PhD_Seminar_2013.pdf

Academic Unit – International Economics

Course title

Doctoral Seminar in Resource Economics (I and II)

ECON E1025

THURSDAYS 1415 – 1600 (H25)

Course Description

This course introduces first year doctoral students in economics to various topics at the frontier of the field of resource economics. The purpose of the course is to provide the student with a short introduction to the literature in the area of a current topic in this field, and then to discuss (in seminar format) research issues and agendas associated with this topic. At the end of each Topic, the students will be required to participate in a seminar session discussing the literature and issues related to that topic. At the end of each term, the students will be required to make a presentation of a research topic or issue of interest to the student. (see the outline of the course attached at end of the course syllabus and reading list).

The course is taught jointly by lecturers from both the Graduate Institute and from the University of Geneva, in order to allow students to hear topics from experts in the particular fields. Students from the Graduate Institute will be supervised in their taking of the course by Professor Swanson. Students from the University of Geneva will be supervised in their taking of the course by Professor di Falco. At the end of each term (final three weeks), both professors di Falco and Swanson will attend the course and hear presentations from the students. Students should contact the supervisor from their university concerning this presentation, and their preparation for it. The course is evaluated entirely on the basis of the paper that the student generates in preparation for the presentation. This paper should be no more than 5000 words, i.e. approximately 10-15 pages, in length, discussing one topic or research paper of the student’s interest.

The course is required for any student considering undertaking resource economics work within the context of his or her doctorate, and so is recommended to anyone who might consider the later pursuit of that option. Please feel free to contact your supervising instructor or an interested lecturer concerning your interests.

The topics and lecturers are summarized on the last page of this course syllabus. Two of the lecturers are from the University of Geneva (Lucchetti and di Falco) and four are from the Graduate Institute (Lanz, Swanson, Eaton and Noailly). We welcome your attendance and participation, and we hope to use this opportunity to introduce ourselves and our research areas to interested doctoral students.

Syllabus

The syllabus and reading lists for the course in 2013-2014 is as follows (mandatory readings *):

DOCTORAL SEMINAR (I) - AUTUMN SEMESTER 2013

Term 1: Coordinated by Prof. Tim Swanson, IHEID

The first term will focus in particular on the theory of natural resource economics, and its role and implications for growth, development, ownership rights and political economy.

Topic 1 (weeks 1-3): Horizontal and Vertical Aspects of Regulation (

)

The first week considers how strategic interaction is modeled in the context of the commons, using international environmental agreements as an example. The second week considers how regulation occurs in the context of asymmetric information, using governmental regulation as the context.

Week 1. Management of Common Pool resources

The theory of cooperation: tragedy of the commons, allocation of property rights and bargaining. Relevant notions of non-cooperative game theory and mechanism design. Managing Global public goods.

“Games and resources”, B.Harstad and M.Liski. NBER working paper, (2012). **

“ A Mechanism Design Approach to Climate Agreements “, D. Martimort and W. Sand-Zantman, working paper (2012).**

Mechanism Theory, M. Jackson, (2003).

“Collective Action and the Evolution of Social Norms,” E. Ostrom, Journal of Economic Perspectives, 14, 3:137-158 .

“Can uncertainty alleviate the commons problem?, Bramoullé, Y. and N. Treich, Journal of the European Economic Association, vol. 7, 1042-1067 (2009).

“Providing public goods in the absence of strong institutions”, A. Gerber and P.C. Wichardt, Journal of Public Economics, vol. 93, pp. 429–439 (2009).

Week 2. Regulation of an externality under market imperfections.

Taxes and pollution permit markets with asymmetric information and other imperfections. Auctions and related mechanisms.

Implementing the Efficient Allocation of Pollution, John Duggan and Joanne Roberts,

American

Economic Review,

The Costs of Environmental Regulation in a Concentrated Industry, S. P. Ryan, Econometrica, Volume 80, Issue 3, pages 1019–1061, (2012).

Week 3. Seminar.

Discussion: What is the impact of introducing uncertainty and/or asymmetric information in the model of coal in the following paper?

Buy Coal! A Case for Supply-Side Environmental Policy, Bard Harstad, Journal of Political Economy, vol. 120, no. 1, (2012).**

Topic 2 (weeks 4-6): Climate Modeling: Problem and Policy (Dr. Bruno Lanz)

An examination of various modeling approaches to the problem of climate change, examining how dynamic models can be applied in Integrated Assessment of economic and environmental processes. And the

examination of various approaches to regulating climate change.

Week4: Integrated assessment models and the value of carbon

The aim of this session is to gain a thorough understanding of the determinants of the carbon price in integrated climate-economy models. We will also cover the issue of `tipping points', or non-linearities in the climate system, and their role in formulating a climate policy.

