Economics

Economics analyzes the ways in which resources can be most effectively organized to meet the changing goals of a society. Courses in the department combine theoretical and applied economics as a basis for developing and evaluating alternative public policies for entire economies and for the institutions and organizations within an economy. Department courses give a broad and practical perspective for those considering careers in law, government, business, education, journalism or social service; they also meet the needs of students seeking graduate work in economics, business administration, and public affairs. The basic introductory courses, 110 and 111 or their equivalent, are prerequisites to most advanced courses; they offer a good foundation for further work in economics, but they have also been designed for students who have not yet selected majors and for those in other majors seeking an introduction to the analysis of economic theory and policies. Note: Either course in the principles sequence, Economics 110 or 111, can be taken first. Independent study (291 or 391) for those with special research interests can be taken with any faculty member.

Requirements for a Major

All economics majors are required to successfully complete the two introductory courses (110 and 111), the three core courses (329, 330, and 331), the integrative exercise (400), and 30 additional credits in economics at the 200 level or above.

Unless specifically noted otherwise, all economics courses at the 200-level and above have both Economics 110 and 111 as prerequisites. Economics majors planning to take a senior seminar in the fall of their senior year with the intention of writing a paper as their integrative exercise in a subsequent term must complete Economics 330 and Economics 331 by the end of their junior year. We encourage students to take Economics 329 in their sophomore or junior year; students who take the senior seminar must take Economics 329 no later than the same term as the seminar.

Mathematics 111 or its equivalent and Mathematics 215 (or 275) are prerequisites for Economics 329 and 331, and Mathematics 111 or its equivalent is a prerequisite for Economics 330. Any student intending graduate work in economics should also take Mathematics 121, 211, 232, 236, 265 and 275. Courses teaching additional skills such as computer science, advanced rhetoric, and analysis of political and social policies are highly recommended.

Requirements for a Major for the Class of 2018 and Beyond

All economics majors are required to complete successfully the two introductory courses (110 and 111), the three core courses (329, 330, 331) and Advanced Seminar (395), the integrative exercise (400), and 24 additional credits in economics courses numbered 215 or above.

Unless specifically noted otherwise, all economics courses at the 200-level and above have both Economics 110 and 111 as prerequisites. Mathematics 111 or its equivalent and Mathematics 215 (or 275) are prerequisites for Economics 329 and 331, and Mathematics 111 or its equivalent is a prerequisite for Economics 330. We strongly encourage prospective majors to complete all mathematics prerequisites no later than the sophomore year. Completion of the core sequence is a prerequisite for Advanced Seminars and the integrative exercise. We encourage students to take Economics 329 in their sophomore spring or junior fall terms.

Any student intending graduate work in economics should also take Mathematics 121, 211, 232, 236 241 and 275. Courses teaching additional skills such as computer science, advanced rhetoric and analysis of political and social policies are highly recommended.

Economics Courses

ECON 110 Principles of Macroeconomics This course gives students a foundation in the general principles of economics as a basis for effective citizenship and, when combined with 111, as a preparation for all advanced study in economics. Topics include analysis of the measurement, level, and distribution of national income; the concepts of inflation and depression; the role and structure of the banking system; fiscal and monetary stabilization techniques; implications of and limits to economic growth; and international economic relations. 6 credits; SI, QRE; Fall, Winter, Spring; Ben Keefer, Theresa A Bauer, Bruce R Dalgaard, Stephie Fried

ECON 111 Principles of Microeconomics This course gives the students a foundation in the general principles of economics as a basis for effective citizenship and, when combined with 110, as a preparation for all advanced study in economics. Topics include consumer choice theory; the formation of prices under competition, monopoly, and other market structures; the determination of wages, profits, and income from capital; the distribution of income; and an analysis of policy directed towards problems of public finance, pollution, natural resources, and public goods. 6 credits; SI, QRE; Fall, Winter, Spring; Jonathan M Lafky, Shane Auerbach, Faress Bhuiyan, Aaron M Swoboda

ECON 221 Cambridge Program: Contemporary British Economy This course focuses on the development of the British economy since the inter-war period. The approach integrates economic and historical analysis to discuss the development of the structure of the British economy, economic policy and the institutions affecting economic performance. Prerequisite: Students who have completed Economics 110 and 111 by the end of spring term 2023 are eligible to participate in the seminar. 6 credits; SI, QRE, IS; Summer; Martha W Paas

