The goal is to understand the sources of economic growth and of growth rate differentials between countries. We use modern growth theory but also catching-up theory to shed light on these issues, and we use international macro-data to identify and quantify aforementioned international growth differentials between (clusters of) countries and tendencies for convergence and/or divergence within and between clusters of countries. Students will develop a deep understanding of the relationship between economic growth and distribution issues and the policies affecting these.

Modern growth-theory is concerned with explaining the trend in output per capita and how that trend could be influenced through growth policies. It focusses in particular on the accumulation of human capital and technology that are generally thought to be the drivers of growth. It also emphasizes the role of economic incentives which influence such accumulation decisions. Changing incentive schemes through policy interventions then makes it possible to influence growth performance. Identifying such growth policies is of crucial importance, because in many parts of the world growth is a way to elevate people out of poverty. In other parts of the world it is a way to improve the quality of life not just by increasing consumption of goods and services but also of intangibles like environmental quality. Modern growth theory has turned the growth process from something that was largely out of the control of human beings (i.e. exogenous) into something that actually is the result of interactions between human beings and decisions made by human beings, which makes growth endogenous as these decisions are incentive driven. The endogeneity of growth then turns growth performance at least in part into a policy matter.
The course consists of three parallel activities:
1.) the study of the underlying theories,
2.) execution of empirical assignments, and, also as part of those assignments,
3.) the review and analysis of alternative growth policies.