Category — Courses

And term time is nearly upon us.

Time to get the lecture notes dusted off for another semester.

This year it’s Economics of EU Integration and Economics for Business, with a few guest lectures along the way.

That’s 26 students, and 440 students.

I can’t wait to get started.

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A Vox Eu column shows remedial maths courses don’t have much impact on overall student ability, meaning students who aren’t good at this subject already don’t have a prayer of doing really well. I must say I hope these guys are wrong, because if they aren’t it means as student numbers increase and weaker students are allowed into college, the level of mathematical exposition (and hence progress to higher levels in economics education) will have to go down. From the article:

University-level economics makes extensive use of basic mathematics. As many economics professors can testify, this makes the subject difficult for less technically able students. Moreover, expanding participation in higher education (as has been targeted by the UK government) may further worsen the problem. The students who enter higher education due to the expansion are likely to be, on average, less technically able than current students, and thus it is likely that the number of students who struggle with their economics studies due to lack of basic math knowledge will increase over time.

Do remedial mathematics courses help economics students? | vox - Research-based policy analysis and commentary from leading economists

Some days, the web feels like 5 people trying to make something; 5k people turning it into a list; and 500MM people saying, “FAIL.”

—Merlin Mann

Months ago, a reader asked me what software I use to create all the different blog posts, handouts, podcasts, lecture notes, and audio files for the website. It’s quite a long list, which could use some paring down in the next semester. I’ve broken it up into three bits: Website & Podcast, Slides and Handouts, and Other. I’ll finish off with some thoughts about where to go next with the blog, the podcasting, and slideshows.

Here’s the list, and what I use each piece for.

1. Website

1. Wordpress for the website, with Podpress for integration with iTunes. About 20 plugins for different bits of functionality like printing posts and integrating into each post and search engine optimisation.

2. Apture for autolinks and auto content generation on the site.

3. Vimeo for hosting podcasts, because hosting them myself shags me straight in the wallet. It cost me nearly 300 euros one month for all the extra bandwidth. These podcasts are huge files, so it makes sense to host them somewhere else and stream them.

4. iShowU for making screencasts.

5. Profcast for making the podcasts, or if there’s no slideshow, Audio Hijack Pro for recording the talk.

2. Slides and Handouts

1. I use Keynote and Beamer for the presentations, depending on how mathematical the subject is. Never PowerPoint. I’m starting to look at 280slides.com though for producing quick presentations on the fly.

2. I made all of last year’s EC4333 handouts using Apple’s spreadsheet program, Numbers. They looked great, I’ll probably keep some of them in next semester’s iteration of the course. Examples of the handouts are here and here.

3. I use Mathematica for simulations and demonstrations of different models, also for some lecture notes, for example, all of Financial Economics, EC4024, had their handouts made in Mathematica (examples here and here).

I don’t really like the way they look though, so I might move the lecture notes over to for the coming semester.

4. for typesetting mathematical documents, lecture notes, slideshows, and articles. I might begin using this exclusively from now on, even though it looks pretty boring for the reader. There is a latex class built on Edward Tufte’s visual schema I might try. We’ll see.

3. Other

I’m using a lot of Web 2.0 Applications to distribute the content I create. This is for several reasons. Either hosting them on my own site would be expensive, or I’d lose control of the versions of these things if I just let everyone download .pdfs, or I think the app adds something to the exposition, or I’m just messing around with the functionality and seeing what works. Whatever the reason, these are the apps I tend to use for editing/viewing and displaying content on the site.

1. Google docs for reading Word, Excel, Powerpoint documents people send to me.

2. Scribd to allow viewers of each document I put up to view them online as well as allowing me to keep download statistics on each document. My scribd page is here.

3. Vimeo, see above.

4. slideshare.net to allow viewers of the slide shows access to them without, again, doing horrible things to my wallet. My slideshare page is here.

5. flickr.com for photos, but I’ve never really used this. I put up an account to share charts and graphs, but IBM’s cool visualisation software seems to have beaten flickr on that score.