ECON 222 Cambridge Program: The Origins of the Modern Economy This course begins in Nuremberg and Rothenburg Germany, where we will investigate the origins of modern economic growth in these cities which flourished in the middle ages and early modern period. We will travel down the Rhine to see one of the great arteries of trade and on to Belgium to visit the flax museum. In England we will visit the sites of the wool trade and the early Industrial revolution to discuss the economic and noneconomic origins of modern growth. Prerequisite: Economics 110 and 111. 6 credits; NE; Summer; Martha W Paas

ECON 223 English Culture Between the Wars In this course we will discuss the intellectual and social milieu in which Keynes worked between his service at the Versailles Conference and the writing of the General Theory. We will read works of the Bloomsbury Group, visit Charleston Farmhouse (which was the center of the group), read Singled Out (about the two million women who could not find husbands after WWI and the effect on the position of women in British society), and read Love on the Dole (a classic novel set against the backdrop of unemployment in the 30s). The goal of the course is to investigate the social backdrop of the economic revolution of Keynesian economics. Prerequisite: Economics 110 and 111. 6 credits; S/CR/NC; NE; Summer; Martha W Paas

ECON 232 American Economic History: A Cliometric Approach An introduction to the growth of the American economy from colonial times to the present with emphasis on the nineteenth century. Topics include technical change, the choice of production technology, income distribution, demographic transition, factor markets, and the role of institutions. Debates in economic history such as the economic viability of antebellum slavery, the integration of capital markets, the role of railroads in the growth process, and the economic impact of the New Deal are evaluated with an emphasis on empirical evidence. May be counted toward the History major. Prerequisite: Economics 110 and 111. 6 credits; SI, WR2, QRE, IDS; Fall; Jenny Bourne

ECON 233 European Economic History A comparative study of dynamic economic components in the growth of western European countries, with particular attention to Great Britain, from the sixteenth to the twentieth century. Topics include the methodology of economic history, agriculture, technology, population, foreign trade, the role of the state, and monetary systems. Prerequisite: Economics 110 and 111. 6 credits; SI, WR2, QRE, IS; Not offered 2016-17

ECON 240 Microeconomics of Development This course explores household behavior in developing countries. We will cover areas including fertility decisions, health and mortality, investment in education, the intra-household allocation of resources, household structure, and the marriage market. We will also look at the characteristics of land, labor, and credit markets, particularly technology adoption; land tenure and tenancy arrangements; the role of agrarian institutions in the development process; and the impacts of alternative politics and strategies in developing countries. The course complements Economics 241. Prerequisite: Economics 111. 6 credits; SI, QRE, IS; Fall; Faress Bhuiyan

ECON 241 Growth and Development Why are some countries rich and others poor? What causes countries to grow? This course develops a general framework of economic growth and development to analyze these questions. We will document the empirical differences in growth and development across countries and study some of the theories developed to explain these differences. This course complements Economics 240. Prerequisite: Economics 110. 6 credits; SI, QRE; Fall; Stephie Fried

ECON 244 Gender, Race and Ethnicity in Latin American Economic Development Latin America has the highest level of inequality in the world, undergirded by significant racial, ethnic, and gender inequalities. This course will analyze key gender issues such as violence against women and women’s labor force participation. We will also examine issues affecting indigenous peoples from both a human capital and indigenous rights/development with identity framework. The focus will be on rigorous analysis to understand the problems and design better public policy. Prerequisite: Economics 110 and 111 and 240. 6 credits; SI, WR2, QRE, IS; Not offered 2016-17

ECON 246 Economics of Welfare This course presents economic theory on how society as a whole ranks and chooses between different alternatives. It delves into the realm of normative economics analyzing objectives society may want to pursue, mechanisms designed to reach those objectives, and the resulting welfare of individuals affected by the choices made. The theoretical tools discussed will be used to study different mechanisms of voting, redistributing income, government intervention, auctions, and trade. Among other things, students will be exposed to the Pareto criterion, Arrow's impossibility theorem, the Vickery-Clarke-Grove mechanism, the Coase theorem, utilitarianism, Rawlsian ethics, and welfare theorems. Prerequisite: Economics 111. 6 credits; SI, QRE, IS; Spring; Faress Bhuiyan

