ECO362H1 Lecture Notes - Lecture 1: Percentile, Thirunamam, Human Capital
Introduction and Growth Facts
Stephen Ayerst
University of Toronto
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Two Questions
The main objective of this course is to address the following two
questions:
1. Why are some countries richer than others?
•This is a question on levels
2. Why do some countries grow faster than others?
•This is a question on the speed
•How do we approach these questions?
•Combine theory with data to analyze cross-country differences
•Focus on quantifying the relative importance of channels
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Income Differences Across Countries
How should we measure development?
•We will use output (GDP) per capita as our measure of
income / development
How large are income differences across countries?
•90th Percentile vs 10th Percentile = 25.6 times
•75th Percentile vs 25th Percentile = 8.8 times
•Standard Deviation of Logs = 1.16
What drives these differences?
•Observable versus unobservable factors
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