This is an intermediate-to-advanced microeconomic theory course with a development focus. Special attention is paid to the role of informational asymmetries and subsistence constraints, to the need for family or village-level informal arrangements in the absence of complete markets, and to the causes of high fertility, infant mortality and child labour. Elements of contract and game theory are introduced and utilized.
Bardhan, P. and C. Udry (2001), Development Microeconomics, Oxford University Press
Cigno, A. and F. C. Rosati (2006), The Economics of Child Labour, Oxford University Press
Varian, H. R. (2014), Intermediate Microeconomics, 9th ed., W. W. Norton & Co.
Obiettivi Formativi
Training in modern microeconomics with special emphasis on development issues.
Prerequisiti
Given the substantial analytical content, the course presupposes a good grounding in elementary-to-intermediate microeconomics and familiarity with the standard mathematical tools of economic theory (analytical geometry, infinitesimal calculus, optimization with equality and inequality constraints).
Metodi Didattici
Formal lectures with student interaction.
Altre Informazioni
Regular attendance is strongly recommended.
Modalità di verifica apprendimento
Final written examination with open questions.
Programma del corso
1. Revision of general equilibrium and welfare economics
Reading:
Varian, Ch. 32 and 33
2. Intertemporal choice, uncertainty, insurance and asymmetric information, informal insurance
Basic reading:
Varian, Ch. 10, 12 and 38
Further reading:
Fitzsimons, E. (2007), “The effects of risk on education in Indonesia”, Economic Development and Cultural Change, vol. 56, pp. 1-25
Hirschleifer, J. and J. G. Riley (1979), “The analytics of uncertainty and information: An expository survey”, Journal of Economic Literature, vol. 17, pp. 1375-1421
3. Credit markets with moral hazard and adverse selection, microcredit
Reading:
Bardhan and Udry, Ch. 7, 8 and 11 (Sec. III)
Morduch, J. (1999), “The microfinance promise”, Journal of Economic Literature, vol. 37, pp. 1569-1614
4. Asset and land markets, farmer-trader contract, share-cropping, principal-agent contract, land reform
Basic reading:
Bardhan and Udry, Ch. 6 (Sec. I and II) and 9 (Sec. I and III)
Varian (2014), Ch. 11
Hirschleifer, J. and J. G. Riley (1979), “The analytics of uncertainty and information: An expository survey”, Journal of Economic Literature, vol. 17, pp. 1375-1421
Further reading:
Adamopoulos, T. and D. Restuccia, (2019), Land Reform and Productivity: A Quantitative Analysis with Micro Data. NBER WP 25780
5. Labour markets, efficiency wages, long-term employment contracts, bonded labour
Basic reading:
Bardhan and Udry, Ch. 4 and 9 (Sec. II)
Further reading:
Genicot, G. (2002), “Bonded labor and serfdom: a paradox of voluntary choice”, Journal of Development Economics, vol. 67, pp. 101–127
6. Migration
Basic reading:
Bardhan and Udry, Ch. 5
Dustmann, C., T. Frattini and A. Glitz (2008), “The labour market impact of immigration”, Oxford Review of Economic Policy, vol. 24, pp. 478-495
7. Education, child labour and intergenerational transfers
Basic reading:
Cigno and Rosati, Introduction and Ch. 2, 5, 6, 8, 9
Cigno, A. (2011), Lectures on Fertility, Savings, Intergenerational Transfers and Gender, Secs. 1, 2 and 3, Thuenen Series of Applied Economic Theory N. 119, University of Rostock, Institute of Economics
Further reading:
Bales, K. (2000), Disposable People: New Slavery in the Global Economy, University of California Press
Wydick, B. (1999), “The Effect of Microenterprise Lending on Child Schooling in Guatemala”, Economic Development and Cultural Change, vol. 47, pp. 853-869
8. Conditional transfers
Basic reading:
Cigno, A. (2012), “How to deal with covert child labor, and give children an effective education, in a poor developing country”, World Bank Economic Review, vol. 26, pp. 61-67
Further reading:
Andersen, J. J., N. Johannesen and B. Rijkers (2020), Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts. World Bank Policy Research WP 9150
Bourguignon, F., E. H. G. Ferreira and P. G. Leite (2003), Conditional cash transfers, schooling and child labor: Microsimulating Brazil’s Borsa Escola, World Bank Economic Review, vol. 17, pp. 229-254
Chiapa, C. and L. Juarez (2016), “The schooling repayment hypothesis for private transfers: Evidence from the PROGRESA/Oportunidades experiment”, Review of Economics of the Household, vol. 14, pp. 811–828
Lincove, J. A. and A. Parker (2015), “The influence of conditional cash transfers on eligible children and their siblings”, Education Economics, vol. 24, pp. 352-373
9. Fertility and infant mortality
Basic reading:
Cigno and Rosati, Ch. 3 (Sec. 3.1), 5 and 9
Further reading:
Cigno, A. (1998), “Fertility decisions when infant survival is endogenous”, Journal of Population Economics, vol. 11, pp. 21-28
Manuelli, R. E. and A. Seshadri (2009), "Explaining international fertility differences", Quarterly Journal of Economics, vol. 124, pp. 771-807
10. International trade and the skill premium
Basic reading:
Cigno and Rosati, Ch. 4
Cigno, A., G. Giovannetti and L. Sabani (2018), “The role of trade and offshoring in the determination of relative wages and child labour”, Journal of International Trade and Economic Development, vol. 27, pp. 267-292
Further reading:
Goldberg, P. and N. Pavcnik (2007), “Distributional effects of globalization in developing countries”, Journal of Economic Literature, vol. 45, pp. 39–82
Gries, T. and R. Grundmann (2014), “Trade and fertility in the developing world: the impact of trade and trade structure”, Journal of Population Economics, vol. 27, pp. 1165-1186
11. Games, markets and norms
Reading:
Cigno and Rosati, Ch. 1 (Sec. 1.3)
Cigno, A. (2011), Lectures on Fertility, Savings, Intergenerational Transfers and Gender, Secs. 3 and 4
Varian, Ch. 29, 30
Weintraub. E. R. (1975), Conflict and Cooperation in Economics, especially Ch. 2 and 5, Macmillan Press