ECON 250 History of Economic Ideas A survey of the evolution of economic thought from the seventeenth century to the present, with emphasis on the intellectual and historical background which influenced economists. Prerequisite: Economics 110 and 111. 6 credits; SI; Not offered 2016-17

ECON 259 Economics of Higher Education This course examines current issues in higher education through the lens of both theoretical and empirical economics. Students will be exposed to both signaling models of higher education and empirical analyses of its returns. We will also discuss admissions as a matching process, rising tuition as a form of price discrimination, and the globalization of higher education, among other topics. Prerequisite: Economics 111. 6 credits; SI, WR2; Spring; Shane Auerbach

ECON 262 The Economics of Sports In recent years, the sports business in the United States has grown into a multibillion-dollar industry. Understanding the sports business from an economic viewpoint is the subject of this course. Topics will include player compensation, revenue-sharing, salary caps, free agency, tournaments, salary discrimination, professional franchise valuation, league competitiveness, college athletics, and the economics of sports stadiums and arenas. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Spring; Mark T Kanazawa

ECON 263 Entrepreneurship, Innovation, and Economic Performance Joseph Schumpeter, in lamenting the absence of an accepted theory of entrepreneurship, observed that this gap in economics is much like having Hamlet performed with the Prince of Denmark absent. Much has changed since Schumpeter leveled this criticism. Economics has embraced the contributions of entrepreneurs and provided theoretical models explaining their actions. This course explores the foundations of a microeconomic theory of entrepreneurship, investigating the role of entrepreneurs (and intrapreneurs within large organizations) as agents for change. Case studies of business development provide practical illustrations of ways in which entrepreneurs operate and how their efforts contribute to economic progress. Prerequisite: Economics 110 or 111. 6 credits; SI; Spring; Bruce R Dalgaard

ECON 264 Health Care Economics This course will focus on the economics of medical care and how health care markets and systems work. We will consider both private health insurance markets and publicly provided social health insurance. The changes which demography, technology and the Affordable Health Care Act are bringing to health care delivery will be examined. Some time will be devoted to understanding the health care systems in other countries. This is a discussion course. Prerequisite: Economics 111. 6 credits; SI, QRE; Not offered 2016-17

ECON 265 Game Theory and Economic Applications Game theory is the study of purposeful behavior in strategic situations. It serves as a framework for analysis that can be applied to everyday decisions, such as working with a study group and cleaning your room, as well as to a variety of economic issues, including contract negotiations and firms' output decisions. In this class, modern game theoretic tools will be primarily applied to economic situations, but we will also draw on examples from other realms. Prerequisite: Economics 111. 6 credits; SI, QRE; Spring; Jonathan M Lafky

ECON 266 Experimental Economics Controlled experiments are a useful tool for testing and improving upon economic theory. This course will provide an introduction to experimental methodology, with an emphasis on design and hypothesis testing. We will examine experimental results across a wide range of economic topics, including individual decision making, auctions, public goods, and asset markets. Students will participate in experiments, as well as design and conduct their own studies. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Not offered 2016-17

ECON 267 Behavioral Economics This course introduces experimental economics and behavioral economics as two complementary approaches to understanding economic decision making. We will study the use of controlled experiments to test and critique economic theories, as well as how these theories can be improved by introducing psychologically plausible assumptions to our models. We will read a broad survey of experimental and behavioral results, including risk and time preferences, prospect theory, other-regarding preferences, the design of laboratory and field experiments, and biases in decision making. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Winter; Jonathan M Lafky

ECON 268 Economics of Cost Benefit Analysis Cost-benefit analysis is a tool commonly used by economists and policy makers to compare and choose among competing policy options. This course will cover the basic theory and empirical techniques necessary to quantify and aggregate the impacts of government policy, especially as related to the environment. Topics covered include the time value of money; uncertainty; sensitivity analysis; option value; contingent valuation; hedonic estimation; basic research design. Throughout the course case studies will be used to elucidate and bring life to the theoretical concepts. Prerequisite: Economics 111. Some statistics background will be useful. 6 credits; SI, QRE; Not offered 2016-17

ECON 269 Economics of Climate Change This course studies economic models of climate change and their implications for policy design. Covered topics include: the relationship between climate change and the macroeconomy, the performance of different climate policy instruments such as carbon taxes and cap and trade systems, the potential effects of innovation, and the economics surrounding the use of different types of energy. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Winter; Stephie Fried

