363-1136-00L  Dynamic Macroeconomics, Innovation and Growth

SemesterAutumn Semester 2021
LecturersH. Gersbach
Periodicityyearly recurring course
Language of instructionEnglish
CommentStudents who have successfully completed the course "Dynamic Macroeconomics" (364-0559-00L) or
"Economics of Innovation and Growth" (363-0562-01L) can not register for this course.


AbstractIntroducing dynamic models and workhorses in macroeconomics, understanding the role of innovation and institutions for economic development and discussing policies to foster innovation and economic growth, with a perspective on how digitization and artificial intelligence will affect our economies.
ObjectiveAfter the course, students will be familiar with dynamic general equilibrium theory and the basic workhorses in macroeconomics. Participants will be able to speak the Arrow-Debreu and recursive language and apply the frameworks to interesting issues, such as innovation and growth. Moreover, students will understand how the world has developed over the last centuries and the proximate and fundamental causes of innovation and economic growth. Students will understand and apply the basic models of economic growth and will be able to identify policies to foster innovation and growth and to reduce the large wealth differences in the world. Finally, they understand how digitization and artificial intelligence will drive the economies.
Content1. Introduction

2. The Arrow-Debreu Approach and Sequential Markets

3. The Neoclassical Growth Model and the Representative Agent Model (with Mathematical Background)

4. Technological Progress and how the World has developed

5. Innovations and Growth (New Growth Theory)

6. Growth Policies and Fundamental Causes for Growth

7. Digitization and Artificial Intelligence
Literature1. Acemoglu, D. (2009): Introduction to Modern Economic Growth. Princeton University Press, Cambridge MA.

2. Stokey, N. and Lucas, R. (1989): Recursive Methods in Economic Dynamics. Harvard University Press, Cambridge, Massachusetts, United States and London, England.

3. Ljungqvist, L. and Sargent, T. (2004): Recursive Macroeconomic Theory, MIT Press, Cambridge, Massachusetts, United States and London, England.

4. Barro, R.J. and X. Sala-i-Martin (2004): Economic Growth. MIT Press.

5. Aghion P. and P. Howitt (1998): Endogenous Growth Theory. MIT Press.

6. Aghion P. and S. Durlauf (eds. 2005): Handbook of Economic Growth. Elsevier, chapter 6.

7. Romer, D. (2001): Advanced Macroeconomics. McGraw-Hill.

8. Bretschger, L. (1999): Growth Theory and Sustainable Development. Edward Elgar.

9. Romer, P. (1990): Endogenous Technological Change, Journal of Political Economy, Vol. 98(5).

10. Aghion, P. and P. Howitt (1992):A Model of Endogenous Growth through Creative Destruction. Econometrica, Vol. 60(2).

11. Lucas, R. (1988): On the Mechanics of Economic Development, Journal of Monetary Economics, Vol. 22.

12. Rebelo, S. (1991): Long-Run Policy Analysis and Long-Run Growth. Journal of Political Economy, Vol. 99(3).

13. Piketty, T. (2014): Capital in the Tewnty-First Century. Harvard University Press, Cambridge, MA.

14. Current Literature on Digitization and Artificial Intelligence
Prerequisites / NoticeStudents who have successfully completed the course "Dynamic Macroeconomics" (364-0559-00L) or "Economics of Innovation and Growth" (363-0562-01L) can not register for this course.