Courses in Economics

This course studies issues of economic choice, economic efficiency and social welfare. The course presents theories of consumer and producer behavior and shows how these theories can be used to predict the consequences of individual, business and government actions. Topics covered include opportunity cost, the gains from trade, supply and demand analysis, taxes, externalities, price controls, consumer choice, production and cost, product pricing and market structure. This course is required for the major. No prerequisite. Offered every fall semester.

This course studies national economic performance. Building upon the microeconomic theories of consumer and producer behavior developed in ECON 101, the course introduces models that focus on the questions of unemployment, inflation and growth. Topics covered include measurement of national income and inflation, macroeconomic models, saving and investment, money and banking, fiscal and monetary policy, and international trade and finance. This course is required for the major. Prerequisite: ECON 101. Offered every spring semester.

This course is an intensive study of the fundamental logic of economic behavior, primarily within the context of a market economy. The course develops a systematic analysis of consumer and producer behavior, linked through the principles of exchange and market structure. The resulting explanation of product prices and factor rewards is used to evaluate and analyze economic efficiency and the distribution of welfare under alternative economic policies and conditions. This course cannot be taken as pass/D/fail. This course is required for the major. Prerequisite: ECON 101 and ECON 102, and a college-level calculus course or a score of 4 or 5 on the AP calculus exam. Offered every fall semester.

This course is a theoretical and applied study of the level of national income and employment. Prices, interest rates, unemployment rates, international trade relations, business cycles and the long-run growth of income significantly affect our standards of living. Diverse schools of macroeconomic thought are distinguished by theoretical concepts, priorities in performance goals, and empirical evidence. The course considers a variety of approaches and emphasizes the microeconomic foundations of macroeconomic theory. Government actively manages both domestic and international aspects of the macroeconomy, and the course considers current public policy issues. This course cannot be taken as pass/D/fail. This course is required for the major. Prerequisite: ECON 101 and ECON 102, and a college level calculus course or a score of 4 or 5 on the AP calculus exam. Offered every spring semester.

Econometrics is the application of statistical techniques to test economic models. This course offers an introduction to the theoretical and practical aspects of econometrics. Emphasis is given to linear regression techniques, special problems associated with linear regression, and the interpretation of results. In short, economic explanations of behavior are quantified and hypotheses are tested with data using statistical techniques. Students make extensive use of Stata, a statistical software package that is popular among economists, to create and modify data sets and obtain experience learning to apply appropriate econometric methods. This course cannot be taken as pass/D/fail. This course is required for the major. Prerequisite: ECON 101, 102 and a college course in statistics or a score of 4 or 5 on the AP statistics exam. Generally offered every semester.

The objective of this course is to introduce the modern economist’s scientific approach to addressing economic policy issues. Particular goals include learning how economists identify and frame the key questions associated with policy issues and learning how to credibly use empirical evidence to understand and evaluate policies. Ethical dimensions associated with these economic analyses also are discussed. This course works toward those goals while exploring a selection of contemporary economic policy issues. The course features a mixture of lectures, group discussions, student presentations and problem sets. A large portion of the grade comes from the score on a final, data-based, comprehensive proposal that is worked on throughout the semester in which the student is expected to demonstrate knowledge gained throughout all sections of the class. This counts toward an elective for the major. Prerequisite: ECON 101, 102 and STAT 106 or a score of 4 or 5 on the AP statistics exam.

Students examine the economic conditions and problems of developing economies, exploring alternative theories of economic development and strategies for achieving development goals. Specific topics include the meaning of development; historical and theoretical perspectives; income distribution; agriculture, population and human resources; industrialization; employment and technology; urbanization and migration; foreign trade, investment and aid; and government planning. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Junior standing. Generally offered every other year.

This course is focused on the economic determinants of metropolitan development and regional economic activity. We develop a theoretical basis for the analysis of economic problems in an urban and regional context. Within this framework, the course examines contemporary urban and regional economic problems such as poverty, discrimination, transportation, sprawl, and regional growth and decline. The course emphasizes empirical applications of the models studied. Overall, the course consists of lectures, assessments, class discussions and required readings. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every year.

