Courses in Economics (Division 358)

A. Introductory Courses

101(201). Principles of Economics I. No credit granted to those who have completed or are enrolled in 400. (4). (SS). (QR/2).

Section 100 and Section 300. Economics 101 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, 200, or 300) taught by the professor and one and a half hours of discussion per week (Section 101-112, 201-216, 301-312) taught by a teaching assistant. Grades are based largely on course-wide hour tests and the final exam, but there will be homework and possibly quizzes in the sections. Economics 101 is the first part of the two-term introduction to economics. Both 101 and 102 are required as prerequisites to the concentration and to upper level courses in economics. Cost:2 WL:None. For information about overrides, call the Undergraduate Office at 763-9242. (100:Gerson; 300:Morgan)

SECTION 200. Economics 101 examines the microeconomics of capitalism the behavior of households and businesses and the generation of prices and outputs in markets. Specific topics in Economics 101 include: supply and demand; the differences between competition and monopoly; labor markets and discrimination; the distribution of incomes; environmental issues; and government taxation and expenditure. Economics 101 is the first part of the two-term introduction to economics the second part (Economics 102, for which Economics 101 is a prerequisite) examines macroeconomics. Prerequisites for 101: high school algebra and geometry and a willingness to use it. The course format consists of three large one-hour lectures per week taught by the professor and one small one-and-a-half-hour section meeting per week taught by a teaching assistant. The textbook (and study guide) in this lecture section is Lipsey, Steiner, Purvis, and Courant, Microeconomics, TENTH Edition (which is being used in two sections of this term's Econ 101). Final grades will be based on: two hour tests (total of 40%); four UNANNOUNCED quizzes given during section meetings (10%); weekly homework assignments that will be collected, graded, and discussed in the section meetings (10%); and the final exam (40%). NOTE the DATES and TIMES of the two hour tests and the final exam in the TIME SCHEDULE, and BE SURE that you can attend all three. Cost:2 WL:None (Porter)

102(202). Principles of Economics II. Econ. 101. No credit granted to those who have completed or are enrolled in Econ. 400. (4). (SS). (QR/2).

Economics 101 and 102 are required as prerequisites to the concentration and to upper-level courses in Economics. In Economics 102, 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:D'Archangelis)

108. Introductory Microeconomics Workshop. Frosh standing and concurrent enrollment in Economics 101. (1). (Excl). Offered mandatory credit/no credit.

Students will meet weekly for one hour with a faculty member for discussions of the previous week's Wall Street Journal (WSJ) articles, stressing the use and application of the microeconomic tools being learned in Economics 101. In the first few weeks, the workshop will study how to read the WSJ, its ideological positions and its technical material (such as foreign exchange, commodity, and forward market quotations). Once supply and demand has been studied in Economics 101, much of the WSJ becomes discussible. Workshop attendance is mandatory, and each student will be required to subscribe to the WSJ for the term. During the first few minutes of the seminar, the articles for the subsequent week's seminar will be selected and one or two students appointed to open the discussion of each article on the week's agenda (and turn in to the professor a neat copy of their briefing notes). The remainder of each seminar will be spent talking about the articles that were selected the previous week. Evaluation of students will be entirely on the basis of their attendance and preparation, as evidenced by their briefing notes and classroom participation. (Porter)

B. Economic Theory and Statistics

401. Intermediate Microeconomic Theory. Econ. 101 and 102, and Math. 115. (4). (SS). (QR/1).

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 one term of calculus. Economics 401 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 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. WL:1 (Gerson)

402. Intermediate Macroeconomic Theory. Econ. 101 and 102, and Math. 115. (3). (SS). (QR/1).

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)

404. Statistics for Economists. Econ. 101 and 102 and Math. 115. No credit granted to those who have completed or are enrolled in 405 or Stat. 311, 402, or 412. (4). (Excl). (BS). (QR/1).

