Natural Resource Economics, IMF Institute, Washington, DC, Spring 2010 and Fall 2011. IMF Institute Course Outline
Ph.D. Environmental and Resource Economics 2011 (Tinbergen Institute, Amsterdam/Rotterdam, with Cees Withagen) This course consists of 2.5 lectures on the economics of resource-rich economies (van der Ploeg), 2 lectures on the Green Paradox (van der Ploeg/Withagen), and 2.5 lectures on the issue of trade versus environment (Withagen).
I. Economics of natural resources (van der Ploeg): Why do countries rich in natural resources varying from gold, silver, copper, diamonds, oil, gas etc. often have such a disastrous economic performance with very dire social consequences. Indeed, that is the plight of many economies in Africa, witness for example Congo and Nigeria. Still, other economies such as Botswana and Norway seem to fare relatively well. The lectures provide empirical evidence and also give theoretical insights on why some resource-rich economies do well and others do badly, and we then move on to derive welfare-based policy recommendations. We need to go further than the usual harmful Dutch disease effects originating from an appreciation of the real exchange rate, a decline of the traded sector and a loss in learning by doing, and consider political economy of rent grabbing, corruption and conflict. In addition, we will cover how exhaustible natural resources may be transformed in to reproducible physical or human capital by saving the Hotelling rents on natural resources both in homogenous and in fractionalized societies. The theoretical underpinning, or lack of it, will be discussed as well. We will also discuss optimal ways of harnessing windfalls such as sovereign wealth funds, citizen dividends, public infrastructure and paying off debt. We will pay attention to capital-scarcity, bottlenecks in the non-traded and construction sectors, and also to the problem of coping with the notorious volatility of commodity prices.
Lecture 1A: Survey of the natural resource curse (RP 5, PP 1, 6)
Lecture 1B: Is the natural resource curse avoidable? Empirics (RP 3, 24, 33)
Lecture 2A: Harnessing natural resource windfalls (RP 15, 9, 27, PP 4)
Lecture 2B: Dutch disease dynamics, home-grown capital and absorption constraints
Lecture 2C: Aggressive oil depletion and precautionary oil buffers (RP 21)
Lecture 3A: Rapacious resource extraction (RP 2, 10, 16) and War and natural resource extraction (RP 17, 18, 42)
Literature: Barbier, E.B. (2005). Natural Resources and Economic Development, Cambridge University Press, Cambridge; Dasgupta, P.S. and G.M. Heal (1979). Economic Theory and Exhaustible Resources, Nisbet/Cambridge. Chapters 6-8, 10-11. OxCarre Research papers (RP’s) and Policy Papers (PP’s) to be found on http://www.oxcarre.ox.ac.uk/index.php/research-papers-2/.
II. Climate Policy and the Green Paradox
Lecture 4B: Climate change, natural resources and the Green Paradox (RP 35, PP 5)
Lecture 4B: Growth and the optimal carbon tax (RP55, PP7)
Lecture 5A: The optimal carbon tax: Oil coal or renewables (RP56)
Literature: Tahvonen, O. (1997). Fossil fuels, stock externalities, and backstop technology. Canadian Journal of Economics, 30, 855-874; Sinn, H.W. (2008a). Public policies against global warming, International Tax and Public Finance, 15, 4, 360-394; Gerlagh, R. (2011). Too much oil, CESifo Economic Studies, 57, 1, 79-102; Hoel, M. (2008), Bush meets Hotelling: effects of improved renewable energy technology on greenhouse gas emissions, Working Paper 2492, CESifo, Munich; Golosov, M., J. Hassler, P. Krusell and A. Tsyvinski (2010). Optimal taxes on fossil fuel in general equilibrium, mimeo.