4. Moving forward with the site, lecture notes, and other content

I’ll try hard to emulate Terry Tao’s style of lecture exposition in next semester’s classes, with comprehensive handouts written as blog posts, linked to textbook or online resources, and Mathematica demonstrations, or what have you. I’ll definitely use slideware for the 350+ EC4004, Economics for Business, but I’m not so sure about Economics of European Integration, EC4333. That one, I might just teach old school, and see what happens.

Next, I’ll do the podcasts again, on Vimeo, the hosting site. The handouts will be pdfs, most likely , and the mathematica demonstrations will be available on the site as well as the Wolfram website for their demonstrations.

If anybody has any suggestions on improving the content or the website, please let me know.

Here’s a screen cast of a small application I thought up to let students text message me in big classes like EC4004. The application works pretty well with my Sony W200i, but it might work with other phones as well. Drop me a mail if you’re a lecturer interested in using this thing, or even better, if you’d like to help me make it more extensible.

My Text Message Doo-Hickey from Stephen Kinsella on Vimeo.

1. The US Economy: Bureau of Labor Statistics
2. The EU: Eurostat
3. The EU with Micro data: OECD.
4. World Poverty/Income Distribution data: IMF
5. World GDP/GNP Data: The Penn World Tables
6. Historical Financial Data: Measuring Worth
7. Irish Macro Data: CSO (Measuring Ireland’s Progress is a great place to start here), the ESRI has excellent Micro data on health.
8. Current Financial Data: I use Yahoo finance or Financial Data Finder. Both are excellent.
9. Different Interest Rate Data: FRED.
10. Internet Price Competition Index: Nash-Equilibrium.

I’ll add more as I come across them.

The CIFREM Doctoral programme at the University of Trento in Northern Italy is accepting applications for funded PhD positions for 3-4 years. If your research interests focus on Behavioural economics, Behavioural studies in management and organisations, Environmental economics, or International Economics, you should consider applying.

UL students can email me for more information.

Details about the course can be found here.

On April 2 I’ll be giving a seminar in MC-2005 about presentation methods. Here are the lecture notes, slides, and a handout we’ll use on the day.

First, let’s talk a little pop psychology, then we’ll move on to constructing the lecture in outline form, then I’ll offer some tips on electronic delivery: PowerPoint tips, website tips, podcasting tips, and some experimental feedback ideas I’m having a go at now. Finally, I’d like to have a discussion with you about what you find useful, and what I might think about improving with my own delivery. I’ll put up a podcast of the discussion afterwards.

Right Click to download the handout

Right Click to download the lecture notes

Click the link below to look at the slides

[Read more →]

<rant>

I love getting emails, and I’m very good at responding to them quickly and efficiently.

I like getting text messages in large classes like EC4004, because it helps me interact with students more effectively.

I don’t like receiving emails as if they were text messages. Just now, a student sent me the following email:

Some of the slides that you used during the lecture today aren’t in the slides that were put up on Sulis. Are you going to put up an up-dated version of them?

This reminds me of an email I received a few years ago:

Hey wht cum up n exam? thx 

If you think this is the correct way to interact with a lecturer or anyone in a professional capacity, you need to think again.

Email etiquette is important, and will become more important as you move away from college into the workforce. Learn some.

Here’s a sample of the type of email I’d like to recieve:

Subject Line: I’d like you to do/say/write/explain something/meet me/clear something up/etc

Body: Hi Stephen,

I’m emailing you because….

Regards,

Jane Smith.

I won’t answer emails that aren’t written in a concise, respectful, professional manner. That’s my email policy.

In return, I promise to apply the same courtesy to you.

</rant>

Introduction

In week, nine, I’ll give two lectures, in which we will build up a simple macrodynamic model and expose it to comparative and dynamic statics, doing some numerical examples along the way. You’ll need the handout to make sense of the slides, and you’ll need to spend some time with the material before class.

international_ecs_guest_lecture.pdf

And here are the slides:

| View | Upload your own

A student wants to know how they can download my slides, as opposed to the lecture notes and handouts I give out, which are just uploaded .pdf files.