Note: The students are expected to have some familiarity with first-generation models such as Nordhaus' DICE model and the analysis in the Stern review. Please review these in advance, e.g. in Nordhaus and Boyer, Warming the World.

Mikhail Golosov, John Hassler, Per Krusell, and Aleh Tsyvinski (2013), "Optimal taxes on fossil fuel in general equilibrium", NBER Working paper**

Yongyang Cai, Kenneth Judd and Thomas Lontzek (2012), "Tipping Points in a Dynamic Stochastic IAM ", RDCEP Working Paper**

Week 5: Technical change and fossil energy consumption

This session studies the technological responses to climate change in the context of an endogenous growth model with clean and dirty technologies. We then study what a transition to clean technologies would entail in an integrated climate-economy model.

Daron Acemoglu, Philippe Aghion, Leonardo Bursztyn, and David Hemous (2012), "The Environment and Directed Technical Change", American Economic Review, 102(1), 131-166**

Week 6: Seminar- How should we think about the economic impacts of climate change?

Policy recommendation from integrated assessment models are based on strong assumptions about the future costs of climate change. The aim of this lecture is to discuss alternative approaches to evaluate the costs of climate change.

Discussion Questions:

- What are the key methodological challenges to measure the impact of climate change? - How can uncertain extreme events be included in decision-making?

Deschênes, Olivier, and Michael Greenstone (2007), "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather", American Economic Review, 97(1): 354-385

Martin Weitzman (2009), "On Modeling and Interpreting the Economics of Catastrophic Climate Change", Review of Economics and Statistics, 91(1), 1-19**

Topic 3 (weeks 7-9): Natural Resource Economics, Growth, Population and Development:

Unified Growth Theory (Prof. T. Swanson)

This topic examines the recent literature looking at ancient history: the interaction of population, economic development and resource constraints – over the very long run. The initial week will look at the manner in which population and development interacted in the 1) the first 100,000 years of human history; 2) the last 10,000 years of human history (with the advent of agriculture); and 3) the most recent 100 years of human history (with industrialization and the demographic transition). The second week will look at how resource constraints have interacted with population in the course of development and technological change. The

seminar discussion will look at the problem of optimal population from the global perspective, and (if there is an optimal scale to the economy) how it might be pursued through decentralized policy making.

Week 7: Population, Growth and Development- a quasi-historical perspective

Clark2008, A farewell to alms: a brief economic history of the world, Princeton University Press.*

Goodfriend, M. and McDermott, J., 1995, Early development, The American economic review, 85(1):

116—133.

Guinnane, Timothy W and Okun, Barbara S and Trussell, James, 1994. What do we know about the

timing of fertility transitions in Europe?, Demography, 31:1--20

Hansen, G.D. and Prescott, E.C., 2002. Malthus to solow, The American Economic Review,

92(4):1205—1217.

Charles I. Jones, 2001. Was an Industrial Revolution Inevitable? Economic Growth Over the

Very Long Run, Advances in Macroeconomics, 1(2).**

Kremer, M., 1993. Population growth and technological change: one million BC to 1990, The

Quarterly Journal of Economics}, 108(3):681—716.**

interaction in the accelerating stage, Mathematical Population Studies, 1(3): 265—288.

Lucas, R.E., 2002. The industrial revolution: Past and future, Lectures on economic growth,

109—188.

Strulik, H. and Weisdorf, J., 2008. Population, food, and knowledge: a simple unified growth theory,

Journal of Economic Growth,13:195—216.

Tamura, R., 2002. Human capital and the switch from agriculture to industry,

Journal of Economic Dynamics and Control, 27(2):240—242.

Voigtlander, Nico and Voth, Hans-Joachim,

How the West 'Invented' Fertility Restriction, National Bureau of Economic Research Discussion

Paper, 2011.

Voigtlander, Nico and Voth, Hans-Joachim, Malthusian Dynamism and the Rise of Europe: Make

War, not Love, The American Economic Review, 2009, pp. 248—254.

Week 8: Are there limits to population, growth and development?

Cohen, J. 1995. How many people can the earth support?, WW Norton & Company.

Galor, O. and Weil, D.N., 2000. Population, technology, and growth: From Malthusian stagnation to

the demographic transition and beyond, American economic review, 90(4):806—828.**

Galor, O. 2011. Unified Growth Theory, Princeton University Press.

Peretto,P. and Valente, S. 2012. Growth on a Finite Planet, Duke University Working Paper.**

Week 9: Seminar - Land Allocation, Population, Growth and Development

Discussion Question: Is there any means of managing global population? Is it optimal to do so?

Lanz,B, Dietz,S. and Swanson,T. 2013. Economic growth, population dynamics and the management of land conversions. Working Paper.

