My lectures will be divided into five 2-hour sessions. I've chosen five topics (actually six, I am planning to skip one) and the hope is to give you an overview on each of them. I've been optimistic before and it is entirely possible that we will be able to cover four topics rather than five in the time I have.

Lecture dates and locations:

15th May– Lib 1 (Main Library)

16th  May – S0.21 (Social Sciences)

20th May – PS1.28 (Sciences Building)

21st May – H0.52 (Humanities Building)

22nd May – S0.21 (Social Sciences)

Office hours on each of those dates, room S0.74, 2.30pm-3.30pm.

Lecture 1. Divergence: Growth and Inequality in the World Economy [Slides]

Ray, D. (2010), "Uneven Growth: A Framework for Research in Development Economics," Journal of Economic Perspectives 24, No. 3 (Summer 2010), 45--60.

Ray, D. (1998), Development Economics, Princeton University Press (referred to as DE). An updated version of Chapter 2 can be found here.

Lucas, R. (1990), "Why Doesn't Capital Flow From Rich to Poor Countries?" American Economic Review 80, 92--96.

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

Parente, S. and E. Prescott (2000), Barriers to Riches, Cambridge, MA: The MIT Press.

A. Banerjee and E. Duflo (2005), "Growth Theory through the Lens of Development Economics," Handbook of Development Economics, Vol. 1a. Amserdam: Elsevier, 473-552.

C. Jones (2010), "Intermediate Goods and Weak Links in the Theory of Economic Development,"

A. Erosa, T. Koreshkova and D. Restuccia (2010), "How Important Is Human Capital? A Quantitative Theory Assessment of World Income Inequality," Review of Economic Studies 77, 1421--1449.

You should be familiar, of course, with the basic Solow model, as well as standard empirical implementations of it, such as this paper by Mankiw, Romer and Weil or this paper by Barro. Durlauf and Quah's survey does a great job with this literature.

Lecture 2. Underdevelopment as an "Equilibrium Trap" [Slides]

DE, Chapter 5.

Murphy, K., Shleifer, A. and R. Vishny (1989), "Industrialization and the Big Push,'' Journal of Political Economy 97, 1003--1026. . Perhaps the first formalization of the Rosenstein-Rodan argument.

Morris, S. and H. Shin (1998), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks," American Economic Review 88, 587--597. An attempt to resolve the question of multiplicity while still allowing for various regimes within the same model.

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

The JDE special issue on coordination failures (1996) has a number of articles on multiplicity. Notable among them is the paper by Ciccone and Matsuyama. Similar arguments appear in a paper on financial deepening by Acemoglu and Zilibotti. This paper by Hoff is a nice survey of multiple-equilibrium arguments.

Read the classics: Rosenstein-Rodan, P. (1943), "Problems of Industrialization of Eastern and Southeastern Europe,'' Economic Journal 53, 202-211 is the original paper on coordination failure. Albert Hirschman's The Strategy of Economic Development, New Haven: Yale University Press (1958) is an insightful book. You can still mine it for fresh ideas. The distinction between technological and pecuniary externalities used in my lectures was first made in this paper by T. Scitovsky. (Warning: This paper raises the correct question but I don't think it provides the right answer!)

On equilibrium transitions: Morris and Shin in turn rely on this paper by Carlsson and Van Damme. A variation of this idea is to be found in this paper by Frankel and Pauzner. The paper by Adsera and Ray is yet another attempt to resolve multiplicity.

Lecture 3. History, Inequality and Development [Slides]

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.

Banerjee, A. and L. Iyer, "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review 95, 1190--1213.

G. Loury (1981), "Intergenerational Transfers and the Distribution of Earnings,'' Econometrica 49, 843-867.

Banerjee, A. and A. Newman (1993), "Occupational Choice and the Process of Development,'' Journal of Political Economy 101, 274-298.

Galor, O. and J. Zeira (1993), "Income Distribution and Macroeconomics,'' Review of Economic Studies 60, 35-52.