The slides are hosted by a company called slideshare, who, it turns out, have a web utility for sharing slides. Clever folk that they are, they allow streaming of slideshows and downloading of them.

Here’s how to get the slides as a .pdf you can print off:

Click anywhere in the window where the slideshow is playing. This will take you to Slideshare’s page. There you’ll see a link to ‘download file’. Click it and work away.

Here’s what that should look like, with the download option displayed in the bottom right hand corner of the screen.

I’ll post lecture notes up during the lecture.

Don’t forget to bring a laptop, one to each group at least.

Also, we’ll be having a quiz, so re read your lecture notes!

Aggregate Supply and Demand

Download the slides here: asad.ppt

Or, watch them here:

Q1: Does a macroeconomic equilibrium exist?

Q2: If the answer to Q1 is true, then will this equilbrium generate full employment?

We’ve already talked about measuring total output, so revise your notes on GDP, GNI, etc.

Aggregate Supply:

The total supply of goods and services produced in the economy in a given period

AS = (net output per hour)*(total hours of employment) = yN

Aggregate Demand

AD is the total demand for goods and services in an economy in a given period.

AD = C+I

C = cwN

AD= C+I- cwN+I

Total Saving = wages saved + all profit income

= Nc(1-c)+N(y-w)

= Nw-Nwc+Ny-Nw

=Ny-Nwc

Market Clearing

AS = yN=cwN+I = AD

Unemployment and Government Fiscal Policy

AD = C+ I + B = cwN + I + B

AS = yN = cwN + I + B = AD

yN- cwN = I + B

N(y-cw) = I+B

so

N* = (I+B)/(y-cw)

this is the equation for the equilibrium level of employment when AS=AD in the product market.

Reading for this lecture: Bowles et al, pgs 445–476

Unemployment: the persistent macro economic problem. Why does unemployment exist? Why does it still exist?

More stylised facts:

1. High employment sustained over a few years will reduce profits. This is called the high-employment squeeze.

2. The availability of imports for an country’s goods place additional limits on the effectiveness of macro policies aimed at high employment.

3. Monetary policy and fiscal policy approaches to job creation are both effective and in different ways, and they may work at cross purposes.

4. Sustained high employment levels are possible, but we have to change the policy mix as we move through the business cycle.

Wage Push in Ireland

Materials Cost Push

> Housing CPI Cost push

Unit Cost, Output and the Profit Rate

(a bad reproduction of figure 17.4, pg. 456)

Exports and Imports: the Irish experience.

Lecture 3. Aggregate Demand and The Surplus Approach to Economics.

Reading: Bowles et al Chapter 16 pp 403—444

Watch the slideshow:

Download the Handout: MDU_macro_lecture3_handout.pdf

Today:

1                  Why are there unemployed resources in the economy?

2                  Introduction to business cycles

3                  Aggregate Supply and Demand

4                  Unemployment

5                  Income, Consumption, and Saving

6                  Unemployment and Government Fiscal Policy

7                  The Multiplier

8                  Yet another set of Stylised Facts

1.                Why are there unemployed resources in the economy?

The Great Depression really is the starting point for our analysis of aggregate demand and the stimulation of economic activity through fiscal policy. Read about it here. http://econ161.berkeley.edu/TCEH/Slouch_Crash14.html.

The resources used in production are Land, Labour, Capital and Enterprise. At any moment, some of these resources are either not being used in their most efficient way (Ph.Ds sweeping streets) or not being used at all (Ph.Ds on the dole). Why, in an era of very tightly integrated capital markets globally and quite tightly integrated labour markets at least in some parts of the world, do unemployed resources exist? This is the subject of this lecture.

In the output lost in 2001 in the US economy, Bowles et al (pg 403) suggest that had the manufacturing resources of the US economy been fully utilised, an extra $1.2 trillion worth of good would have been produced. The output gap for Ireland from 1970–2005 is shown below

The figure below shows Ireland’s percentage deviation from it’s potential GDP from 1970 to 2005 compared with the USA (data for this figure came from http://www.imf.org/external/pubs/ft/weo/2000/02/data/ngap.csv).



