Courses in ECONOMICS (DIVISION 358)


A. Introductory Courses

201. Principles of Economics I. No credit granted to those who have completed or are enrolled in 400. (4). (SS).

Economics 201 concentrates on the microeconomics of the modern economy: how prices and quantities of goods and services are determined under competitive conditions as well as in other types of markets; the determination of wage rates and the distribution of income; the public sector; and related topics of current interest. The course format consists of three one-hour lectures per week (either Section 100 or 200) taught by the professor and one and a half hours of discussion per week (Section 101-116, 201-216) taught by a teaching assistant. Grades are based largely on course-wide hour tests and the final exam, but there will be homework and quizzes in the sections. Economics 201 is the first part of the two-term introduction to economics. Both 201 and 202 are required as prerequisites to the concentration and to upper level courses in economics. Cost:3 WL:None. For information about overrides, call the Undergraduate Office at 763-9242. (Section 100: Gerson; Section 200: Porter WL:none.

202. Principles of Economics II. Econ. 201. No credit granted to those who have completed or are enrolled in Econ. 400. (4). (SS).

Economics 201 and 202 are required as prerequisites to the concentration and to upper-level courses in Economics. In Economics 202, the fundamental concepts and theories of macroeconomics are developed and used to analyze problems of current interest. The major concerns of this course are the determinants of GDP, unemployment, inflation, international trade, and economic growth. The course format consists of three hours of lecture per week (either 100 or 200) by the professor and one and a half hours of section meetings (101-109 or 201-212) each week by a teaching assistant. The section meetings are limited to 35 students. Cost:2 WL:Contact Undergraduate Office, Dept. of Economics, 158 Lorch Hall (Section 100: Courant; Section 200:Stafford)

B. Economic Theory and Statistics

401. Intermediate Microeconomic Theory. Econ. 201 and 202, and Math. 115. (4). (SS).

This course deals with the theoretical analysis of consumers, firms, markets, and price determination. The analysis is rigorous, using the tools of algebra, geometry, and elementary calculus in constructing models. Prerequisites include Math 115 or equivalent, and Economics 201 (or permission of the instructor). Economics concentrators are required to elect this course and are encouraged to complete it early in their concentration program. It is not recommended that 401 and 402 be taken in the same term. Main lecture will meet twice a week. Sections will meet once a week. Cost:3 (Bergstrom)

402. Intermediate Macroeconomic Theory. Econ. 201 and 202, and Math. 115. (3). (SS).

This course in macroeconomics deals with the determination of broad economic aggregates such as national income, employment, the price level, and the balance of payments in both the short run and the long run. Rigorous analysis is used to understand the forces that determine these economic variables, and how they are affected by public policies. It is predominantly a lecture course, with grades based on hour test(s) and final exam. Prerequisites include one term of calculus. Economics 402 is a prerequisite for many other courses offered in Economics. Concentrators are required to elect this course and are encouraged to complete it early in their concentration program. It is strongly recommended that students take Economics 401 before 402. Cost:3 WL:3 (Johnson/Shapiro)

404. Statistics for Economists. Econ. 201 and 202 and Math. 115. No credit granted to those who have completed or are enrolled in 405 or Stat. 311, 402, or 412. (4). (Excl).

SECTION 001. This course provides an introduction to the background in descriptive statistics, probability theory, statistical inference and regression theory needed to enable the large body of empirical work that is now undertaken in economics to be understood and appreciated. There are two lectures and one problem session per week. Grades are based on problem sets and exams. The course, which is self-contained, does not serve as a prerequisite to Economics 406. Cost 2-3

405/Statistics 405. Introduction to Statistics. Math. 116 or 118, or permission of instructor. Juniors and seniors may elect this course concurrently with Econ. 201 or 202. No credit granted to those who have completed or are enrolled in Stat. 311 or 412. Students with credit for Econ. 404 can only elect Econ. 405 for 2 credits and must have permission of instructor. (4). (Excl).