This course examines the impact of immigration on the U.S. economy, focusing on why people choose to come here and what impact they have on labor markets, product markets, income inequality, the nature of cities and government budgets. The goals of the course are (1) to develop the analytical tools used by economists to understand the economic effects of immigration, (2) to examine the empirical evidence on these effects, and (3) to assess the political economy and potential economic and political consequences of U.S. immigration policy choices. The course also examines the impact of emigration on the countries that people leave. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. This course is rarely offered.

This course uses economic analysis to better understand the nature of environmental issues such as pollution and the allocation of natural resources. The course also examines the economic rationale behind policies aimed at improving the quality of the environment and altering our use of natural resources. The relative strengths of alternative policies are discussed using a series of case studies focusing on actual policies aimed at correcting environmental problems. This counts toward an elective for the major. Prerequisite: ECON 101. Sophomore standing. Generally offered every spring semester.

This course examines the optimal allocation of an individual's wealth among risky financial assets and the related question of the pricing of these risky assets. After a consideration of various measures of risk and return, modern portfolio theory is used to derive the capital asset pricing model. The empirical performance of the capital asset pricing model is analyzed, and alternative asset pricing models are discussed. Throughout the course, equity shares will be used as a particular application. The remainder of the course is spent on derivative assets, most important, futures and options. Time permitting, options are treated in some detail, concluding with a discussion of the Black-Scholes option-pricing model. While completing assignments, students make fairly heavy use of a spreadsheet program such as Excel. This counts toward an elective for the major. Prerequisite: ECON 101, 102 and a college course in statistics or a 4 or 5 on the AP statistics exam. Generally offered every year.

This course focuses on the basics of international trade — theories of international trade, the instruments of trade policies, their impact on welfare and employment, the movement of factories and economic integration. While emphasis is placed on developing and empirically testing theories, we also discuss major trade-related issues such as the economic effects of globalization, the role of the World Trade Organization, labor and immigration issues, foreign direct investment and outsourcing. This counts toward an elective for the major. Prerequisite: ECON 101, 102 and 201. Generally offered every other year.

This course examines the determination of national incomes, price levels, interest rates and exchange rates using open-economy macroeconomic models. The course begins with an intensive study of balance of payments accounting and the foreign exchange market, followed by a consideration of the law of one price, purchasing-power parity, and uncovered and covered interest parity. The second half of the course is spent deriving several open-economy macroeconomic models and using them to discuss important international financial policy issues. These discussions highlight the interaction of domestic policymakers with important international financial institutions such as the International Monetary Fund, the World Bank and the Bank for International Settlements. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This course examines government regulation of the behavior of individuals, firms, industries and markets. The first half of the course focuses on the economic regulation (and deregulation) of industries and occupations. Examples of government-imposed restrictions on prices, quantities and the freedom to enter and exit industries and occupations are drawn from medical services, funeral services and entertainment industries. The second half focuses on various types of social regulations, particularly health and safety regulations. Throughout the course, we explore the economic rationales for the regulations and evaluate their effects upon economic efficiency. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every fourth year.

This course examines U.S. money and financial markets and their interaction with and influence on prices, real output, employment and international trade. After an extensive discussion of fixed income pricing and the term structure, we consider the operations of financial institutions and the Federal Reserve System. The implementation of monetary policy and its effect on domestic and foreign financial markets, real output and foreign trade also are examined. In addition, alternative domestic and international monetary arrangements are considered. While completing assignments, students make fairly heavy use of a spreadsheet program such as Excel. This course counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every year.