What we see is striking. First, there is no discernible pattern to the individual fluctuations, though Ireland and the USA do track one another’s highs and lows, albeit in a lagged way. Second, the magnitude of each change is different for each country. This means each country experiences macroeconomic shocks differently. The canonical example is the http://en.wikipedia.org/wiki/1973_oil_crisis of the early 1970’s. Look at the graph for this period. What do we see? The countries experience an overall steep drop in deviations from potential, with Ireland experiencing a worse decrease than the USA. Third, in terms of the future from 2005, if you were to put a bet on, where would you say that line will go? Would you be confident about that assertion?

2. Introduction to Business Cycles.

Let’s look again at the Great Depression’s effect on output in the G7 (i.e. the richest) countries.

Here we can see a massive drop in output caused by a series of macro shocks.

First, let’s dispel a common misunderstanding. There are no such thing as business cycles. The word ‘cycle’ implies if you take a point on the graph of GDP against time, this point will reappear with the same frequency and amplitude a bit down the time line. This is of course not the case. If it were, and the economy did move in waves, then counteracting the effects of these waves would be simple: we would simply adjust our expectations, and hence our spending and saving patterns, to match the ebb and flow of that wave, were it so regular. No, there is no ‘cycle’ here, only fluctuations in output plus noise.

Actual vs. potential GDP here. This has implications for policy, depending on where we are in the business cycle.

Where do you think we are now?

3                  Aggregate Supply and Demand

Aggregate Demand is defined as the total demand for goods and services in the economy during a specific time period. It is often called effective demand. Find out more about the definition here.

Aggregate Supply is defined as the total supply of goods and services by a national economy during a specific time period. Find out more about the definition here.

4                  Unemployment

Unemployment refers to the numbers of workers actively seeking work but who cannot find work. The actual number of unemployed workers in Ireland is given by the Central Statistics Office, available here. Ireland hasn’t had a serious short term or long term (+12 months) unemployment problem in a long time, as we can see from the graphs below.

8    Growth Stylised Facts

From Kaldor, Kuznets, Romer, Lucas, Barro, Mankiw-Romer-Weil, and others.

1. In the short run, important fluctuations: output, employment, investment, and consumption vary across booms and recessions.

2. In the long run, so goes the story, we should see balanced growth: output per worker (Y/N) and capital per worker (K/L) grow at roughly constant rates (there is considerable disagreement about this statement, however). The return to capital (r), is roughly constant, though the real wage rate (w) can grow at the same rates as output. And the income shares of labour and capital (wL/Y and rK/Y) stay roughly constant.

3. Substantial cross-country differences in both income levels and growth rates.

4. Persistent differences versus conditional convergence.

5. Formal education. Highly correlated with high levels of income (obviously two-directional causality here); together with differences in saving rates can “explain” a fraction of the cross-country differences in output; this is an important predictor of high growth performance.

6. R&D and IT: These are the most powerful engines of growth (but obviously we’ll require more basic skills and education to take advantage of these first);

7. Government Policies: Taxation, infrastructure, inflation, law enforcement, property rights and corruption and important determinants of growth performance.

8. Democracy. An inverted U-shaped relation.

9. Openness. International trade and financial integration can promote growth.

10. Inequality. The Kuznet’s curve, an inverted U-shaped relation between income inequality and GDP per capita

11. Financial Markets and Risk Sharing.

12. Fertility. Higher fertility rates are correlated with lower levels of income and lower levels of economic growth. The Malthus curve, the Lewis model.

13. Structural transformation really mattes. This is the Theory of Transformational Growth.

14. Urbanisation over the long stretch of history really matters.

15. Institutional and social factors, e.g. Ireland’s history as a colony, existing social norms, etc.

EC6012 Course Outline

Right Click the link below and choose ’save target as’ to download the course outline.

[Kinsella_EC6012_CourseOutline_2.pdf]

Introduction

Monetary economics concerns the relationship between real and nominal variables. International monetary economics considers these relationships in the context of an open economy. The aim of this course is to develop simple models to evaluate the effects of policies on inflation, employment, real interest rates, and production.

