Growth and Capital Market Integration
Length 1.5 Hours
Aims
To show the effects of increased capital market integration
To show the verbal logic of growth
To develop the Solow Growth model.
Activity
Students will solve the Solow model with capital widening.
Introduction
Assuming an EMU, what are the economic effects of one? We saw last week that the EU was almost certainly not and OCA, yet the EU exists as a functioning currency area. What are the likely effects of this on growth amongst member states? We'll develop the canonical model used to describe economic growth, and expose this model to the facts.
Further Reading
Wyplosz, C. ‘European Monetary Union: The Dark Sides of a Major Success’, Economic Policy, 2006 (in the coursepack, to download it from this link you must be on campus)
Slides
Watch the slides below.
Handout
Right click the image below and choose 'save target as'