ECON 270 Economics of the Public Sector This course provides a theoretical and empirical examination of the government's role in the U.S. economy. Emphasis is placed on policy analysis using the criteria of efficiency and equity. Topics include rationales for government intervention; analysis of alternative public expenditure programs from a partial and/or general equilibrium framework; the incidence of various types of taxes; models of collective choice; cost-benefit analysis; intergovernmental fiscal relations. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Fall, Spring; Jenny Bourne, Theresa A Bauer

ECON 271 Economics of Natural Resources and the Environment This course focuses on environmental economics, energy economics, and the relationship between them. Economic incentives for pollution abatement, the industrial organization of energy production, optimal depletion rates of energy sources, and the environmental and economic consequences of alternate energy sources are analyzed. Prerequisite: Economics 111. 6 credits; SI, QRE; Winter; Aaron M Swoboda

ECON 272 Economics, Property and Institutions in Natural Resources This course examines the economic, historical, legal and institutional roots of the present-day environmental crisis, with the main, but not exclusive, focus on the United States. Topics covered include land and timber policy, minerals extraction, grazing rights, fisheries management, energy use and production, agriculture, wildlife management, endangered species protection, and rain forest preservation. Prerequisite: Economics 110 and 111. 6 credits; SI, WR2, QRE; Not offered 2016-17

ECON 273 Water and Western Economic Development This course examines scarce water resources as a legal/political/economic factor in the economic development of the western United States, using and combining insights from environmental economics, law and economics, institutional economics, and economic history. Topics include the economic growth of the western economy, surface- and groundwater management, water markets, western water law, Indian water rights, surface- and groundwater pollution, and instream flow protection. Prerequisite: Economics 111. 6 credits; SI, QRE; Not offered 2016-17

ECON 274 Labor Economics Why do some people choose to work and others do not? Why are some people paid higher wages than others? What are the economic benefits of education for the individual and for society? How do government policies, such as subsidized child care, the Earned Income Tax Credit and the income tax influence whether people work and the number of hours they choose to work? These are some of the questions examined in labor economics. This course will focus on the labor supply and human capital decisions of individuals and households. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Winter; Faress Bhuiyan

ECON 275 Law and Economics Legal rules and institutions influence people's behavior. By setting acceptable levels of pollution, structuring guidelines for contract negotiations, deciding who should pay for the costs of an accident, and determining punishment for crimes, courts and legislatures create incentives. How do economic considerations factor into legal rules, and how do laws affect economic output and distribution? In this class, we use court cases, experiments, and current legal controversies to explore such issues. Prerequisite: Economics 111. 6 credits; SI, QRE, WR2; Not offered 2016-17

ECON 276 Money and Banking This course examines the role of money and monetary institutions in determination of income, employment, and prices in the domestic and world economies. It also examines the role of commercial banking and financial markets in a market-based economy. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Winter; Bruce R Dalgaard

ECON 277 History and Theory of Financial Crises This course provides a historical perspective on financial crises and highlights their main empirical patterns. This course also introduces economic theories of financial crises, in which leverage, moral hazard, mistaken beliefs, and coordination problems play a central role. We will also discuss some policy instruments used to balance risk exposure, such as deposit insurance, collective action clauses, exchange controls, and foreign reserves. Prerequisite: Economics 110 and 111. 6 credits; SI, IS; Not offered 2016-17

ECON 278 Industrial Organization and Firm Behavior This course analyzes the firm's marketing and pricing problems, its conduct, and the resulting economic performance, given the nature of the demand for its products, its buying markets, the nature of its unit costs, and the structure of its selling markets. Prerequisite: Economics 111. 6 credits; SI, QRE; Fall, Spring; Shane Auerbach

ECON 280 International Trade A study of international trade theories and their policy implications. Classical and neo-classical trade models, the gains from trade, the terms of trade and the distribution of income, world trade patterns, international factor movements, tariffs, and the impact of commercial policy on developing and developed countries are analyzed. Prerequisite: Economics 111. 6 credits; SI, QRE; Winter; Theresa A Bauer

ECON 281 International Finance This course studies theories of the multi-faceted interaction between the balance of international payments and foreign exchange market and the general levels of domestic prices, employment and economic activity. Topics include the balance of payments, foreign exchange markets, adjustment mechanisms in international payments, macroeconomic policies for internal and external balance, and international monetary systems. Prerequisite: Economics 110. 6 credits; SI, QRE; Not offered 2016-17