Learning Outcomes

At the end of this course, students should be able to

• describe the development of major international institutions like the World Bank, the IMF, and the EU;
• give a brief account of some simple stock-flow consistent models used in evaluating monetary policy;
• describe the evolution of the neoclassical and structuralist macroeconomic modelling paradigms since Keynes’ death.

Lecturer Contact Details

My office is AM068a, office hours are 12–1pm on Tuesdays or by appointment. Contact me by email at stephen.kinsella@ul.ie.

Textbook



Students are urged to buy Goldey and Lavoie’s Monetary Economics An Integrated Approach to Credit, Money, Income, Production and Wealth, Palgrave-Macmillan, 2006.

I also recommend you buy Taylor, Restructuring Macroeconomics.

Basic reading for the first two lectures will be taken from Leddin and Walsh’s Macroeconomy of the Eurozone, or in the library at 339.09417/LED

Assessment

Assessment will consist of an end of term exam worth 50\% and a group presentation worth 30\% and 2 or 3 exercises worth 20\%. A sample exam will be distributed in week 6 of term. The exam is an essential part of the assessment, and each part of the course assessment must be passed.

The presentation will be on one of the models taught in the class: the group will be expected to present the fundamentals of the model to the class. Marks will be given for accuracy of material, structure of presentation, relevance of material, use of graphic displays and general preparedness. Written feedback will be given.

Lecture Outline & Layout

Lectures are 2 hours long, from 10am to 12pm in S114 in the Schuman building and participatory. This is a Master’s class, so students are expected to have read the lecture material before the lecture. Slides used during the lectures will be provided during the lectures and online at stephenkinsella.net. There will also be a podcast of the lecture available afterward on the site.

The layout for the course is as follows

Review of intermediate open economy macroeconomics Primitive concepts review. AS-AD, Balance of Payments, Circular Flow models in open  economies. `Money’ measurement and definition. Macroeconomic objectives, The money concept its origin, definition and current role; different types of money â commodity money, fiat money, etc; Measuring the money supply M0, M1, M2, etc

; Money supply counterparts, the causes of money supply changes ;The demand for money and its determinants ;The repo rate and its impact on the economy; The role of all the other interest rates in the economy; The monetary transmission mechanism; How the Reserve Bank conducts monetary policy; The reason for having inflation targets. [Two lectures, Reading: Chapters 2 and 3, Leddin & Walsh, 2003

A Simple Stock-Flow Social Accounting model  Introduction to Social Accounting Matrices, stock-flow accounting, simple transmission mechanisms for growth, and  [Three lectures], Reading: Chapter, Godley, 2006, Chapter 1, Taylor, 2004.

Balance Sheets, Transactions Matrices, and the Monetary Circuit Establishing the technical apparatus of the structuralist approach. [Three Lectures] Reading: Chapter 2 Godley, 2006

A very simple Model with Government Money Government and private money and a service economy [Two lectures] Reading:  Chapter 3 Godley, 2006

Government Money with Portfolio Choice The PC Model simulated and derived for the class.[Two lectures] Reading:  Chapter 4 Godley:2006

Presentations

Presentations will be made on the following papers in the following areas. All papers are available at http://www.stephenkinsella.net/?p=148. We’ll set a timetable for presentations in the first lecture.

Presentation 1 Robert Mundell,  The Pure Theory of International Trade.

Presentation 2 Lloyd A. Metzler Tariffs, the Terms of Trade, and the Distribution of National Income

Presentation 3 Harry G. Johnson  The Transfer Problem and Exchange Stability

Presentation 4 Gottfried Haberler \emph{Some Problems in the Pure Theory of International Trade

Presentation 5 H. W. Singer, The Distribution of Gains between Investing and Borrowing Countries

EC6012 Setting up Group Blogs

Here is the procedure for setting up your blog.