III. Trade Liberalization and Environmental Quality (Withagen): Environmentalists have expressed strong criticism against the globalization of international trade, claiming that it has adverse side-effects in the form of a degradation of the environment. We study the conditions under which trade increases pollution in small open economies. Topics addressed are: -Pollution Haven Models of International Trade Is trade driven by environmental policy differences necessarily bad for the environment? Do rich countries benefit at the expense of poor countries? -Factor Endowments, Policy Differences and Pollution We explore the trade-off between factor endowments and endogenous environmental policies as causes for trade. -Is Free Trade Good for the Environment? Empirics The previous two topics give rise to (i) the pollution haven hypothesis and (ii) the factor endowment hypothesis. Both are simultaneously tested for. Lectures 5B, 6 and 7.
Literature: Copeland, B. R. and Taylor, M.S. (2003). Trade and the Environment: Theory and Evidence, Princeton University press, Princeton.
Growth theory, FEE, University of Amsterdam, Fall 2009 and Fall 2010 (with Tim Willems).
Charles I. Jones (2002), Introduction to Economic Growth, New York: W.W. Norton, 2nd edition
Acemoglu, D., S. Johnson and J. Robinson (2001), “The Colonial Origins of Comparative Development: An Empirical Investigation”, American Economic Review, 91 (5), pp. 1369-1401.
Aghion, P. and P. Howitt (1992), “A Model of Growth Through Creative Destruction”, Econometrica, 60 (2), pp. 323-351.
Benhabib, J. and M.M. Spiegel (1994), “The Role of Human Capital in Economic Development: Evidence from Aggregate Cross-Country Data”, Journal of Monetary Economics, 34, pp. 143-173.
Hall, R.E. and C.I. Jones (1999), “Why Do Some Countries Produce So Much More Output Per Worker Than Others?”, Quarterly Journal of Economics, 114 (1), pp. 83-116.
Jones, C.I. (1995), “Time Series Tests of Endogenous Growth Models”, Quarterly Journal of Economics, 110 (2), pp. 495-525.
Mankiw, N.G., D. Romer and D.N. Weil (1992), “A Contribution to the Empirics of Economics Growth”, Quarterly Journal of Economics, 107 (2), pp. 407-437.
Ranciere, R., A. Tornell and F. Westermann (2008), “Systemic Crises and Growth”, Quarterly Journal of Economics, 123 (1), pp. 359-406.
M.Phil. in Economics, Lectures 15 (Resource curse) and 16 Climate change and developing countries) for Development Economics, University of Oxford, Fall 2009.
MFE Elective ‘The International Economy: Trade and Globalisation, Summer Term 2009-11, Oxford Business School, University of Oxford (With Tony Venables and Beata Javorcik). MFE Outline.pdf
B.Sc. Macroeconomics 208BE, English Language 2008-9 (University of Amsterdam, with Petr Sedlacek and Ward Romp)
- M. Gärtner: Macroeconomics – a European text, Pearson Education Limited, 2003. Chapters 1 – 15, except 12,13 (details in course program).
- G. Mankiw, Macroeconomics, chapters 16 and 17 (used in first week).
- Lecture slides and Workbook with additional exercises (Blackboard).
- Additional text: IMF World Economic Outlook April 2008 Chapter 1 (see weblink).
Grading: The final grade is based for 85% on written three-hour exam based on required literature. The exam is closed book. Passing the written exam is a minimum requirement (minimum 50% score) to pass the course. The remaining 15% is based on homework exercises: 3 times a set of exercises, 5% each, hence 15% of total. Missing marks for homework assignments cannot be compensated. Homework should be handed in at the beginning of class indicated in the schedule (in weeks 3,5,7). Marks for homework remain valid for retake exams during the course year.
Suggested time allocation: Course attendance 42 hours. Reading literature 120 hours. Preparing classes and exercises 50 hours. Homework (exercises) 28 hours. Exam preparation 40 hours. Total 280 hours.
Ph.D. Topics in Public Finance Reading List 2007-8 (EUI, Florence)
Ph.D. Topics in Public Finance Background Reading List 2007-8 (EUI, Florence)
Public Policy and the Welfare State Kiel ISEO Summer School on Public Policy, 2007
M.Sc. Macroeconomics I 2002-3 (LSE, London)