Macroeconomics for Developing Economies
Macroeconomía para Economías en Desarrollo
Fall 2026 · CIDE Master’s Program (ME) · Tuesdays and Wednesdays, 13:00–14:30
Course Overview
This course focuses on the theoretical foundations of development macroeconomics, with an emphasis on growth models and the main drivers of development. We begin by quantifying why income levels differ dramatically across the world (development accounting) and then study the canonical growth frameworks that help frame the discussion of development. Next, we focus on the why — we try to explain why these differences in income have arisen. We start by looking at the role of technology, focusing on the role of human capital, innovation, and on a nation’s distance to the technological frontier. Next, we look at how an economy’s “openness” relates to its development. Here, we study trade and its role in the diffusion of technology, and open-economy macroeconomics of emerging markets, where exchange-rate regimes, capital flows, and sudden stops play an important part in how a developing economy evolves. Finally, we examine the mechanisms that are particularly relevant to developing economies: coordination failures and poverty traps, the misallocation of resources across heterogeneous firms, informality, and the role of institutions, industrial policy, and structural transformation.
Throughout, we consider both theory and the empirical evidence from around the world, with particular attention to Mexico and Latin America. Students will work directly with cross-country data to help connect class discussions to the world of development, and to evaluate the models that they study.