1. Go to Blogger.com.

2. Set up the blog in 3 steps. This is free.

3. Email me the link to the blog.

4. Post your group homework on the blog.

EC6012 International Monetary Economics Lecture 1



Right click the link below to download the handout:

[Download EC6012_Lecture1.pdf]

Mathematics in Macroeconomics

Mathematical formalism is only useful when

1. it tests internal consistency between different propositions within a theory (e.g. the proposition that different markets clear simultaneously);

2. it clarifies what ‘drives’ the restuls (e.g, given the minimal assumptions under which it will be true that more exports can be achieved at the cost of a worsening distribution of income), and;

3. It provides a solid base for empirical analysis.

Important characteristics of structuralist models

1. differences in behaviour of different income groups matter

2. differences in available technologies in different sectors or countries matter.

3. structuralist models are based on the social relations between broad groups of economic actors

Intellectual Foundations

Keynes Kalecki,  Ricardo, Marx

=> Fundamental assumption: the economy’s institutions and social groups play causal roles in determining overall behaviour of the economy.

Theoretical Foundations

Richard Stone

Wynne Godley

Lance Taylor

Accounting Relationships between macroeconomic fundamentals

Problems

>Politics

Market-balance relationships constrain economic actors in important ways.

All the models you will see in this course are constructed directly from aggregates like household consumption, business investment, etc.

Stocks v Flows

flows (GDP is the sum of payments to labour, payments for ’surplus’ (profits) and payments for indirect taxes)

stocks (cumulative flow: the country’s net foreign asset position is the sum over time of its current account surpluses.)

All the models you’ll see in this class will be stock-flow consistent.

Causality

Structural Macreconomics Problems

1. Inequality and Poverty

Keynes, John Maynard KeynesThe General Theory of Employment, Interest and Money,  Chapters 6  & 7 (link to full text)

(Write a 1 page summary of each of these chapters as an exercise)

2. Inflation and Macro Stability

G. Calvo, L. Leiderman and C. Reinhart, Inflows of capital to developing countries in the 1990s, Journal of Economic Perspectives 10, n. 2 (1996),

Knut Wicksell, 1906, The Influence of the Rate of Interest on Prices,

3. Policy Instability

Prospects and Policies for the U.S. Economy. Why Net Exports Must Now Be the Motor for U.S. Growth  Wynne Godley, Alex Izurieta and Gennaro Zezza,

Methodology

1. Present a series of models, starting very simply, and gradually including all the real-world complications.

2. Write down a system of equations and accounting identities, attribute initial values to all stocks and all flows and to behavioural parameters

3. We’ll use stylised facts for most of these.

4. Then use numerical simulation to check the accounting and find the steady state of the economy

5. finally, we shock the system with varying assumptions to check robustness.

=> This gives us an ‘informed intuition‘ about the real world.

Notes for MDU Macroeconomics Lectures

Lecture 1 Inequality

Read before the lecture: Bowles et al: Chapter 14, The Mosaic of Inequality, pg. 343–374

Plan for today:

• Defining inequality
• Classes
• Stylised facts
• Measuring Well-being and Inequality
• GDP
• Gini
• Unequal Chances

[Read more →]

Plan for today:

• Are we rich because they are poor?
• Does income distribution really matter?
• Some more stylised facts
• Poverty and progress: some international comparisons
• The Income distribution of the world over time.
• Productivity, surplus, and incentives.
• Download the lecture slide here by right clicking and choosing save target as:

Download MDU_macro_lecture2_pandpoverty-1.pdf

Update 07.02.07: I’ve checked all the links, and they should all work now. Email me if they don’t.

1 Are we rich because they are poor?

First, look at the gapminder progress and poverty presentation. The presentation is very nicely put together, and points out several stylised facts Bowles et al go through, starting on page 377:

2. Some More Stylised Facts

1. Around the world, living standards vary dramatically.

2. Culture and natural resources aside, one prominent difference between nations that succeed and those that do not is the composition and efficacy of their institutions governing competition in particular and the economy in generalNations that started the process of industrialisation (the UK, France, etc) had a distinct advantage over late comers. This is extremely well put in Lucas, 2000, Some Macroeconomics for the 21st Century, (you need to be on campus to read this link) which we’ll go through in class later.

