Master « Economie de la mondialisation »
1st semester
Development Economics (part 2)
Part 1 is ensured by Jean-Claude Berthelemy
Jean-Bernard Chatelain
Professor of Economics and Finance
Centre d’Economie de la Sorbonne (CES)
Université Paris 1 Panthéon Sorbonne
Paris School of Economics
Co-Director of the CNRS European Research Group on Money Banking
and Finance
Web page: http://www.parisschoolofeconomics.eu/fr/chatelain-jeanbernard/publications/
Email : jean-bernard.chatelain@univ-paris1.fr
Course website:
http://epi.univ-paris1.fr/08050578/0/fiche___pagelibre/&RH=epi-342&RF=epi342-MM0002v20
Course content and objectives:
This advanced course includes two parts:
(a) Applied Econometrics Research: Pitfalls of Macroeconomic Growth regressions: The case of
Foreign Aid and Growth. (3 sessions of 3 hours, two papers studied during each of these sessions)
(b) Theory: Imperfect institutions, Poverty Trap and Growth ("Big bills left on the Sidewalk").
(3 sessions of 3 hours: two papers studied during each of these sessions)).
All the papers are online with direct access on the EPI course website.
Duration: 18 hours
Detailed content of each lecture
1. Introduction to the seminar: Determinants of Growth; Cross Country growth regressions.
Gapminder software and its data set are useful to visualize cross country data over time, provided
the variance of data is not too large (e.g. no hyperinflation). www.gapminder.org/ Advertisement
by Rosling at TED: www.gapminder.org/videos/ted-us-state-department/
www.centrecournot.org/ www.centrecournot.org/index.php/2010/10/13/how-to-regress-well-canstatistics-do-without-artefacts/
2.1. Burnside and Dollar 2000: Foreign Aid and Growth
Link to database, STATA programs and Easterly Levine Roodman replication:
www.cgdev.org/content/publications/detail/11941/
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A highly pedagogical introduction to linear regression (in French): pp.307-314: influence statistics
(selecting outliers: Burnside and Dollar graphs is related to dfbetas: change of parameter when 1
observation removed). www-rocq.inria.fr/axis/modulad/numero-35/Tutoriel-confais-35/confais35.pdf
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easterly_levine Roodman 04.pdf
BURNSIDE and DOLLAR A reply.pdf
Dollar Burnside.pdf
2.2. Meta Analysis on Aid and Growth
Econometrics of the effect of Foreign Aid or Openness on Economic Growth (cross country
regressions). Key problem of these studies: What to do when simple correlations which are not
statistically different from zero? We may have spurious multiple regressions effects? Should we
separate the sample in two parts and use interaction terms? How Meta Analysis be useful?
Synthesis of 3 meta-analysis in the paper by Doucouliagos and Paldam:
mit.econ.au.dk/vip_htm/MPaldam/Papers/Meta-Survey.pdf figures of the paper:
mit.econ.au.dk/vip_htm/MPaldam/Papers/Meta-Survey-T&F.pdf Martin Paldam's page:
mit.econ.au.dk/vip_htm/MPaldam/papers-meta.php4 Doucouliagos Paldam. ppt of presentation by
3.1. David Roodman on aid and growth
Pitfalls in the growth/aid literature: Through the looking glass.
3.2. Endogeneity and Instrumental variables, time invariant variables in panel data
time invariant variables in panel data
Roodman too many instruments with GMM on panel data
4. Mancur Olson / Eggertsson Imperfect Institutions: Why Iceland starved for 1000 years
Mancur Olson (1996) "Big Bills Left on the Sidewalk: Why Some Nations are Rich, and Others
Poor".
Thraiin Eggertsson (1996) "No experiments, monumental disasters: why Iceland starved." Book
"Imperfect Institutions".
5.1. Are we Collapsing? Jared Diamond: How Societies Choose to Fail or Succeed
Are We Collapsing? A Review of Jared Diamond’s Collapse: How Societies Choose to Fail or
Succeed. Jared Diamond video at TED
5.2. Fukuyama: State Building: Levy Fukuyama (2010): Development Strategies: Integrating
Governance and Growth
6.1. Solutions when the solution is the problem: Woolcock_Solutions.pdf
6.2. Parente Prescott Barriers to Riches
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