Econ

omic

s 27

0cG

radu

ate

Dev

elop

men

t Eco

nom

ics

Pro

fess

or T

ed M

igue

lD

epar

tmen

t of E

cono

mic

sU

nive

rsity

of C

alifo

rnia

, Ber

kele

y

Econ

omic

s 27

0cG

radu

ate

Dev

elop

men

t Eco

nom

ics

Lect

ure

1 �

Janu

ary

16, 2

007

Eco

nom

ics

270c

: Lec

ture

13

Lect

ure

1:In

trodu

ctio

n to

Eco

nom

ics

27

�Le

ctur

er: P

rof.

Ted

Mig

uel

Em

ail:

emig

uel@

econ

.ber

kele

y.ed

uO

ffice

hou

rs: M

onda

ys 9

-11:

30am

, Eva

ns 6

47

Eco

nom

ics

270c

: Lec

ture

14

Lect

ure

1: G

loba

l pat

tern

s of

eco

nom

ic g

row

th a

nd d

evel

opm

ent (

1/16

)

The

polit

ical

eco

nom

y of

dev

elop

men

tLe

ctur

e 2:

Ineq

ualit

y an

d gr

owth

(1/2

3)Le

ctur

e 3:

Cor

rupt

ion

(1/3

0) �

Gue

st le

ctur

e by

Ben

Olk

enLe

ctur

e 4:

His

tory

and

inst

itutio

ns (2

/6)

Lect

ure

5: D

emoc

racy

and

dev

elop

men

t (2/

13)

Lect

ure

6: E

thni

c an

d so

cial

div

isio

ns (2

/20)

Lect

ure

7: E

cono

mic

The

orie

s of

Con

flict

(2/2

7)Le

ctur

e 8:

War

and

Eco

nom

ic D

evel

opm

ent (

3/6)

Hum

an re

sour

ces

Lect

ure

9: H

uman

cap

ital a

nd in

com

e gr

owth

(3/1

3)Le

ctur

e 10

: Inc

reas

ing

hum

an c

apita

l (3/

20)

Lect

ure

11: H

ealth

and

nut

ritio

n (4

/3)

Lect

ure

12: T

he E

cono

mic

s of

HIV

/AID

S (4

/10)

Lect

ure

13: L

abor

mar

kets

and

mig

ratio

n (4

/17)

Lect

ure

14: E

nviro

nmen

t and

dev

elop

men

t (4/

24)

Lect

ure

15: S

ocia

l Lea

rnin

g an

d Te

chno

logy

Ado

ptio

n (5

/1)

Eco

nom

ics

270c

: Lec

ture

15

�P

rere

quis

ites:

Gra

duat

e m

icro

econ

omic

s, e

cono

met

rics

�G

radi

ng:

Thre

e re

fere

e re

ports

�30

%Tw

o pr

oble

m s

ets

�20

%R

esea

rch

prop

osal

�15

%Fi

nal e

xam

�30

%C

lass

par

ticip

atio

n �

5%

�C

ours

e st

ruct

ure:

1) C

ross

-cou

ntry

gro

wth

em

piric

s (le

ctur

e 1)

2) T

he p

oliti

cal e

cono

my

of d

evel

opm

ent (

lect

ures

2-8

)3)

Hum

an re

sour

ces

(lect

ures

9-1

3)4)

Oth

er to

pics

(lec

ture

s 14

-15)

�A

ll re

adin

gs a

re a

vaila

ble

onlin

e (s

ee s

ylla

bus)

Eco

nom

ics

270c

: Lec

ture

16

Eco

nom

ics

270c

: Lec

ture

17

(1) T

his

Cou

rse

(2) D

evel

opm

ent i

n H

uman

term

s(3

) Jon

es [1

997]

(4) C

ross

-cou

ntry

gro

wth

em

piric

s(D

eato

n [2

005]

, Lev

ine

and

Ren

elt[

1992

])

Lect

ure

1 ou

tline

Eco

nom

ics

270c

: Lec

ture

18

�Th

emes

:

(2) D

evel

opm

ent i

n hu

man

term

s

Eco

nom

ics

270c

: Lec

ture

19

�C

hara

cter

izes

eco

nom

ic g

row

th p

atte

rns

acro

ss

coun

tries

in th

e po

st-w

ar p

erio

d, u

sing

nat

iona

l acc

ount

s da

ta�

Has

ther

e be

en in

com

e co

nver

genc

e or

not

?�

The

mos

t rec

ent (

Jone

s 20

05) e

mpi

rical

evi

denc

e po

ints

ag

ains

t the

con

verg

ence

hyp

othe

sis:

�tw

in p

eaks

�?