3. Improvements in living standards are dependent on distribution of the surplus product which is produced by the combination of labour, capital goods, knowledge and improving technology. In the poor countries of the world, rapid technological progress can be achieved by adopting newer technologies.

4. Capitalism is an economic system that provides strong incentives to accumulate capital (duh) which is used to produce increases in the output of goods and services. The adoption of capitalism does not guarantee success, however.

5. Where the government plays an active role is supporting the economy’s growth, the country will, generally speaking, be better off.

6. International investment, which is the diversion of the surplus product from one country to another, can help make countries richer through these transfers.

3. Does income distribution really matter?

Well, lots of people seem to think so. There are two sides of the argument. One side says that income distribution doesn’t really matter in the broad sense of the word ‘matter’. Of course individuals experiencing the income differential are going to feel it matters, but at a societal level the existence of haves and have-nots is really not a cause for concern, one side maintains, because some people work harder, use their innate talents more effectively, are luckier, and so forth. For representative accounts of the latest developments in each position, click here and here. Piketty-Saez is the latest academic contribution from the data side of this argument.

The other side maintains that inequality is a social ill that needs to be curbed through progressive government policies like social insurance and other transfers to Have-nots from Haves. The argument is very well explained here. There are ample we resources on the debate on inequality in the links I’ve mentioned already if you want to get more into this area.

There are some really shocking numbers out there, for instance we have

The figure is one such measure of inequality - the ratio of the wealth of the richest 1% to that of a household with typical wealth in the middle. As the figure indicates, wealth inequality has not only persisted, but also grown much larger over time. The richest 1% of wealth holders had 125 times the wealth of the typical household in 1962; by 2004 they had 190 times as much or $14.8 million in wealth for the upper 1% compared to just $82,000 for the household in the middle fifth of wealth. (via)

4. Poverty and progress: some international comparisons



Ok, we’ll talk in class just how difficult a concept ‘poverty’ is to define. Check this list out for a subtle entrance to the debate on poverty and progress.

Given that poverty is such a badly defined concept (from a measurement point of view) we need to look at many different measures of this phenomenon to get an idea of what it means:

1. Global health inequalities: an international comparison, British Medical Journal

2. Water Poverty globally, (see pg. 15)

3. The World Bank development indicators, 2006, focus on income;

4. Total Fertility Rates by region, Table 2a here;

5. The Demographic Divide: Insert table 2j here;

6. Pages 379, 380, 381, 382 in Bowles et al.

We could, of course, go on ad infinitum. This is just a taster of the type of differences that exist in these areas.

5. The Income distribution of the world over time.

See http://www.gapminder.org/, focus on Income Distribution changes over time up to 2005.

6. Productivity, surplus, and incentives.

Ok, we’ve seen enough data to choke a small pony. Now let’s look at some economic explanations for the differences in incomes, wealth, etc.

First, let’s get a question in our heads we should try to be answering all the time:

Why have some countries done so well in terms of economic progress, while others have not?

We need a theoretical framework to help answer this questions. But first, a quick overview of theories of growth and distribution: Inequality and Economic Performance,  Francisco H.G. Ferreira.

And now let’s define our terms:

• Productivity

• Surplus

• Incentives

7. Capitalism and Unequal Development

The Lucas (2000) Model of Uneven development. The Race-Horse Metaphor.

8. Further Reading



On the Evolution of the World Income Distribution

Charles I. Jones

The Journal of Economic Perspectives, Vol. 11, No. 3. (Summer, 1997), pp. 19-36.

Inequality among World Citizens: 1820-1992

François Bourguignon; Christian Morrisson

The American Economic Review, Vol. 92, No. 4. (Sep., 2002), . 727-744.

Every UL student needs to learn how to reference properly and effectively. Use this UL Library resource as a guide to creating proper references.

Here is a .pdf on the subject from Curtin University as well for handy reference.

[Download Handout 1]

Here is a handy piece of free, cross-platform software called Jabref to help you keep track of your references.

Don’t say I never gave ya nothin’.

Right Click the link below to download the course outline. Course pack coming soon.

[Download_Kinsella_EC6012_CourseOutline.pdf]