This course examines perhaps the most fundamental question in economics and economic history: why are some places rich while others remain poor? It is a big, complex and controversial question that escapes easy answers. The aim of these lectures is not to push you to adopt any particular view. Rather, I hope to walk you through the most influential theories and to discuss some innovative empirical work that has tested and quantified these models and hypothesis. In order to do this, I will draw from narrative history, formal economic models and various strands of empirical economics. I will also discuss some work that has applied the lessons from history to contemporary contexts.
We will start with a review of the stylized facts and a discussion about growth in the pre-industrial era. The rest of the course is divided into three interrelated parts. First, we will discuss the main candidates for the fundamental causes of growth—luck, geography, culture and institutions—and recent work that has evaluated their empirical relevance. Second, we examine the interplay between these factors and innovation (both technological and institutional). In this part, we will also document how innovation invariably leads to creative destruction and sometimes to plain crises. We end by discussing how increased migration, social mobility and participation of women in the formal labor market reduced the waste of talent and thus gave rise to a more efficient allocation of labor.