University of Toronto
Department of Economics

Eco2704H1F Topics in Growth and Development

Fall 2012

Instructor: Professor Xiaodong Zhu

Office: Max Gluskin House, 150 St. George Street, Room 200
Phone: (416)978-7134 (St. George campus)

Office Hour: Monday 3:00am-4:00am or by appointment




Model-based accounting method

Some basic facts about the evolution of international income levels

PPT file



·      Week Two (September 17)


Structural Transformation: My lecture notes on two basic models of structural transformation

Presentation Slides



·      Week Three (September 24)


Structural Transformation: Long-term Growth

Presentation Slides


·      Week Four (October 1)


Structural Transformation: Cross-Country Income Differences

Presentation Slides


·      Week Five (October 8)


Thanksgiving, no class


·      Week Six (October 15)


Trade models:


Kiminori Matsuyama “Structural Change in an Interdependent World: A Global View of Manufacturing Decline.” Journal of

European Economic Association 2009;7(2-3):478-486.


Eaton-Kortum Model


·      Week Seven (October 22)


Student Presentations:


            Jessica Burley:  Dave Donaldson (2009): Railroads of the Raj: Estimating the Impact of Transportation Infrastructure.


                              Chaoran Chen: Michael Waugh (2009): International Trade and Income Differences, Presentation Slides


·      Week Eight (October 29)


Student Presentations:


                              Eric Zhi: Kei-Mu Yi and Jing Zhang (2010): Structural Change in an Open Economies


Trade models:


Melitz Model




·      Week Nine (November 5)




Diego Restuccia and Richard Rogerson (2008) “Policy Distortions and Aggregate Productivity with Heterogeneous Plants” Review of Economic Dynamics, vol. 11(4),pages 707-720, October


Chang-Tai Hsieh and Peter J. Klenow (2009) “Misallocation and Manufacturing TFP in China and India” Quarterly Journal

of Economics 124, November 1403-1448.



·      Week Ten (November 12)




Guest lecture by Diego Restuccia: The Size Distribution of Farms and International Productivity Differences


·      Week Eleven (November 19)


Student Presentations:


Ayesha Ali: Collard-Wexler, A., J. Asker, and J. De Loecker (2012): “Productivity Volatility and the Misallocation of Resources in Developing         



John Gillraine: Chang-Tai Hsieh, Erik Hurst, Chad Jones and Peter J. Klenow (2012) “The Allocation of Talent and U.S Economic




·      Makeup Class (November 23, 2-3:30pm, GE100)


Chang-Tai Hseh and Peter J. Klenow (2012) "The Life Cycle of Plants in India and Mexico


Atkeson, Andrew and Ariel Burstein (2008), “Pricing-to-Market, Trade Costs, and International Relative Prices," American Economic Review, 98 (5), 1998-2031



·      Week Twelve (November 26)


Finance and Development:


Douglas Diamond (1984) “Financial Intermediation and Delegated Monitoring” Review of Economic Studies 51(3) 393-414.


Jeremy Greenwood & Juan M. Sanchez & Cheng Wang, 2010. "Financing Development: The Role of Information Costs,”American

Economic Review, 100(4), pages 1875-91, September.



·      Week Thirteen (November 28, 4-7:00pm, GE168)


Student Presentations:


                                    Shiny Zhang: Laeven, Levine and Michalopoulos (2012) "Financial Innovation and Endogenous Growth", NBER Working

Paper No. 15356


            Presentation Slides


Ashique Habib: Gilchrist and Zakrajsek (2012) "Misallocation Losses Owing to Financial Distortions: Direct Evidence From Dispersion in Borrowing Costs"


            Presentation Slides


Kevin Devereux: Fumio Hayashi and Edward Prescott (2008) “The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy,” Journal of Political Economy, 2008, vol.116, no.4


            Presentation Slides