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:1

405/Statistics 405. Introduction to Statistics. Math. 116 or 118, or permission of instructor. Juniors and seniors may elect this course concurrently with Econ. 101 or 102. 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). (BS). (QR/1).

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 examinations and homework assignments. There are 3 hours of lectures and 1 hour of discussion per week. Cost:3 WL:3 (Howrey)

406. Introduction to Econometrics. Econ. 405 or Statistics 426. (4). (Excl). (BS).

Economics 406 is an introduction to the statistical analysis of economic relationships. Most of the course focuses on the theory and application of regression analysis. Students are expected to be familiar with elementary calculus. The course work includes examinations and assignments including computer exercises involving economic data.

C. Monetary and Financial Economics

310. Money and Banking. Econ. 101 and 102. (3). (Excl).

This course studies the role of money, banking, and finance in the economy. At the macroeconomic level, we will study how monetary policy influences interest rates, prices, and overall economic activity. At the microeconomic level, the course will introduce topics in portfolio theory, risk management, and banking regulation. The nature of banks and problems of their supervision and control are linked to the recent banking crisis in the United States. We will also examine in detail how the Federal Reserve operates monetary policy, and the problems it faces in pursuing objectives such as economic growth, low inflation, and the containment of financial crises. (Hussman)

412. Topics in Macroeconomics. Econ. 402. (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 (Dominitz)

E. Industrial Organization and Public Control

330. Industrial Performance and Government Policy. Econ. 101 and 102. No credit granted to those who have completed or are enrolled in 431 or 432. (3). (Excl).

The essential features of large-scale business enterprise in the United States today. Emphasis is placed on market structure and government policy as determinants of business behavior and performance. Readings include primary documents and economic classics as well as textbooks. Students should be prepared to participate frequently in class discussions. (Adams)

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

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

441. International Trade Theory. Econ. 401 or the equivalent. (3). (Excl).
Section 001.
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, international factor movements, preferential trading arrangements, multilateralism, and trade and the environment. Cost:2 WL:4 (Stern)

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

This course analyzes the macroeconomic and financial interactions between countries. Theories of the balance of payments, the exchange rate, and the international component of income determination are developed. Examples of fixed and flexible exchange-rate regimes are covered, including the gold standard, Bretton Woods, and the EMS. There are graded homeworks, one midterm and a final exam. Cost:3 WL:1 (Oppers)

H. Economic Development

360. The Developing Economies. Econ. 101 and 102. No credit granted to those who have completed or are enrolled in 461. (3). (Excl).

This course examines the structure and problems of the low-income nations. It analyzes the economic issues of development policy and discusses the economic relationships between the poor and rich nations of the world. Econ. 360 is designed for students who wish a relatively nontechnical introduction to the problems of 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. (Kossoudji)

I. Environmental Economics

471/NR&E 571. Environmental Economics. Econ. 401 or NR&E 570 or equivalent. No credit granted to those who have completed or are enrolled in Econ. 370. (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. The course deals with: (1) the theory of externalities and public goods (and "bads"); (2) current U.S. policy concerning air and water pollution and a variety of other environmental issues (plus some comparison with other countries' policies); and (3) an extended application to various aspects of waste generation, collection, disposal, and recycling. There is a paper to be written on some waste topic, and several of the final classes of the term will involve student presentations. There will be a few problem sets, several short quizzes, and one long paper. There will be no final exam. The overall course grade will be based on the problems (15%), the quizzes (40%), the paper (40% in total outline, 5%; first draft, 5%; class presentation, 5%; and final paper, 25%), and the student's overall contribution to the classroom (5%). Cost:2 WL:1 (Porter)

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, and cost-benefit analysis. 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