Student Presentations (weeks 10-12) (Di Falco and Swanson)

Students will select an article in a field of interest for presentation to the seminar, with questions for discussion by the seminar group.

DOCTORAL SEMINAR II (Spring 2014)

The second term focuses on specific applications of natural resource economics to the fields of adaptation, agricultural development, and technological change.

Topic 1 (weeks 1-3): Adaptation to Climate Change (Prof. Salvatore di Falco)

Examination of the empirical evidence on how adaptation occurs in the presence of climate change and its impacts in terms of variability and uncertainty.

Week 1: Climate Change Induced Impacts on Agriculture

IPCC (Intergovernmental Panel on Climate Change) (2007) Summary for Policymakers. Climate Change 2007: The Physical Science Basis. Working Group I Contribution to IPCC Fourth Assessment Report: Climate Change 2007, Geneva.

Lobell, D.B, M. Bänziger, C. Magorokosho, and B. Vivek. 2011. Nonlinear Heat

Effects on African Maize as Evidenced by Historical Yield Trials.

Nature Climate

Change

1: 42–45.

Dell, M., B. Jones and B. Olken. “Temperature Shocks and Economic Growth: Evidence from the

Last Half Century”

American Economic Journal: Macroeconomics,

4(3), July 2012, pp. 66- 95.

Mendelsohn, R., W. Nordhaus and D. Shaw (1994) ‘Measuring the impact of global warming on

agriculture’,

American Economic Review

84: 753-771.

Mendelsohn, R., A. Dinar, and L. Williams (2006) ‘The distributional impact of climate change on

rich and poor countries’,

Environment and Development Economics

11: 1-20.

Week 2: Modelling Adaptation to Climate Change in Agriculture

Di Falco, S., M. Veronesi and M. Yesuf (2011). Does adaptation to climate change provide food

security? A micro perspective from Ethiopia’,

American Journal of Agricultural Economics

93(3):

825-842.

Di Falco, S. and M. Veronesi (2013). How African Agriculture Can Adapt to Climate Change? A

Counterfactual Analysis from Ethiopia,

Land Economics

November issue

Seo, S.N. 2010. A Microeconometric Analysis of Adapting Portfolios to Climate

Change: Adoption of Agricultural Systems in Latin America.

Applied Economic

Perspectives and Policy

32: 489-514.

Week 3: Seminar - How can farmers adapt to climate change? Critically discuss the possible set of options with a special focus on Africa

Topic 2 (weeks 4-6): Productivity and Growth in the Long Run (Dr. Derek Eaton)

This topic will examine the empirical record on productivity and growth in agriculture at the sectoral (macro) level, concentrating on recent history since 1950. Micro-level studies have long shown a high rate of return to investments in agricultural research and development. A major focus of research has been on appropriate methods for measuring total factor productivity given data limitations, in addition to the more frequent use of partial productivity measures, such as land productivity (or even yields) and labour productivity. The readings comprise examples of the various methods applied, including residual approaches, stochastic frontier analysis, and data envelopment analysis. Evidence is mixed on whether productivity growth in agriculture is decreasing, perhaps due to diminishing returns to R&D investments, even when examining the same productivity measures. Another issue of empirical and policy interest concerns the extent to which convergence across countries in agricultural productivity is taking place. With non-rival and non-excludable characteristics, agricultural technologies can be expected to diffuse fairly rapidly. On the other hand, agricultural production technologies are often location-specific, reflecting both natural and institutional factors. Finally, interest also centres on the factors driving productivity growth, or technological change, and the extent to which these can be influenced by policy, either in terms of investments in R&D, infrastructure, human capital, etc. or in policies that affect innovation and reallocation of factors of production.

Week 4 – Agricultural Productivity Analysis

Eberhardt, Markus, and Francis Teal. 2012. “No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis.” Oxford Bulletin of Economics and Statistics. Forthcoming.

doi:10.1111/j.1468-0084.2012.00720.x.**

Evenson, Robert E., and Keith O. Fuglie. 2010. “Technology Capital: The Price of Admission to the Growth Club.” Journal of Productivity Analysis 33 (3) (June 1): 173–190. doi:10.1007/s11123-009-0149-3.

Headey, Derek, Mohammad Alauddin, and D.S. Prasada Rao. 2010. “Explaining Agricultural Productivity Growth: An International Perspective.” Agricultural Economics 41 (1): 1–14.

doi:10.1111/j.1574-0862.2009.00420.x.

Nin, Alejandro, Channing Arndt, Thomas W. Hertel, and Paul V. Preckel. 2003. “Bridging the Gap Between Partial and Total Factor Productivity Measures Using Directional Distance Functions.” American Journal of Agricultural Economics 85 (4): 928–942. doi:10.1111/1467-8276.00498.

