Department of Economics and Blum Center, U.C. Berkeley; and WCEG; last revised: 2020-01-12
Original course by Melissa Dell (Harvard Econ 1342 https://canvas.harvard.edu/courses/8254/assignments/syllabus), revised by Brad DeLong, research assistance by Anish Biligiri
https://bcourses.berkeley.edu/courses/1487685
Approximately what was the growth rate of the human useful-ideas stock between the year 0 and 1500?
What should you have had in the front of your minds? What in the back of your minds? What chain of reasoning should you have used?
Why Is This Interesting?
2.06/.0036 is about 60, no?
Gustave Dore: Dante and Virgil meet the past’s great thinkers in Hell’s Limbo
Dante Alighieri (1320): Inferno:
Poi ch'innalzai un poco più le ciglia,
vidi il maestro di color che sanno
seder tra filosofica famiglia...
(When I had lifted up my brows a little,
The Master I beheld of those who know,
Sit with his philosophic family.
All gaze upon him, and all do him honour.
There I beheld both Socrates and Plato,
Who nearer him before the others stand…)
Dasgupta is for section.
Let’s look at Aristoteles son of Nikomachus of Stagira…
Raphael: The School of Athens: Plato and Aristotle in Conversation
A mighty, flawed thinker we can learn from:
His thought is mighty
Many have taken his thought—even where it is flawed—to be mighty
We have a lot to learn from him—even if often what we have to learn is not what he sets out to teach…
Note his (implicit and explicit) starting points…
Critically evaluate his arguments: where do we get off and where can we rejoin his cable-car?
Aristotle: Roman marble copy of a Greek bronze by Lysippos (-330)
Classical Athenian 4-drachma silver coin: The “owl”, with the head of the goddess Athene on the front and her familiar bird of wisdom on the back, of the type that Aristotle (or his slaves) would have carried on their person. Weighs 3/5 of an ounce. The Athenian navy paid its oarsmen one drachma a day.
-1000: 4000
-750: 10000
-550: 30000
-450: 75000
-350: 60000
-250: 40000
-150: 30000
-50: 15000
This is crazy!
Slide taken from Melissa Dell
This course examines the history of economic growth, beginning when we became “us” and continuing as far as we get. Topics covered include:
Assessment: Students are graded on the basis of:
LECTURE: TTh 09:40-11:00 Birge 50; FIRST LECTURE Jan 21
SECTIONS:
104 DIS W 08:10 Etcheverry 3119;
102 DIS W 10:10 VLSB 2070;
106 DIS Th 14:10 Dwinelle 179;
105 DIS Th 17:10 pm LeConte 385;
103 DIS M 08:10 Etcheverry 3119;
101 DIS M 10:10 VLSB 2070
COURSE WEBSITE: https://bcourses.berkeley.edu/courses/1487685
OFFICE HOURS: TBD…
Schedule
T Jan 21: Growth in Historical Perspective, Humans and Their Economies
Th Jan 23: Robert Solow's Growth Model
T Jan 28: Malthusian Perspectives
Th Jan 30: Determinants of Progress in Technology and Organization
T Feb 4: Malthusian Agricultural Economies
Th Feb 6: Civilizational "Efflorescences" and Imperial Declines
T Feb 11: Why Was Pre-Industrial Progress so Slow on Average?
Th Feb 13: Commercial Revolutions
T Feb 18: The Industrial Revolution
Th Feb 20: Why Northwest Europe?
T Feb 25: EARLY MIDTERM (Instructor Reality Check)
Th Feb 27: Modern Economic Growth
T Mar 3: U.S. Economic Ascendancy
Th Mar 5: Globalization Advances and Retreats
T Mar 10: Convergence and Its Absence
Th Mar 12: Inequality and Plutocracy
T Mar 17: The Development of Underdevelopment
Th Mar 19: Western Europe, North America, and South America
T Mar 31: Behind the Iron Curtain, and East Asian Miracles
Th Apr 2: Asia and Africa
T Apr 7: "Deep Roots" vs. Path Dependence
Th Apr 9: Growth and Fluctuations; Trade and Development, Foreign Aid
T Apr 14: Plutocracy, Kleptocracy, & Neo-Fascism
Th Apr 16: Global Warming
T Apr 21: The Pace and Meaning of Economic Growth
Th Apr 23: The Future?
T Apr 28: Conclusion
Th Apr 30: Final Review
W May 13 11:30-14:30: FINAL EXAM
Do all of the below by January 20:
Assignment 1: Read the syllabus at: ____. Using the information in the syllabus, think up a question that should be on the FAQ—the Frequently Asked Question—list for the course. Answer the question you thought up. Upload your question and answer to your account at the course on canvas at: https://bcourses.berkeley.edu/courses/1487685
Let's assume three things about the relationship between an economy's resources and the total output it produces and income it generates:
A proportional increase in the economy's capital intensity $ \kappa = K/Y $, measured by the capital stock divided by total production, will carry with it the same (smaller) proportional increase in income and production no matter how rich and productive the economy is. A 1% increase in capital intensity will always increase income and production by the same proportional amount.
If two economies have the same capital intensity, defined as the same capital-output ratio $ \kappa $, and have the same level of technology- and organization-driven efficiency-of-labor $ E $, then the ratio of their levels of income and output will be equal to the ratio of their labor forces $ L $.
If two economies have the same capital intensity, defined as the same capital-output ratio $ \kappa $, and have the same labor forces, then the ratio of their levels of income and output will be equal to the ratio of their technology- and organization-driven efficiencies-of-labor $ E $.
Then there is one and only one equation that satisfies those three rules of thumb:
And it is also worth writing down
We have just done what economists typically do: take a complex situation, strip things down to some salient piece of it, and then formalize and algebraize that piece in the hope of gaining insight…
Look at:
Variables change over time:
Now let’s look at the rate of change of capital-intensity κ as a function of the level of capital-intensity κ, for constant n, g, s, δ, and θ…
This κ* we define to be the steady-state balanced-growth equilibrium value of capital intensity κ. If κ = κ, it will be constant. If κ > κ, capital intensity will fall—and so approach κ. If κ < κ, capital intensity will rise—and so approach κ*.
Everything except κ—which is constant—grows at a constant proportional rate: either n, or g, or n+g;
what if $ \kappa ≠ \kappa^* $? What happens then? Since $ s = \kappa^*(n+g+\delta) $, we can multiply (2.2.9) by $ \kappa $ and then rewrite it in terms of the equilibrium capital-intensity $ \kappa^* $ as:
$ \frac{d\kappa}{dt} = s/(1+\theta) - (n+g+\delta)\kappa/(1+\theta) $
$ \frac{d\kappa}{dt} = (n+g+\delta)\kappa^*/(1+\theta) - (n+g+\delta)\kappa/(1+\theta) $
$ \frac{d\kappa}{dt} = - \frac{n+g+\delta}{1+\theta} (\kappa-\kappa^*) $
$ \kappa = \kappa^* + e^{-((n+g+\delta)/(1+\theta))t}(\kappa_0 - \kappa^*) $
$ E_t = e^{gt}E_0 $
$ L_t = e^{nt}L_0 $
$ Y_t = \left(\kappa_t \right)^\theta E_t L_t$
$ y_t = \left(\kappa_t \right)^\theta E_t$
$ K_t = \kappa_t Y_t $
Brad DeLong Department of Economics and Blum Center, U.C. Berkeley; and WCEG last revised: 2020-01–12
Original course by Melissa Dell (Harvard Econ 1342), revised by Brad DeLong, research assistance by Anish Biligiri