395. Topics in Economics and Economic Policy. Econ. 101 and 102. (3). (Excl).
Section 001 Economics of the Automobile.
The course is divided into three parts, each directed by a different lecturer: (1) the history and structure of the U.S. auto industry, recent changes in its technology and international competitiveness, and U.S. international trade policy, particularly voluntary export quotas, anti-dumping laws, and NAFTA; (2) the impact of the auto on the urban, regional, and national economies of the United States, stressing urban decline, suburban growth, highway depreciation, and traffic congestion; (3) the external effects of the auto - energy consumption, air pollution, and highway safety, looking at the effects on safety of equipment and driver behavior, of minimum driving and drinking ages, and of automobile insurance. The course will stress economic analysis and its policy implications. Students must acquire two paperbacks (The Machine That Changed the World and Stuck in Traffic) and a course pack. Grades will be based on six quizzes and a short paper. Cost: 2 WL:1 (Levinsohn, Courant, Porter)

407. Marxist Economics. Econ. 101 and 102. (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)

476/CAAS 457. Political Economy of Black America. Econ. 101. (3). (Excl).

Focuses on the economic life of African Americans in the U.S. including the role of economics in the social construction to race, and the relationship between the evolution of the U.S. economy and the changing status of African Americans. (Whatley)

485. Law and Economics. Econ. 401. (3). (Excl).

This course analyzes legal issues from an economic perspective. It covers topics in a variety of legal areas, including torts, contracts, property law, and legal procedure and dispute resolution. For example, the course will ask the question of who should be liable for damage in automobile accident cases in order to give drivers incentives to take an economically efficient level of precaution against accidents. It will ask under what circumstances buyers or sellers should be encouraged to breach contracts and what penalties for breach will encourage them to breach only when such behavior is economically efficient. It will ask how the availability of insurance changes behavior in uncertain situations such as these. It will examine how the high costs of litigation influence the outcomes of legal disputes and also will analyze various methods of resolving disputes outside of the legal system and their effects. A "truth in advertising" proviso: students intending to go to law school should be cautioned that this course will not help in getting admitted any more than any other economics course. There will be midterm and final exams, and several problem sets. Readings include Polinsky's INTRODUCTION TO LAW AND ECONOMICS. (White)

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 all 495 Seminars: Closed at CRISP. To apply for admission into the 495 Seminar, students must provide both an Academic Term Report (unofficial transcript) and a completed application no later than Thursday, March 23. The Academic Term Report can be obtained by using Wolverine Access at the UM Computing Sites and should be sent to the Undergraduate Economics Office (158 Lorch). Application forms are available from the Undergraduate Economics Office (158 Lorch Hall) and the completed forms should be returned there. Admission will be the decision of the instructor and will be posted outside 158 Lorch by Thursday, March 30.

Section 001 Quantitative Research in Macroeconomics. This advanced undergraduate seminar is intended for students who are seriously interested in pursuing research level study of some topic in empirical macroeconomic and related areas. Topics to be chosen from (student input in choosing from the menu is welcomed) include: determinants of stock, bond, gold, and real estate prices and their interaction with the macroeconomy; economic growth and productivity improvements, including the "productivity slowdown" in the developed world, and differences between various less developed countries in their escape from poverty; inflation; the relationship between imperfectly competitive industrial structures and macroeconomics, particularly with regard to aggregate supply; labor markets and the macroeconomy, including wage and unemployment dynamics; the distribution of wealth, including changes in the degree of inequality in recent years, and Black-white wealth differentials; and determinants of consumption and saving behavior, including their interaction with tax policy. The prerequisites are completion of 401 and 402 with B+ or better (permission of instructor is possible in extenuating circumstances, but lower grades in the basic courses generally bode badly for success at the level intended for this course), a high degree of fluency with high school algebra and manipulation of fractions, etc., some competence in elementary calculus, and completion or concurrent study of statistics and econometrics (if you are still making the choice, 405-406 is preferable to 404). I will try to help you understand how researchers arrive at ideas and carry them out, using some illustrations from my own published work and that of my colleagues that I was fortunate enough to observe as it evolved from the beginning stages to completion. Students will be guided though original research papers of their own, using computers to analyze data either via spreadsheets or statistical packages. (Barsky)

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