This course provides an introduction to the economic analysis of labor markets. Topics include the determinants of labor demand and labor supply, the theory of compensating wage differentials, formation of human capital, discrimination in the workplace, public policy toward the workplace, and the determinants of earnings inequality. This course counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This course is an introduction to both the theoretical and practical aspects of the financial derivatives named futures and options. Markets for these instruments have grown rapidly over the past 40 years and are an important part of the global financial system. We begin with the study of market terminology and structure. We then turn to the pricing of forwards and futures. The majority of the course is spent on option pricing. We use the binomial model to motivate a careful derivation and discuss the Black-Scholes pricing equation. Throughout the course, we pay careful attention to the relationships among derivative prices, market participants, risk preferences and expectations for future realizations of the prices of underlying assets. Students likely make extensive use of a spreadsheet program such as Excel. This course counts toward an elective for the major. Prerequisite: ECON 101 and 102. Offered occasionally.

This course provides an introduction to industrial organization, a field that focuses on how firms, interacting through markets, attempt to exploit opportunities for profit. We examine the standard models of perfect and imperfect competition, emphasizing the strategic behavior of the interacting firms. Topics include pricing models, strategic aspects of business practice, vertical integration and technological change. This counts toward an elective for the major. Prerequisite: ECON 101, 102 and 201. Generally offered every other year.

This course is a study of the public sector in the U.S. economy, featuring government provision of public goods, redistribution of income, and taxation. Students consider the theory that justifies government intervention in a market economy as well as the reasons for government's tendency to create economic inefficiencies. We explore specific expenditure programs such as defense, health care, education, social insurance and welfare, as well as specific taxes. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This course examines health-related topics through the lens of economics. Traditional demand-and-supply analysis is applied to consider the basic questions society must answer in every market: what goods and services are produced, how they are produced and who receives them. This framework is extended to examine potential failures in health-related markets, including imperfect information (e.g., adverse selection and moral hazard in health insurance markets) and potential for excessive market power (e.g., pharmaceuticals without close substitutes). Government intervention in health markets is substantial. The rationale for it, whether on the grounds of efficiency, equity or both, is discussed, as is the degree to which it has ameliorated or exacerbated the issues it was intended to address. This counts toward an elective for the major. Prerequisites: ECON 101 and 102. Generally offered every year.

This course introduces students to the tools of derivative and integral calculus used in microeconomics and macroeconomics. These tools include Lagrange multiplier methods for unconstrained and constrained optimization, Kuhn-Tucker conditions for nonlinear programming, and Hamiltonian functions for problems of dynamic optimization. The course emphasizes the application of the tools of calculus rather than the underlying calculus theory. Therefore, students taking the course are expected to be familiar with derivative and integral calculus, as well as with the main principles of micro- and macroeconomics. This counts toward an elective for the major. Prerequisite: ECON 101, 102, 201 and MATH 111, 112, 213 or the appropriate AP calculus scores. Generally offered every other year.

The Federal Reserve System is arguably the most important economic institution in the world. This course traces its origins and development. Specifically, we explore the economic and institutional environment of the Fed's founding, rationales for its governance structure, how its mission has changed over time and the extent to which it has achieved its stated goals. In doing so, we also consider potential alternatives or improvements to the Fed and its current operating framework. This counts toward an elective for the major. Prerequisite: ECON 101 and 102.

Game theory is a framework for thinking more clearly and carefully about strategic interactions in business, politics, international relations and even biology. Though it began as a niche field of mathematics, game theory has become so important to economics that it’s now covered in every introductory textbook, and it’s a central part of every graduate student’s first-year coursework. That’s because a better understanding of game theory allows you to explain the otherwise inexplicable. Why, for example, do corporate executives risk prison time by conspiring to raise prices? Why is it hard to buy a good used car? Why is a college degree so important in the job market even when the degree isn’t related to the job? Game theory can also answer questions well beyond the traditional boundaries of economics. For example, why do people confess to crimes they didn’t commit? Why, during World War I, did peace break out spontaneously at points all along the Western Front? Why are male gorillas so much larger than females, while male and female chimps are the same size? In addition to answering these questions, we demonstrate many game theory concepts using in-class games with real cash incentives. This counts toward an elective for the major. Prerequisite: ECON 101 and 102. Generally offered every year.

