Memo Question for: Commercial and Other Pre-Industrial Economic Revolutions: The January 20 class painted a picture of an economic world in which (a) total factor productivity growth was very slow, and (b) as a result the overwhelming effect of technological progress was to increase human numbers rather than raise standards of living above bare subsistence. This week we read pieces all arguing that very important things were happening in northwestern Europe in 1500-1800 to raise the rate of total factor productivity growth. Pick one paper. Do you think it makes a convincing case? Taking as background January 20's class, how much of a difference in the global economic trend do you think that paper's factors by themselves could have made?
Memo Question for: Modern Economic Growth: Economics tends to view growth as a continuous and diffuse process: if one firm does not solve the problem of how to efficiently utilize resources, others will and drive the first out of business; if one technological vein plays itself out, energy will focus on others. The papers this week argue different. They argue either that some unique and particular institutions and technologies matter a lot--or, implicitly that they do not, for it is other institutions or technologies or simply the aggregate state of the economy that matters the most. What kinds of evidence not presented in this week's reading might lead you to come down on one or the other of the many, many sides in this debate?
Memo Question for: Slavery and Serfdom: In his Wealth of Nations, Adam Smith confidently asserted that slavery was uneconomic–that in commercial society, manumission was the road to higher productivity because the carrot of working for yourself is much more efficient than the stick of being whipped by others. He went on to say that unfree labor–slavery, serfdom, debt peonage, and so on–could only survive where the rich chose to pursue not the pleasures of prosperous living but the pleasures of domination–and that as humanity progressed morally and also progressed technologically to invent new commodities this love of domination would decline. This week we have a number of papers that conclude, as I read them, that Smith was horribly wrong. Can we rescue Smith's optimal, Panglossian view of the historical destiny of unfree labor? Why, in history, didn't Smith's argument work?
Memo Question for: Accounting for Growth: Week 5 Memo Question: Econ 210a: Accounting for Growth: This week we have a large number of disparate papers that pursue various strategies in trying to nail down—or at least to vaguely wave their hands in some direction at—the contributions of different sectors and investment efforts to the remarkable process of improvement in productivity and living standards that we call “modern economic growth”. Take any two of the papers this week, and compare them with respect to the strategies they follow to try to make their case. Which is the more convincing? How convincing is it? Why do you find it more convincing? What should the author of the other paper done to strengthen the case—or, rather, to see if there was a strong case?
Memo Question for: Cities: If commodities are fully rival and excludible—i.e., the resources devoted to the production of one unit are thereby used up, and cannot be used to aid in the production of a second unit; and if sellers can easily prevent non-buyers from benefiting from what they produce (and non-buyers can easily prevent sellers from imposing costs on them—then, if the distribution of wealth accords with desert and utility, the competitive market economy in equilibrium does the job. But how often is production really constant returns to scale? And how often are spillovers truly absent? And where and when are markets thick enough to actually be in any form of “competitive equilibrium”? Please reflect on these and related issues in the context of this week's readings.
Memo Question for: Extractive and Developmental Institutions: One of the deep problems with the economics that has lurked in the background so far this course is that we economists’ standard models lead almost inescapably to the conclusion that nothing is important. We start with a market-equilibrium benchmark. We introduce one friction, one inefficiency, one market failure. We calculate its effect on the equilibrium. We calculate the resulting Harberger triangle. We find that the Harberger triangle is small relative to the size of the economy. The standard dodge has become to appeal to “institutions”: things that construct the market or the absence of which means that markets are not properly constructed at all. How convincing is this dodge? What are these “institutions” that are appealed to? How convincing are the arguments that “institutions” in general have big effects? How convincing are the arguments that the favorite institutions of some team of economists are the ones that have the big effects?