Courses in Economics (Division 358: arranged by groups)

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 markets function under competitive conditions as well as with various other types of market organization; the distribution of income and wealth; the public sector; and related topics of current interest. The course format consists of three one-hour lectures per week (either Section 100, 200, 300) taught by the professor and one and a half hours of discussion per week (Section 101-117, 201-217, 301-317) taught by a teaching assistant. Grades are based largely on course-wide hour tests and the final exam, but there will be homework and/or 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:2] (Section 100: Dernberger; Section 300: Laitner)

Section 200. This section examines the microeconomics of capitalism - the behavior of households and businesses and the generation of prices and outputs in markets. Specific topics in Economics 201 include: supply and demand; the differences between competition and monopoly; labor markets and discrimination; the distribution of incomes; environmental issues; the public sector; and international trade. Economics 201 is the first part of the two-term introduction to economics the second part (Economics 202, for which Economics 201 is a prerequisite) examines macroeconomics. Economics 201 and 202 are both required as prerequisites to all further courses in Economics. The course format consists of three large one-hour lectures per week (Section 200 is taught by the professor and one small (35 students or less) one-and-a-half-hour section meeting each week (one of Sections 201-213) taught by a teaching assistant. The textbook (and study guide) in this Economics 201 is Lipsey, Steiner, Purvis, and Courant, MICROECONOMICS, NINTH Edition, 1990. Final grades will be based on: two hour tests (30%); the best three of the four UNANNOUNCED quizzes given during section meetings (15%); several homework assignments that will be announced, collected, graded, and discussed in the section meetings (15%); and the final exam (40%). The grading is NOT done "on a curve," but the experience of your parents and older siblings suggest the median grade will be about B- in the course and that fewer than 15% of the students will earn grades in the A range. 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 makeups will be offered only after proof of DIRE and UNPREDICTABLE circumstances. NOTE also the hour of the lectures, 8: 10-9:00 AM not PM.

Section 211 is an HONORS section, open only to Honors students, taught by the professor; students who take this section must purchase extra materials; students can enroll in this section by override only; candidates for this section must be in the Honors Program and should appear in person at 4-5 PM on Tuesday, 27 November, in 373 Lorch Hall, to learn more about this section and apply for entry (late candidates may petition for any remaining places by regular or electronic mail AFTER 26 November.

Sections 202 and 207 are Comprehensive Studies Program (CSP) sections; these sections meet three hours per week; the grade in these sections is partly based on attendance; see the CSP section in this COURSE GUIDE for further information.

Cost:2 WL:NONE (Porter)

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 GNP, unemployment, inflation, international trade, and economic growth. The course format consists of three one-hour lectures per week (either 100 or 200) by the professor and one and a half hours of section meetings (101-115 or 201-215) each week by a teaching assistant. The section meetings are limited to 35 students. [Cost:2] [WL:Contact Lynette McAdoo, Dept. of Economics] (Section 100: Hymans; Section 200: Courant)

400. Modern Economic Society. For upperclass and graduate students without prior credit for principles of economics. (4). (SS).

A one-term course which covers the basic principles of economics, including both microeconomic and macroeconomic analysis, the theory of production and cost, industrial organization, and input markets. Macroeconomic topics include the determination of national income, inflation and unemployment, money and banking, and stabilization policy. The course is aimed at upperclass and graduate students who are not concentrating in economics. Students who wish to retain the options of further courses in economics or of economics as a possible concentration should take the two-term introductory course, Economics 201 and 202.

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 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. (Bergstrom)

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

This course in macroeconomics deals with the theory of broad economic aggregates such as national income, employment, the price level, and the balance of payments. 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. [WL:4] (001 Howrey; 006 Johnson)

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

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:3 WL:1 (Genius)

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 404. (4). (Excl).

See Statistics 405. (Sarkar)

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

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 analysis of economic data. Previous computer experience is NOT a prerequisite. [Cost:2] [WL:3] (Kmenta)

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

This course provides an introduction to Marxian and neo-Marxian analysis of capitalist society in general and of contemporary U.S. capitalism in particular. The first part of the course is devoted to classical Marxian economics, drawing on readings from the works of Marx and Engels as well as recent sources. The second part of the course focuses on contemporary neo-Marxian political economy, drawing on the writings of economists and other social scientists working within the broad Marxian tradition. Cost:3 (Thompson)

C. Economic Stability and Growth

411. Money and Banking. Econ. 402. 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 policy in influencing asset prices and the economy. Monetary and financial economics are developed at a formal level. Topics covered include financial institutions and markets, interest rate determination, portfolio theory, capital markets, the regulation of financial institutions, the money supply process, money demand, and monetary policy. Evaluation will be based on homework assignments, two midterms, and the final exam. Method of instruction is lecture and discussion. Econ 411 is one of two courses in a departmental sequence; the other course in the sequence is Econ 412. The required prerequisite is Econ 402, Intermediate Macroeconomics. Additional recommended prerequisites are Statistics (Econ 404 or 405) and Econ 401, Intermediate Microeconomics. [Cost:2] [WL:4] (Evans)

D. Labor Economics

422. The Structure of Labor Markets. Econ. 401. No credit granted to those who have completed or are enrolled in 320 or 326. (3). (Excl).