This course is designed for economics concentrators but the discussion is sufficiently general to serve noneconomics concentrators as well. The emphasis is on understanding rather than on "cookbook" applications. Students are expected to know basic algebra and basic calculus. Since the content of the course does not extend much beyond establishing the foundations of statistical inference, it is recommended that after finishing the course students elect Economics 406 or a similar course in the Statistics Department to learn some applications and to get some experience with computer work. This course is designed for quantitatively oriented students who are comfortable with abstract concepts. Students who prefer a broader, less rigorous approach to statistics should elect Econ. 404. Evaluation of students in the course is based on two midterm tests and one final examination, and on homework assignments. There are 3 hours of lectures and 1 hour of discussion per week. Cost:3 WL:3 (Howrey)

C. Monetary and Financial Economics

411. Monetary and Financial Theory. Econ. 402, and 404 or 405. No credit granted to those who have completed or are enrolled in 310. (3). (Excl).

Economics 411 focuses on modern financial markets and the role of monetary and fiscal policy in influencing asset prices and the economy. Monetary and financial economics are developed at a formal level. Topics covered can include financial institutions and markets, interest rate determination, portfolio theory, capital markets, the regulation of of financial institutions, the money supply process, money demand, monetary policy, national saving and the national debt. Evaluation will be based on homework assignments, two midterms, and the final exam. Method of instruction is lecture and discussion. The required prerequisite is Econ 402, Intermediate Macroeconomics. Additional recommended prerequisite is Econ 401, Intermediate Microeconomics. WL:1 (Kimball)

412. Topics in Macroeconomics. Econ. 402. No credit granted to those who have completed or are enrolled in 310. (3). (Excl).

Economics 412 is an advanced undergraduate course in applied monetary theory and macroeconomics. Our focus will be on developing and using macroeconomic models for policy analysis and forecasting. We will first review and extend models introduced in intermediate macroeconomics (Econ 402) and then apply these models to issues such as inflation, economic growth, business cycles, and real wage growth. The second part of the course will focus on econometric modeling of the macro economy, including model specification, data issues, model estimation and evaluation, policy simulation experiments, and preparing, generating, and adjusting forecasts. Students will participate in small group projects where they will have computer experience with modeling and forecasting using the Michigan Quarterly Econometric Model. In addition to the official prerequisite (Econ 402), student should take intermediate microeconomics (Econ 401) and statistics (Econ 404 or 405) before taking this course. Cost:2 WL:1 (Barsky)

D. Labor Economics

421. Labor Economics I. Econ. 401. No credit granted to those who have completed or are enrolled in 320 or 326. (3). (Excl).

This course deals with the economics of labor supply and demand, wage and employment determination, investment in education and training, forms of compensation, and unemployment. The course develops microeconomic models of the labor market, presents relevant empirical evidence, and discusses applications to policy issues. Cost:2 WL:1 (Brown)

E. Industrial Organization and Public Control

333. Economic Analysis of Industrial Policy. Econ. 201 and 202. (3). (Excl).

The goal of the course is a broad analysis of the questions of what has come to be called "industrial policy" and other structural policies aimed at reversing the weak performance of the U.S. economy. We will attempt to examine the subject from several perspectives. The course topics include the definition of an industrial policy, whether American industry is in a condition that merits serious concern, the use of traditional macroeconomic and trade policies, labor's stake in industrial transition, new theories of the nature of the firm, the controversial role of corporate raiding and reorganization, examination of the experience in the specific industries (autos, computers, aircraft) and the role of technology and R and D activity. A final section of the course will evaluate some specific policies and proposed remedies. Many of the topics compare U.S. institutions with those in other countries. Cost:5 WL:1 (Stafford)

431. Industrial Organization and Performance. Econ. 401. No credit granted to those who have completed or are enrolled in 330. (3). (Excl).

An analysis of the behavior and social performance of firms. Emphasis is placed on understanding how firms compete with one another. Topics include oligopoly theory, differentiated products, entry deterrence, collusion, advertising, research and development, price discrimination and strategic rivalry using game theory. There will be a midterm and a final exam. Cost:3 WL:4 (Shaffer)

432. Government Regulation of Industry. Econ. 401. No credit granted to those who have completed or are enrolled in 330. (3). (Excl).

