Development Economics

Econ UA-323 (002), GCASL-388, T-Th 09.30-10.45 am, NYU Fall 2023

Debraj Ray, Room 608, 18 West 4th Street
debraj.ray@nyu.edu, Office Hours M2.30-5.00pm or preferably by appointment

Course Assistant: Ludovica Ciasullo developmenteconfall23@gmail.com
Room 617, 19 West 4th Street; Office hours: M5:30pm-6:45pm.

Readings: This is one of those courses where the lecture material is fundamental. You are responsible for all the material covered in the lectures.

The lectures will be mainly (but not completely) based on

Debraj Ray, Development Economics (1998), Princeton University Press (DE)

I will also be handing out slides and several updates to the book, which is being revised (after 25 years!) for a new edition. Whenever you have the updates (links below and on the Class Material page), you don't need to read the corresponding material in the old edition.

You can also take a look at this essay:

Ray, D. (2010), "Uneven Growth: a Framework for Research in Development Economics," Journal of Economic Perspectives 24, 45-60.

TOPICS AND READINGS

I. Development Facts: An overview of the historical experiences of developing countries. Broad conceptual approaches to the meaning and explanation of underdevelopment.

DE, Chs.1 just as an optional Introduction

DE, Ch 2: Overview, updated, required

II. Growth: Growth experiences and theories. The Solow and Harrod-Domar models. Convergence and divergence. Uneven growth.Structural transformation.

DE, Ch 3: Basic Growth Theory and Ch 4: Convergence

Additional Readings:

Mankiw, N.G., Romer, D. and D. N. Weil (1992), "A Contribution to the Empirics of Economic Growth," Quarterly Journal of Economics 107, 407-437.

Pritchett, L. (1997), "Divergence, Big Time," Journal of Economic Perspectives 11, 3-17.

III. Development Traps: Self-Fulfilling Prophecies and the Role of History. We study how self-sustaining vicious circles of low economic activity can coexist with other "virtuous" cycles of high-level activity. historical experience. The idea of backward and forward linkages is of special importance here.

DE, Ch 7: Development Traps I

Additional Readings:

Rosenstein-Rodan, P. (1943), "Problems of Industrialization of Eastern and Southeastern Europe,'' Economic Journal 53, 202-211

IV. Frozen Accidents: The Persistence of History.

DE, Ch 8: Development Traps II

Additional Readings

Angrist, J. and A. Kreuger (2001), "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Journal of Economic Perspectives 15, 69--85.

Sokoloff, K. and S. Engerman (2000), "History Lessons: Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives 14, 217--232.

Acemoglu, D., Johnson, S. and J. Robinson (2001), "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review 91, 1369--1401./p>

Alesina, A. Giuliano, P. and N. Nunn (2013), "On the Origins of Gender Roles: Women and the Plough," Quarterly Journal of Economics 128, 469-530.

V. Demography and Economic Development. The demographic transition. Sources of high fertility today. Gender (im)balance and missing women.

DE, Ch. 9

Anderson, S. and D. Ray (2010), "Missing Women: Age and Disease," Review of Economic Studies 77, 1262--1300.

Munshi, K. and J. Myaux (2006), "Social Norms and the Fertility Transition," Journal of Development Economics 80, 1--38.

VI. The Distribution of Income and Wealth. Measuring inequality. Trends in inequality. The roots of inequality, and the effects of inequality.

DE, Ch 10: Economic Inequality

DE, Ch 11: Inequality and Development

VII. Credit Markets and Development: Why credit markets are missing and why missing credit markets matter. Theories based on moral hazard, adverse selection and enforcement constraints. Microfinance.

DE, Ch 19: Credit Markets (replaces Ch. 14 in book)

DE, Ch 20: Credit Markets 2 (replaces Ch. 15 in book)

VIII. Land and Labor Markets

DE, Markets: An Introduction

DE, Land Markets

Labor. DE, Ch.13

VIII. The Political Economy of Development:

Ray, D. and J. Esteban (2017), "Conflict and Development," Annual Review of Economics 9, 263-293.

Esteban, J., Mayoral, L. and D. Ray (2012), "Ethnicity and Conflict: Theory and Facts," Science 336, 858--865.

Mitra, A. and D. Ray (2014), "Implications of an Economic Theory of Conflict: Hindu-Muslim Violence in India," Journal of Political Economy 122, 719--765.

Notes on Conflict, Part 1

Notes on Conflict, Part 2