(3) J

ones

(199

7, J

EP

)

Eco

nom

ics

270c

: Lec

ture

110

Eco

nom

ics

270c

: Lec

ture

111

Eco

nom

ics

270c

: Lec

ture

112

Eco

nom

ics

270c

: Lec

ture

113

Eco

nom

ics

270c

: Lec

ture

114

Eco

nom

ics

270c

: Lec

ture

115

Eco

nom

ics

270c

: Lec

ture

116

Eco

nom

ics

270c

: Lec

ture

117

Eco

nom

ics

270c

: Lec

ture

118

�A

n ea

rly a

nd in

fluen

tial e

xpos

ition

of e

cono

mic

gro

wth

em

piric

s, u

sing

cro

ss-c

ount

ry d

ata

�Th

ey ta

ke th

e ne

o-cl

assi

cal g

row

th m

odel

�w

ith it

s as

sum

ptio

n of

con

stan

t tec

hnol

ogic

al p

rogr

ess

A(w

hich

ca

n be

inte

rpre

ted

broa

dly)

�to

the

data

, and

ass

ess

the

exte

nt to

whi

ch c

apita

l acc

umul

atio

n ca

n ex

plai

n re

cent

ec

onom

ic g

row

th p

atte

rns

acro

ss c

ount

ries.

Te

chno

logi

cal p

rogr

ess

is tr

eate

d as

a re

sidu

al

(4) M

anki

w, R

omer

, Wei

l (19

92, Q

JE)

Eco

nom

ics

270c

: Lec

ture

119

�A

n ea

rly a

nd in

fluen

tial e

xpos

ition

of e

cono

mic

gro

wth

em

piric

s, u

sing

cro

ss-c

ount

ry d

ata

�Th

ey ta

ke th

e ne

o-cl

assi

cal g

row

th m

odel

�w

ith it

s as

sum

ptio

n of

con

stan

t tec

hnol

ogic

al p

rogr

ess

A(w

hich

ca

n be

inte

rpre

ted

broa

dly)

�to

the

data

, and

ass

ess

the

exte

nt to

whi

ch c

apita

l acc

umul

atio

n ca

n ex

plai

n re

cent

ec

onom

ic g

row

th p

atte

rns

acro

ss c

ount

ries.

Te

chno

logi

cal p

rogr

ess

is tr

eate

d as

a re

sidu

al

�H

ow re

ason

able

is it

to a

ssum

e th

at c

ount

ry A

is

unco

rrel

ated

with

phy

sica

l, hu

man

cap

ital i

nves

tmen

t?�

End

ogen

eity

may

be

a pr

oble

m: a

re h

uman

and

phy

sica

l ca

pita

l inv

estm

ent e

xoge

nous

in re

ality

?

(4) M

anki

w, R

omer

, Wei

l (19

92, Q

JE)

Eco

nom

ics

270c

: Lec

ture

120

�N

atio

nal a

ccou

nts

syst

em (N

AS

) dat

a an

d ho

useh

old

surv

ey (H

HS

) dat

a ha

ve y

ield

ed v

ery

diffe

rent

est

imat

es

rega

rdin

g gl

obal

inco

me

trend

s. W

hich

is c

orre

ct?