This course describes and analyzes the efforts of governments to control the market power of business enterprises. Topics include dominant position, oligopolistic cooperation, vertical restraint, and merger. Emphasis is placed in American policies, especially antitrust law and regulation by administrative commission. Economics 431 is not required, but knowledge of certain material it covers will be presumed. Students should be prepared to participate frequently in class discussions. Cost:2 WL:1 (Adams)

F. International Economics

340. International Economics. Econ. 201 and 202. No credit granted to those who have completed or are enrolled in 441 or 442. (3). (Excl).

The course provides a general overview of international economics. Topics covered include: the reasons for international trade; trade policies such as tariffs, quotas, and voluntary export restraints; the effects of international trade on the economy, including the distribution of income; determination of exchange rates; the role of the international economy in influencing national income, unemployment, and inflation; and international constraints on macroeconomic policy. Emphasis is on concepts, ideas and institutions, rather than on rigorous analysis. Course grade is based on a final exam, two midterm exams, and an optional 5-10 page paper. Students are also expected to stay abreast of international economic news by reading the New York Times or the Wall Street Journal, and class will include weekly class discussions of the current news. WL:1 (Deardorff)

441. International Trade Theory. Econ. 401 or the equivalent. (3). (Excl).

This course deals with the theory of international trade. It explores the important theories that explain what countries trade and why they gain from trade. These theories include the theory of comparative advantage and the factor-proportions theory of trade, as well as more recent theoretical developments. The course also deals with several other related topics, such as empirical tests and applications of trade theory, the theory of trade policy, preferential trading arrangements, international factor movements, and trade and economic development. (Stern)

442. International Finance. Econ. 402 or the equivalent. (3). (Excl).

This course analyzes the macroeconomic and financial interactions between countries. The international component of income and output determination theories of the balance of payments, exchange rate determination, international asset markets and banking, and developing country issues are covered. There are graded homeworks, one midterm and a final exam.

G. Comparative Economic Systems and National Economies

451. Comparative Analysis of Economic Systems. Econ. 401. No credit granted to those who have completed or are enrolled in 350. (3). (Excl).

Designed for students with a background in intermediate microeconomic theory. Covers: (1) methods and criteria for analyzing and comparing economic systems; (2) theoretical models and case studies of a capitalistic market economy, a socialist market economy (with and without workers' management of firms), and a centrally planned economy; (3) Comparative analysis of selected economies' policies and performance; and (4) analysis of current reforms in socialist economies. Reading assignments in various sources; lectures. Mid-term exam and option of final exam or presentation of study report in class. No papers. Cost:3 WL:1 (Dernberger)

453. The European Economy. Econ. 401 and 402; or permission of instructor. (3). (Excl).

The structure and performance of the Western European economies since World War II. Material is organized to illuminate the impact of governmental policies on the manner in which product, capital, and labor markets function. Substantial attention is devoted to Project 1992. Also treated are the Common Agricultural Policy, the competition policy, and the proposed Economic and Monetary Union of the European Communities. Students should be prepared to participate frequently in class discussions. Cost:2 WL:1 (Adams)

H. Economic Development

461. The Economics of Development I. Econ. 401. No credit granted to those who have completed or are enrolled in 360. (3). (Excl).

This course will focus primarily on micro-economic issues in third world countries. It is intended for upper-division undergraduates in economics and graduate students from outside economics. The topics will cover discussions on rural markets, migration, poverty, population, health, gender issues, education, dual economics and labor markets. Besides the stated prerequisite, Economics 402 would be helpful background for this course. The text requires a basic knowledge of calculus, and students will also be assigned the latest Human Development Report, and a bulk pack of readings. The course grade will be based on regular quizzes (40%), class presentations (10%), and a choice of a paper or final exam. Cost:3 (Rao)

I. Environmental Economics

471/Nat. Res. 571. Environmental Economics. Econ. 401. or Nat. Res. 570 or equivalent. (3). (Excl).

