Introduction to Economic Growth: Why are Some Countries Richer than Others?

Course Description

This course explores the vast inequalities in well-being and economic development across the world and discusses various explanations for why certain places and populations are richer than others. The richest countries in the world today are as much as 60 times more prosperous in terms of incomes per capita than their poorest counterparts. Other living standards vary enormously as well: in 35 countries, less than half of the population has access to electricity (in 2019!); and life expectancy is below 50 in some of the poorest areas.

What can explain these inequalities? What factors drive the long-run accumulation of wealth that make some countries richer? What are the “deep-rooted” determinants behind prosperity? What is the role of geography? What about the impact of culture - our behavioral norms and beliefs? Or that of formal institutions, such as democratic government and rule of law?

Along the way of exploring the questions outlined above, this course will: (i) expose students to the huge and rapidly growing field of economic growth, (ii) present some of the key models of long-run economic development that illustrate and illuminate the main reasons for why the world looks the way it does today, and (iii) outline some of the most widely used methods of data analysis that are used nowadays to better understand the issues and prospects of economic development.

This course starts with an overview of what we mean by and how we measure economic growth with a focus on the most popular metric, GDP per capita. We then proceed to answer the questions raised above. First, we consider what explains present-day differences in wealth among countries without much regard to the distant past. We will explore the role of physical capital (infrastructure, machines, and so on), of population and its growth, and of education and health. We will then move on to the discussion of productivity, a tricky concept which encompasses a variety of things from technological progress to efficient governance.

In the second part of the class we will dig deeper and ask what exactly gave rise to differences in physical capital, population growth, education, and so on. Geography for instance is a factor that has for centuries been hypothesized to strongly affect economic development. Is there any credence to this? We will also explore the role of institutions and culture, and we will see how these forces can shape both each other and economic development.

Students will be applying the insights learned in class by delivering a presentation.

In this class, students will learn about how economists think about the world. The course is a good introduction into economic logic and thinking, which will prove useful in more advanced college-level classes as well. In addition, students will also be exposed to statistical research methods in economics such as how we test hypotheses, and how we can distinguish correlation from causation. This will be extremely useful for future econometrics and applied economics classes.

Prerequisites: Prerequisites: Some familiarity with statistics.