�Th

is h

as m

ajor

impl

icat

ions

for o

ur u

nder

stan

ding

of t

he

impa

ct o

f eco

nom

ic re

form

s in

Chi

na a

nd In

dia

�S

tudy

ing

thes

e m

easu

res

also

she

ds li

ght o

n da

ta q

ualit

y ac

ross

regi

ons

(4) D

eato

n (2

005,

RE

Sta

t)

Eco

nom

ics

270c

: Lec

ture

121

Eco

nom

ics

270c

: Lec

ture

122

Eco

nom

ics

270c

: Lec

ture

123

Eco

nom

ics

270c

: Lec

ture

124

Eco

nom

ics

270c

: Lec

ture

125

Eco

nom

ics

270c

: Lec

ture

126

�W

eakn

esse

s of

hou

seho

ld s

urve

y (H

HS

) dat

a:1)

Sur

vey

non-

resp

onse

/ no

n-co

mpl

ianc

e / c

over

age

2)S

urve

ys o

ften

(but

not

alw

ays)

fail

to in

clud

e th

e re

ntal

va

lue

of o

wne

r-oc

cupi

ed h

ousi

ng

3)R

ecal

l per

iods

(i.e

., 1

wee

k vs

. 1 m

onth

) hav

e a

maj

or

impa

ct o

n re

porte

d co

nsum

ptio

n le

vels

4)

The

disa

ggre

gatio

nof

sur

vey

item

s ha

s an

impa

ct5)

The

iden

tity

of th

e su

rvey

resp

onde

nt m

atte

rs6)

NG

O /

non-

prof

it re

late

d co

nsum

ptio

n ac

tiviti

es a

re

typi

cally

mis

sed

in H

H s

urve

ys b

ut c

aptu

red

(at l

east

in

theo

ry) i

n N

SA

mea

sure

s

Dea

ton

(200

5, R

ES

tat)

Eco

nom

ics

270c

: Lec

ture

127

�W

eakn

esse

s of

nat

iona

l acc

ount

s sy

stem

(NA

S) d

ata:

1)Ill

egal

/ re

gula

ted

activ

ities

(e.g

., sm

uggl

ing)

may

be

syst

emat

ical

ly m

isse

d in

the

natio

nal a

ccou

nts

data

2)

The

cons

truct

ion

of N

AS

dat

a of

ten

uses

out

date

d an

d po

orly

mea

sure

d of

ficia

l sta

tistic

s, in

put-o

utpu

t tab

les,

an

d es

timat

ed c

rop

yiel

ds3)

Hou

seho

ld /

info

rmal

sec

tor p

rodu

ctio

n is

mis

sed

in

natio

nal a

ccou

nts

Dea

ton

(200

5, R

ES

tat)

Eco

nom

ics

270c

: Lec

ture

128

�Le

vine

and

Ren

elte

xam

ine

a re

gres

sion

of t

he fo

rm:

Y =

a +

BII

+ B

MM

+ B

ZZ +

u

whe

re Y

is p

er c

apita

inco

me

grow

th, I

is th

e ve

ctor

of

stan

dard

var

iabl

es (a

s in

MR

W 1

992)

, Mth

e va

riabl

e be

ing

test

ed fo

r rob

ustn

ess,

and

Zar

e ot

her c

ontro

ls

�H

ow ro

bust

to th

e ad

ditio

n of

oth

er c

ontro

ls is

BM?

�Th

e bo

ttom

line

: nea

rly a

ll va

riabl

es (i

n te

rms

of fi

scal

, m

onet

ary,

and

trad

e po

licy,

and

pol

itica

l var

iabl

es) a

re

fragi

le to

the

addi

tion

of o

ther

con

trols

, exc

ept f

or th

e st

anda

rd in

vest

men

t and

initi

al in

com

e va

riabl

es

(4) L

evin

e an

d R

enel

t(19

92, A

ER

)

Eco

nom

ics

270c

: Lec

ture

129

Whi

tebo

ard

#1

Eco

nom

ics

270c

: Lec

ture

130

Whi

tebo

ard

#2

Eco

nom

ics

270c

: Lec

ture

131

Whi

tebo

ard

#3

Eco

nom

ics

270c

: Lec

ture

132

Whi

tebo

ard

#4

Eco

nom

ics

270c

: Lec

ture

133

Whi

tebo

ard

#5

Eco

nom

ics

270c

: Lec

ture

134