Economics 471 is a broad introduction to market failure, with theoretical, empirical, institutional, and historical perspectives on twentieth-century environmental problems. This course is intended primarily for upper-division undergraduates in the economics concentration and for graduate students from outside economics (but note carefully the prerequisite a solid intermediate microeconomic theory course is essential). The format for most classes is lecture-with-interruption, with time allocated for questions and discussions. Students must acquire a small textbook and a large course pack. There will be periodic problem sets and five quizzes (the best four of which will count). The overall course guide will be based on the problems (15%), the quizzes (30%), the final exam (50%), and the student's contribution to the classroom (5%). Cost:3 WL:1 (Porter)

472/Nat. Res. 583. Intermediate Natural Resource Economics. Econ. 401 or Nat. Res. 570. (3). (Excl).

This course is an introduction to the economics of natural resources. Both replenishable resources (such as water, trees, fish, whales, wildlife, and agricultural products) and nonreplenishable resources (such as oil and minerals) will be considered. The increased consumption today has future consequences. The course therefore emphasizes intertemporal choice. Comparisons will be made between the market outcome when self-interested agents interact over time and efficient intertemporal exploitation of the resource. Policies to correct externalities will be discussed with emphasis on enforcement and information problems of environmental regulators. The courses presumes familiarity with elementary probability, calculus, and static microtheory at the level of Economics 401 or equivalent. Grades will be based on hour test(s), problem sets and a final exam. (Salant)

J. Public Finance

481. Government Expenditures. Econ. 401. No credit granted to those who have completed or are enrolled in 380. (3). (Excl).

Economics 481 studies the productive and allocative role of government and of other aggregations of individuals, as well as the interactions among politics, economics, and ethics. Topics covered include welfare economics, the theory of public goods, collective choice, problems of group decision making, externalities and common pool problems, cost-benefit analysis, and intergovernmental public finance. Depending upon the time available, we may also consider in detail public policies in the areas of pollution and income redistribution. In considering these topics, emphasis will be placed on theoretical as well as on political issues. The class format will combine lecture and discussion. WL:1

L. Other Topics in Economics

407. Marxist Economics. Econ. 201 and 202. (3). (Excl).

This course provides a critical introduction to Marxian economic analyses of capitalist society in general, of contemporary U.S. capitalism in particular, and of historical and potential alternative economic systems. The first part of the course examines "classical" Marxian theory, based on readings of Marx and Engels as well as recent interpreters. The second part of the course focuses on contemporary political economy examined within a variety of broadly Marxian frameworks. Substantial class discussion is devoted to application of economic theory to social practice. A very broad range of topics is open for the course term paper. (Thompson)

487. Urban Economics. Econ. 401. (3). (Excl).

This courses uses economic analysis to explain why cities exist, where they develop, how they grow and how different activities are arranged within cities. It also explores the economics of various urban problems. The first part of the course focuses on the determinants of location of economic activity within and between urban areas. Topics include comparative advantage and regions, urbanization and economic growth in the United States, and the theoretical analysis of urban structure. The second part of the course uses economic analysis to examine problems of special interest to urban areas. Topics discussed include the economics of poverty, housing markets, racial discrimination and segregation, transportation systems and local public finance. EVALUATION: The course grade will be based on two midterm examinations and a final examination. (Courant)

M. Honors Program, Seminars, and Independent Research

495. Seminar in Economics. Econ. 401, 402, and 404 or 405; and permission of instructor. (3). (Excl). May be elected for a total of 6 credits.

Admission Information for 495 Seminar: Closed at CRISP. To apply for admission into the 495 seminar, students must provide both an unofficial transcript and a completed application no later than October 29. The transcript should be requested from the General Information Window in the LS&A lobby (open 8-4:15 Mon-Fri) and should be sent to the economics undergraduate office, room 158 Lorch Hall. The fee is $1.00 and the process takes several days. An application form is available from the economics undergraduate office, 158 Lorch Hall, and should be returned to 238 Lorch Hall. Admission will be the decision of the instructor and will be posted at Room 158 Lorch Hall by November 5.

Section 001 Benefit-Cost Analysis. During the first half of the course, each student will select a current, real, local problem, project, or policy while, as a group we work through a serious (tough theory but not much math) textbook in benefit-cost analysis (with some problem sets and maybe even quizzes). During the second half of the course, students will pursue their topic, reporting regularly to the seminar on their progress and the problems they are encountering. By "reporting regularly" is meant that an outline, a preliminary report, and a final paper will be submitted. (Porter)


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