Teaching Economic Growth Theory with Data
corruption; instruction; Solow growth model
Taylor & Francis Ltd.
Journal of Economic Education
Many instructors in subjects such as economics are frequently concerned with how to teach technical material to undergraduate students with limited mathematical backgrounds. One method that has proven successful for the authors is to connect theoretically sophisticated material with actual data. This enables students to see how the theory relates to the real world, allowing for a deeper understanding of both. The authors developed a simple and insightful empirical application of the Solow growth model that can be used in an undergraduate macroeconomics or economic growth course. The exercise uses a data set on perception of corruption levels by country to look at the relationship between corruption and the level and rate of growth of output per worker across 70 countries. The results not only allow students to see for themselves the impact that corruption has on gross domestic product per worker but also improve their understanding of the distinction between level effects and long-run growth effects.