ghose, Rajendra N. Nag: The Contemporary Development Economics (Adam Smith to Amartya Sen), 2nd Edition, Trade and Development, Chapter-18, New Central Book Agency.
Continuous Assessment 2022 Batch (Internal Exam): 15 Marks
1. Attendance - Optional (75% plus - 02 Incentive marks)
2. Presentation marks- 05 marks
Unit 1 = 1 marks
Unit 2 = 3 marks
Unit 4 = 1 marks
3. Incentive marks - 05 marks (2 marks for attendance)
Class participation, active involvement in department and College activities etc (3 marks)
4. Class Tasks/Homework 05 marks – distributed among various units
Unit 2 = 2 marks, Unit 1, 3 & 4 = 1 marks each
5. Exam- Subjective/Objective type - 05 marks
End Semester Examination: 35 Marks
The end semester examination shall be conducted based on written test.
Question Pattern: Students have to answer 01 question carrying 10 marks out of given 03 questions
02 questions carrying 5 marks each out of given 05 questions;.
05 questions carrying 2 marks each out of given 08 questions;
05 questions carrying 1 mark each out of given 08 questions.
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