This seminar examines the role of women in the labor market and how that role has changed over time. This examination involves a comparison of women and men with respect to labor supply (for both market and nonmarket work), wage rates, occupational choices and unemployment levels. The seminar evaluates economic models that attempt to explain differences among labor market outcomes for men and women. Finally, the seminar examines some public policy proposals that are aimed at remedying gender differences in work opportunities and pay. Each student writes and presents a seminar paper. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This seminar focuses on potential causes of persistent poverty in developing countries. We explore the issues of food deprivation, poor health, substandard education, high population growth and low savings rates. We also examine the recent empirical evidence on microfinance and local entrepreneurship, as well as the micro foundations of local institutions. This course utilizes analysis and principles of behavioral economics, conventional econometrics techniques and randomized controlled trials (RCT) that are used in the field of development economics. This counts toward the seminar requirement for the major. Prerequisite: ECON 101, 102 and 205. Junior standing. Offered every two or three years.

This seminar focuses on examining the economies of the Middle Eastern region. We explore the common development economic issues such as growth, poverty, inequality, labor markets, population growth, financial systems, education, institutional structures, etc., in the context of the Middle Eastern economies. This counts toward the seminar requirement for the major. ECON 205 is highly recommended. Prerequisite: ECON 101, ECON 102, STAT 106. Junior standing. Offered every two or three years.

Corporations are interesting institutions because they allow for the separation of ownership (shareholders) from control (managers and executives). This creates interesting incentives that are hard to reconcile with the usual simplifying assumption that firms simply exist to maximize profit. In this

course we use the analytical tools developed by economists to study a variety of questions about corporations. We read about 15 academic articles and a book that each address one or more of the following topics: the principle agent problem, corporate governance, executive compensation, financing decisions, mergers and takeovers, investor activism, and entrepreneurship. In this seminar we focus on understanding and critically evaluating the empirical methods used to test the validity of economic models of corporations. This counts toward the seminar requirement for the major. Prerequisite: ECON 101,102, and 201.

Economists outnumber other social scientists in Washington, and they receive more media attention than all other social scientists combined. What has this meant for public policy? Most economists believe competitive markets are efficient when made up of fully informed, rational actors. That’s led economists working in public policy to favor programs that make markets more competitive or improve access to information. But what if people aren’t rational? What if our behavior is consistently at odds with the predictions of economic theory? What if we consistently make choices that aren’t in our long-run self-interest? In this course, we draw on research from economics and psychology to construct models of human behavior that account for this kind of “irrationality.” We go on to study public policies that incorporate these behavioral economic insights. The ultimate objective is for students to use what they have learned about behavioral economics to develop their own alternative approach to a public policy challenge at the local, state, national or international level. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This seminar examines the use of laboratory and field experiments to study economic and social science behavior. We consider issues relating to the design of experiments, including the use of laboratory versus field methods, financial incentives, control conditions and statistical analysis. We study several types of economic experiments, including auctions, bargaining, dictator and ultimatum games, games in environmental economics, public goods allocation and voting games. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every year.

This seminar examines the sources, process and implications of sustained growth of incomes. Adam Smith's "Wealth of Nations" was an early analysis of how economies grew richer, and the field has developed to explain why there are differences in standards of living across countries. We consider several theories of the process of economic growth and balance that with empirical evidence on performance of current theory. We analyze how population growth, technological change, investment in physical and human capital, government policy and the quality of institutions affect growth. Discussion of the implications of economic growth for globalization, environmental conditions and income inequality figure into our evaluation of the effects of economic growth. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every year.

This seminar considers the markets for petroleum products from a variety of perspectives. Analyses of these markets have ranged from microeconomic investigations of the pricing of key products such as crude oil to macroeconomic considerations of the role of energy prices in generating economic booms and busts. The seminar uses models from microeconomics, macroeconomics and finance to study the pricing of energy products and the role played by these products in economic development. Throughout the seminar, attention also is paid to historical and political developments related to the economics of oil and gas. As part of the seminar, each student prepares and presents to the class an independent research paper. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every three years.

