This course is available on the MSc in Economics (2 Year Programme). This course is available with permission as an outside option to students on other programmes where regulations permit. This course uses controlled access as part of the course selection process. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

New course for the 2027/28 academic session.

How to apply:  Any external student must have successfully completed EC400 or EC451 in September and/or have approval of the Department of Economics.

Deadline for application: Please apply as soon as possible after the opening of course selection for all courses.

For queries contact: Econ.msc@lse.ac.uk

Pre-requisites:

Students must have completed EC451 or EC400 before taking this course.

Assumed prior knowledge:

Students should also have completed courses in intermediate level microeconomics, macroeconomics and econometrics.

Additional requisites:

In exceptional circumstances, students may take this course without EC400/EC451 provided they meet the necessary requirements and have received approval from the course conveners, the MSc Economics Programme Director and their own Programme Director. Contact the Department of Economics for more information (econ.msc@lse.ac.uk) regarding entry to this course.

This course will expose students to frontier insights on the drivers of productivity growth, innovation, and misallocation. It will cover topics such as what incentivises firms to innovate, what drives the supply of inventors and researchers, and what determines aggregate productivity when firms and sectors are subject to different levels and growth rates of total factor productivity. The course will also explore the rise of overall R&D expenditure and the simultaneous decline in economic growth, and the divergence of income and the United States, Europe and the United Kingdom.

Illustrative topics: 

• Cross-country facts on output, hours worked, productivity growth, and (human) capital accumulation
• Facts on the drivers of firm-level productivity, innovation
• Spillovers in innovation and optimal (industrial) policy
• Misallocation and productivity
• Structural transformation (supply and demand factors)
• Task-based models of the labour market and technological change
• Models of endogenous growth
• Models of technology adoption and diffusion
• Models of climate change and directed technological change in response

20 hours of lectures and 9 hours of seminars in the Winter Term.
1 hour of seminars in the Spring Term.

This course has a reading week in Week 6 of Winter Term.

• Acemoglu, Daron, and Pascual Restrepo. "The race between man and machine: Implications of technology for growth, factor shares, and employment." American economic review108.6 (2018): 1488-1542.
• Acemoglu, Daron, Ufuk Akcigit, Douglas Hanley, and William Kerr. "Transition to clean technology." Journal of political economy 124, no. 1 (2016): 52-104.
• Ufuk Akcigit and John Van Reenen (2023). The Economics of Creative Destruction: New Research Themes from Aghion and Howitt, Uneven Growth: Automation’s Impact on Income and Wealth Inequality
• De Ridder, Maarten. "Market power and innovation in the intangible economy." American Economic Review 114, no. 1 (2024): 199-251.
• De Loecker, Jan, Jan Eeckhout, and Gabriel Unger. "The rise of market power and the macroeconomic implications." The Quarterly journal of economics 135, no. 2 (2020): 561-644.
• Jones, Charles (2016). Chapter 1 - The facts of economic growth. Handbook of Macroeconomics.
• Bloom, Nicholas, Charles I. Jones, John Van Reenen, and Michael Webb. "Are ideas getting harder to find?." American Economic Review 110, no. 4 (2020): 1104-1144.
• Moll, Benjamin, Lukasz Rachel, and Pascual Restrepo. "Uneven growth: automation's impact on income and wealth inequality." Econometrica 90, no. 6 (2022): 2645-2683. 

Exam (100%), duration: 120 minutes, reading time: 15 minutes in the Spring exam period.