Lectures in the Winter Term
Endogenous Growth Theory
The lecture Endogenous Growth Theory investigates the determinants of the economic growth rate. Emphasis is placed on the analysis of the level and evolution of income and consumption in the long run as well as on the role of technological progress and human capital in the growth process. Understanding the determinants of growth is also useful in order to identify factors that may be utilized to overcome an existing slowdown in economic growth. In addition, the question of why some countries are poor and others are rich is addressed.
As a formal framework, the Ramsey model is used, which allows for the derivation of the aggregate growth rate as a result of individual optimizing decisions. In contrast to the Solow model, the Ramsey model explains crucial factors such as the saving rate endogenously. Technological progress however is still exogenous. The aim of endogenous growth theory is then to explain the emergence of technological progress within a model in order to gain more detailed insights into the determinants of economic growth.
Another key point of the lecture refers to the policy implications of the theories in the presence of market failures. Also, an overview is given how endogenous growth theory has changed in the past 15 years. The focus here is on the increasing empirical testing and further development of the basic models.
The course follows the textbooks by Barro and Sala-i-Martin (2004), Acemoglu (2009) and Maußner and Klump (1996).
The lecture is based on the theories of the New Economic Geography and deals with the real-wage-based incentives of labor mobility, which leads to spatial concentration processes. Using primarily quantitative methods, agglomeration and dispersion forces are presented, which form the basis of theory-based policy recommendations. Spatial Economics complements the picture of economic activity with the spatial factor.
The content of the lecture is based on the textbook: Brakman, S., Garretsen, H. and van Marrewijk, C.: 2009, The New Introduction to Geographical Economics, Volume 2, Cambridge University Press, Cambridge, UK.
Lectures in the Summer Term
Introduction to Economic Policy
Understanding basic concepts of micro- and macroeconomic theories and apply them to economic policy issues is mandatory for sound economic policy. It is necessary in order to be able to derive theory-backed recommendations and to understand how governmental market interventions may be justified from a welfare perspective. The lecture will explain, under which conditions market failures can occur and which economic policy instruments are available to policy makers to achieve economic goals. Furthermore, current economic policy issues are discussed.
The content of the lecture is based on the textbook by Klump (2013).
Innovation Theory and Policy
In the context of selected micro- and macroeconomic theories, the importance of alternative incentive mechanisms for the creation and diffusion of innovations is discussed and resulting growth processes are identified. Dynamic analyzes make it possible to investigate the consequences of individual decisions over time and as a result understand in particular the tension between static and dynamic efficiency. It is shown, which governmental policy interventions are appropriate and legitimate to address market failures in order to maximize the overall economic welfare.
Methods in Economic Dynamics
The workshop offers the possibility to deepen the understanding about different aspects of theoretical modelling of innovation-based growth and induced economic effects. This includes the implementation of formal models in computer algebra systems as well as recording, processing and econometric analysis of related data from relational databases (converning for example patents or trademarks). Moreover, methods of network theory are discussed.
Quantitative Methods in Economics
In order to derive theoretically sound economic policy recommendations, basic knowledge of both microeconomic and macroeconomic theories must be taught. These include the analysis of the behavior of individual economic agents and their allocation of scarce resources as well as (endogenous) growth and innovation models as used for example in regional economic models. Indispensable is the application of formal-analytical and numerical methods that increasingly require the use of modern software.
In the seminar, various economic topics should be displayed using the software package Mathematica, analyzed and, where appropriate, illustrated by an example.