ECON 282 The Theory of Investment Finance The main objective of this course is to investigate various aspects of modern portfolio theory and develop basic techniques for applying this theoretical framework to real-world data. Topics covered include portfolio and asset pricing theories, and derivatives with the primary focus on option pricing. The class will develop and actively use univariate calculus for theory-building and statistical techniques for data analysis. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Winter; Ben Keefer

ECON 283 Corporate Organization and Finance This course investigates decision-making by firms and their managers. Specific topics include tradeoffs in corporate organization, executive compensation, project valuation, the cost of capital under debt and equity financing, and the firm’s optimal capital structure. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE; Fall; Ben Keefer

ECON 284 Inequality in an Interconnected World The rise in inequality and economic insecurity worldwide starting in the latter part of the previous century has taken center stage in public discourse and academic work. This course applies economic analysis to investigate the causes and implications of inequality and economic insecurity in an increasingly interconnected world. Topics include income inequality, gender inequality, access to healthcare and health outcomes, and the role of technical change. Prerequisite: Economics 110 and 111. 6 credits; SI, QRE, IS; Not offered 2016-17

ECON 329 Econometrics This course is an introduction to the statistical methods used by economists to test hypotheses and to study and quantify economic relationships. The course emphasizes both statistical theory and practical application through analysis of economic data sets using statistical software. Topics include two-variable and multiple regression, interval estimation and hypothesis testing, discrete and continuous structural change, parameter restrictions, model construction, heteroscedasticity, autocorrelation, and multicollinearity. Prerequisite: Economics 110 and 111, Mathematics 111 and either Statistics 120 or Statistics 250 or instructor consent. 6 credits; SI, QRE; Fall, Spring; Mark T Kanazawa

ECON 330 Intermediate Price Theory An analysis of the forces determining relative prices within the framework of production and distribution. This class is normally taken by juniors. Sophomores considering enrolling should speak to the instructor. Prerequisite: Economics 110 and 111 and Mathematics 111. 6 credits; SI, QRE; Fall, Winter; Nathan D Grawe

ECON 331 Intermediate Macro Theory Analysis of the forces determining the general level of output, employment, and prices with special emphasis on the role of money and on interest rate determination. This class is normally taken by juniors. Sophomores considering enrolling should speak to the instructor. Prerequisite: Economics 110 and 111, Mathematics 111 and Statistics 120 or Statistics 250 or instructor consent. 6 credits; SI, QRE; Winter, Spring; Ben Keefer

ECON 395 Advanced Topics in Economics of Sports In this topics-based seminar, we explore the economics and business of professional sports, mostly (but by no means necessarily entirely) in the United States. We will examine a variety of topics, including the institutions that govern pro sports and its main interested parties, especially owners, professional athletes, fans, media, and local municipalities. To better understand these institutions, we apply models from various traditional fields in economics including industrial organization, labor economics, public finance, and behavioral economics. The ultimate objective is to achieve an advanced understanding of the sports industry, and to understand how economists use economic models to develop hypotheses testable with sports data.

Prerequisite: Economics 330, 331; Concurrent or previous enrollment in Economics 329. 6 credits; FSR, WR2, QRE; Fall; Mark T Kanazawa

ECON 395 Advanced Topics in the Economics of Housing This seminar-style course focuses on the empirical analysis of topics in housing economics. Specific areas of study depend on student interest, but may include: determinants of housing supply and demand, hedonic analysis, land use regulation, rent control, spatial segregation, housing policy, housing as an investment, and the recent subprime mortgage crisis. Class time is primarily devoted to student-led presentation and discussion of peer-reviewed journal articles. Prerequisite: Economics 329, 330, and 331, or instructor permission. 6 credits; SI, WR2, QRE; Fall; Aaron M Swoboda

ECON 395 Advanced Topics in Macro Time Series This course will introduce students to vector autoregression (VAR) techniques to analyze macroeconomic time-series data. Possible applications of VAR analysis include (but are not limited to): the time series dynamics of GDP, interest rates, carbon emissions, and energy prices. Prerequisite: Economics 330, 331; Concurrent or previous enrollment in Economics 329. 6 credits; SI, WR2, QRE; Fall; Stephie Fried

ECON 400 Integrative Exercise 3 credits; S/NC; Fall, Winter, Spring; Nathan D Grawe, Aaron M Swoboda, Stephie Fried, Mark T Kanazawa