Mookherjee, D. and D. Ray (2003), "Persistent Inequality," Review of Economic Studies 70, 369--393.

Mookherjee, D. and D. Ray (2010), "Inequality and Markets," AEJ Microeconomics 2, 38-76.

Lecture 4. [Option 1] Behavioral Poverty Traps [Slides]

D. Bernheim, D. Ray and S. Yeltekin (2014), "Poverty and Self-Control," mimeo. 1999 version here.

A Banerjee and S. Mullainathan (2010), "The Shape of Temptation: Implications for the Economic Lives of the Poor," mimeo.

M. Bertrand, S. Mullainathan, and E. Shafir. 2004. "A Behavioral-Economics View of Poverty" American Economic Review94, 419-423.

N. Ashraf, D. Karlan and W. Yin. (2006) “Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines.” Quarterly Journal of Economics 121, 635–72.

P. Dupas and J. Robinson (2013), "Why Don't the Poor Save More? Evidence from Health Savings Experiments," American Economic Review 103, 1138-1171.

E. Duflo, M. Kremer, and J. Robinson. 2011. “Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya,” American Economic Review 101, 2350–2390.

A. Mani, S. Mullainathan, E. Shafir and J. Zhao, "Poverty Impedes Cognitive Function," Science 341, 976-980.

G. Genicot and D. Ray (2014), "Aspirations and Inequality," mimeo.

Lecture 4. [Option 2] Credit and Insurance Markets

DE, Chapters 14 and 15.

Stiglitz, J. and A. Weiss (1981), "Credit Rationing in Markets with Incomplete Information," American Economic Review 71, 393-410.

Ghosh, P., Mookherjee, D. and D. Ray (2000), "Credit Rationing in Developing Countries: An Overview of the Theory," Chapter 11 in Readings in the Theory of Economic Development, edited by D. Mookherjee and D. Ray, London: Blackwell.

N. Kocherlakota (1996), "Implications of Efficient Risk Sharing without Commitment," Review of Economic Studies 63, 595-609

Banerjee, A. and E. Duflo (2004), "Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed Lending Program," mimeo.

Karlan, D. and J. Zinman (2009), "Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment,"Econometrica 77, 1993-2008. (Link to longer version.)

C. Udry (1994), "Risk and Insurance in a Rural Credit Market: An Empirical Investigation in Northern Nigeria," Review of Economic Studies 61, 495--526.

P. Ghosh and D. Ray (1996), "Cooperation in Community Interaction without Information Flows,'' Review of Economic Studies 63, 491--519.

Lecture 5. Distribution and Conflict [Slides]

Miguel, E., Satyanath, S. and E. Sergenti (2004), "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy 112, 725--753.

Esteban, J. and D. Ray (2011), "Linking Conflict to Inequality and Polarization," American Economic Review 101(4), 1345–74.

Montalvo, J. and M. Reynal-Querol (2005), "Ethnic Polarization, Potential Conflict and Civil Wars," American Economic Review 95, 796--815.

Esteban, J., Mayoral, L. and D. Ray (2012), "Ethnicity and Conflict: An Empirical Investigation," American Economic Review 102, 1310-1342.

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

Dal Bó, E., and P. Dal Bó (2011), "Workers, Warriors and Criminals: Social Conflict in General Equilibrium," Journal of the European Economic Association 9, 646-677.

Dube, O. and J. Vargas (2013), "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," forthcoming, Review of Economic Studies.

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

Notes: For a survey on conflict, read Blattman and Miguel (2010). For more on the relationship between per-capita income and conflict, see Collier and Hoeffler (2004) or Miguel (2005). For more on the measurement of polarization, see Esteban and Ray (1994), or Duclos, Esteban and Ray (2004). The theoretical link between polarization and conflict is first explored in Esteban and Ray (1999). On the salience of ethnic conflict, see Esteban and Ray (2008).