Week 5 – Empirical Analysis of Technical Change and TFP

Chavas, Jean-Paul, Michael Aliber, and Thomas L. Cox. 1997. “An Analysis of the Source and Nature of Technical Change: The Case of U.S. Agriculture.” The Review of Economics and Statistics 79 (3) (August): 482–492. doi:10.2307/2951395.

Martin, Will, and Devashish Mitra. 2001. “Productivity Growth and Convergence in Agriculture Versus Manufacturing.” Economic Development and Cultural Change 49 (2) (January): 403–422.**

Week 6: Seminar- Contribution of Biodiversity in Agriculture

How have genetic resources contributed to agricultural productivity? How can this be estimated?

Goeschl, Timo, and Timothy Swanson. 2002. “The Social Value of Biodiversity for R&D.” Environmental and Resource Economics 22 (4) (August): 477–504.**

Zohrabian, Armineh, Greg Traxler, Steven Caudill, and Melinda Smale. 2003. “Valuing Pre-commercial Genetic Resources: A Maximum Entropy Approach.” American Journal of Agricultural Economics 85 (2): 429– 436.**

Topic 3 (weeks 7-9): Technological Change, Innovation and IPR: Green Economies (Dr. Joelle

Noailly)

This series introduces the student to the role of technological change into the field of environmental

economics. The development and diffusion of green technologies, such as solar energy or electric and

hybrid cars, is an important means to address climate change. Yet, market forces alone provide little

incentives for investing in these technologies and environmental policy is needed to encourage the

innovation and diffusion of green technologies.

The first two lectures will present the market failures associated with environmental technologies and

will discuss the effectiveness of the various policy instruments to stimulate innovation and diffusion of

green technologies, based on both theoretical arguments and empirical evidence. The seminar will

discuss the recent paper on “The environment and directed technical change” by Acemoglu et al

(2012) and its policy implications for moving towards a green economy. The discussion will focus

particularly on the pros and cons of green industrial policies.

Week 7: The Interaction between Regulation and Innovation

Bauman, Y., M. Lee and K. Seely (2008) Does technological innovation really reduce marginal

abatement costs?

Environmental and Resource Economics

40, 507-527.

Popp, D., Newell, R. G., & Jaffe, A. B. (2010). Energy, the environment, and technological change.

Handbook of the Economics of Innovation

,

2

, 873-937.**

Jaffe, A.B, R.G. Newell and R.N. Stavins (2005) A tale of two market failures: technology and

environmental policy.

Ecological Economics

, 54, 164-174.**

Jaffe, A.B. and Stavins, R.N (1995) Dynamic incentives of environmental regulation: the effects of

alternative policy instruments on technology diffusion,

Journal of Environmental Economics and

Management

, 29: 43-63.

Dechezleprêtre, A., Glachant, Ménière, Y. (2013). What Drives the International Transfer of Climate

Change Mitigation Technologies? Empirical Evidence from Patent Data.

Environmental and Resource

Economics

. 54(2), 161-178.

Popp, D. (2002) Induced innovation and energy prices,

American Economic Review

, 92, 160–180.**

Popp, D. (2006) International innovation and diffusion of air pollution control technologies: the effects

of NOx and SO2 regulation in the US, Japan and Germany

, Journal of Environmental Economics and

Management

, 51(1), 46-71.

Popp, D., Newell, R. G., (2012) Where does energy R&D come from? Examining crowding out from

environmentally-friendly R&D,

Energy Economics

, 34(4), 980-991.

Week 9: Seminar – Green Growth and Policy

Discussion Question: What are the optimal policies for driving innovation and growth down “green

development pathways”?

Acemoglu, D., P. Aghion, L. Bursztyn, and D. Hemous (2012) The Environment and Directed

Technical Change.

American Economic Review

, 102(1), 131-66.*

Aghion, P., Hemous, D. and Veugelers, R. (2009), ‘No green growth without Innovations’, Bruegel

Policy Brief.*

Student Presentations (weeks 10-12): (Prof. di Falco, Prof. Swanson)

Doctoral Seminar in Resource Economics

Salvatore di Falco and Tim Swanson

Term 1 – Theory  

Weeks 1‐3 

Weeks 4‐6 

Weeks 7‐9 

Weeks 10‐12 

Theory I

Jeremy Lucchetti

Theory II Bruno Lanz

Theory III

Tim Swanson Student Presentations Horizontal and Vertical

Relations: (Commons and Reg) Climate Change Modeling Natural Resource Economics : New Malthusians Selected Papers And Research Topics

Term 2 – Applied

Weeks 1‐3 

Applied I  

Salvatore di Falco

Weeks 4‐6

Weeks 7‐9

Weeks 10‐12

Change

Technology and Productivity in

Agriculture: Long run growth and inputs

Technology Innovation and IPR: Green

Economies

Selected Papers and Research Topics