Theory of Economic Growth / Wachstumstheorie
to be held in English
The field of economic growth strives to analyze and explain the long-run evolution of economies with a particular focus on per-capita income which is usually taken as a proxy for the standards of living in a country. Starting with the fundamental contribution by Solow, the aim of this course is to develop models which offer a mathematical description of the growth process and its structural determinants. Our basic workhorses will be the neoclassical growth model and the overlapping generations (OLG) model. For these models, the theory of deterministic dynamical systems offers a rich set of mathematical tools to analyze the long-run behavior of the economy and to characterize its growth process. Building on the insights obtained, a second set of questions deals with how economic policy can promote economic growth and maximize consumer welfare. In this regard, the role of governmental debt and tax-transfer schemes such as Social Security and their impact on economic growth and per-capita income are discussed.