This seminar studies the empirical testing of economic models. The focus varies depending on the instructor. Possible topics include instrumental variable analysis, time series analysis, panel data analysis and limited dependent variables. Each student undertakes and reports on a research project. This counts toward the seminar requirement for the major. Prerequisite: ECON 101, 102 and 205. Generally offered every other year.

This is a seminar intended for juniors and seniors majoring in economics with an interest in political economy. There are three main goals for this course. First, to provide an introduction to a few of the major questions political scientists and economists study. Second, to use these questions to introduce a variety of empirical methods. And third, to engage in working with data and statistical computing to answer these questions. In total,

there are 28 meetings, and there will be three types of class meetings: Lectures (25%), paper discussions (50%), and in-class labs (25%). This counts toward the seminar requirement for the major. Prerequisites: ECON 101, ECON 102, and STAT 106.

This seminar introduces students to the field of spatial economics. Students become familiar with Geographical Information Systems (GIS), Stata and typesetting software. Additionally, students read and analyze empirical spatial economics papers in order to familiarize themselves with the literature and develop methodological skills. Last, students complete an original empirical paper on the topic of their choosing. The paper cycles through the process of data acquisition, literature review, econometric modeling and policy analysis. Students present their paper and guide a discussion of it in class as part of their final assessment. This counts toward the seminar requirement for the major. ECON 205 is strongly recommended. Prerequisite: ECON 201.

This seminar uses economic theory and empirical analysis to examine both the role of education in the economy and current educational policy debates. The seminar reviews the basic theory of investments in education (human capital theory) and investigates the empirical problem of disentangling the impact of education on earnings from the impact of innate ability as well as the association between education and individual earnings and why that relationship has changed over time. The seminar also examines the role of early childhood education, the main approaches to K-12 school reform and the issues of cost and access to higher education. Each student writes and presents a seminar paper. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Generally offered every other year.

This seminar examines the American past with special emphasis on issues such as the influence of the Constitution on economic growth; welfare and income distribution; the economics of slavery and the post-emancipation plight of Blacks in the economy; and 20th-century economic policy, with special emphasis on the Great Depression. Each student writes and presents a seminar paper. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Offered occasionally.

This seminar explores professional and amateur sports from an economic perspective. Aside from recreational and entertainment appeal, the sporting world provides a wealth of applications to several fields in economics such as industrial organization (antitrust and franchising), public finance (stadium financing) and labor economics (labor market discrimination), among others. This course gives students an opportunity to apply theory covered in the core courses of the economics major to explain developments in the world of sports. The course consists of lectures, readings, class discussions and assessments including individual research papers and class presentations. This counts toward the seminar requirement for the major. Prerequisite: ECON 201 and 205. Generally offered every year.

This seminar examines the economic aspects of the production, distribution and organization of health-care services. Topics include measuring output; structure of markets; demand for, supply of and pricing of services; and financing mechanisms and their impact on the relevant markets. Analysis also focuses on government policy toward health care and public health, its impact upon institutions and resource allocation, and major policy alternatives. Each student writes and presents a seminar paper. This counts toward the seminar requirement for the major. Prerequisite: ECON 101 and 102. Offered occasionally.

This course is for students who wish to do advanced work beyond regular courses or to study subjects not included in course offerings. Credit for this course will count toward the major. The credit to be awarded and the exact structure of the course is determined by the instructor and approved by the department chair. Typical activities include regularly assigned readings of scholarly material, weekly meetings to discuss the readings, and a research paper project. Prerequisite: ECON 101, 102 and permission of instructor and department chair. Because students must enroll for individual studies by the end of the seventh class day of each semester, they should begin discussion of the proposed individual study by the semester before, so that there is time to devise the proposal and seek departmental approval.