In this course we shall discuss theories of wage and employment (and the associated unemployment) under perfect competition and under monopoly. We shall use these models to derive the implications of some policies that are intended to affect the wage, the unemployment and the welfare of workers. (Schwartz)

E. Industrial Organization and Public Control

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 why firms exist, oligopoly theory, differentiated products, entry deterrence, collusion, advertising and trademarks, mergers and expenditures on research and development. There will be a midterm and a cumulative final exam. [Cost:2] [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 studies government policies toward business. Government intervention in private business takes three forms in the U.S.: antitrust laws, direct regulation of prices, outputs, and entry, and safety and information regulation. In antitrust, we look at the laws and their enforcement on issues of monopolization, price fixing, mergers and other market restrictions. Direct economic regulation of specific industries is then examined. We will study the electric power, airline, natural gas, and telecommunication industries. Finally, we look at issues of unfair or deceptive advertising, health and safety standards for products and work places, and environmental protection. (O'Brien)

438/HSMP 661 (Public Health). Economics of Health Services. Econ. 401 or permission of instructor. (3). (Excl).

This course provides an analysis of the medical sector in the U.S. It starts with an examination of medical services as one input in a production function for health. It then examines the efficiency with which medical services are produced, public policies, and the financing of medical services. Other topics include the demand for medical care, hospitals, and medical manpower and regulatory and competitive strategies to improve efficiency. Lecture format. Three exams. [Cost:3] [WL:4] (Berki)

F. International Economics

441. International Trade Theory. Econ. 401 or the equivalent. No credit granted to those who have completed or are enrolled in 340. (3). (Excl).

In this course we shall present and discuss alternative theoretical models of International Trade. A theory may work well (be appropriate) for a given economic environment. Other theories may work better (are more appropriate) in other environments. Most countries impose some barriers on free trade. We shall use the theoretical models to infer what are the consequences of these barriers and will discuss the reasons for their existence. WL:1 (Schwartz)

442. International Finance. Econ. 402 or the equivalent. No credit granted to those who have completed or are enrolled in 340. (3). (Excl).

The course deals with macroeconomic analysis and issues for an open economy. Topics include: the foreign exchange market and the balance of payments; the income-absorption and monetary-asset market approaches to national income determination and the balance of payments; macro-stabilization policies and central bank intervention under fixed and floating exchange rates; Eurocurrency markets; monetary integration; and reform of the international monetary system. Grading will be based on two midterms and a final exam. There will be optional homework assignments. Economics 441, the other half of the international sequence, is not a prerequisite. [WL:1] (Wells)

G. Comparative Economic Systems

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 function of product, capital, and labor markets. Substantial attention is devoted to the European Community's Project 1992. Students should be prepared to participate frequently in class discussions. [Cost:2] [WL:1] (Adams)

455. The Economy of the People's Republic of China. Econ. 201 and 202. (3). (Excl).

Analysis of economic organizations, structure, system of planning, economic performance, and problems in China. Approximately first third of term, however, spent in review of developments before 1949. Basically lecture format due to class size, but questions allowed and discussed. Midterm and final exam used to determine course grade. Paper required for graduate credit. [Cost:2] [WL:1] (Dernberger)

456. The Soviet Economy. Econ. 201 and 202. (3). (Excl).

A comprehensive and intensive analysis of the Soviet economy, including aspects of (1) economic history; (2) operation and problems in regard to planning, pricing, finance, management, labor, agriculture, and foreign economic relations; (3) assessment of economic performance; and (4) economic reform. Assigned readings and lectures. Two examinations. May be used (along with Econ 451) for departmental concentration sequence in Comparative Economic Systems. [Cost:2] [WL:1] (Ickes)

H. Economic Development and National Economies

360. The Developing Economies. Econ. 201 and 202. No credit granted to those who have completed or are enrolled in 461. (3). (Excl).

This course is intended for students who know that some Third World countries have developed handsomely in the past 20-30 years while other have fared badly and wonder why. Those who take the course should have had 201 and/or 202 but need not be Econ concentrators. There will be no sophisticated math, yet graphs will be important to understanding the material. Examples will more often than not be drawn from Africa because of the instructor's experience, but the subjects of study are essentially the 79 low- and lower-middle income countries listed by the World Bank. Eastern Europe is not included. The course will cover development theory and practice, emphasizing the role of economic policy. The changing structure of developing economies; the declining but vital importance of agriculture; industrialization; trade strategy; the role of the state; foreign aid and investment; and the debt crisis these and other topics will be covered. Students will be required to buy a textbook, ECONOMIC DEVELOPMENT by Jan S. Hogendorn (1987) and a course pack with recent articles and book excerpts. There will be two half-hour quizzes, a paper on a developing country of the student's own choosing, and a final exam. Cost:2 WL:1 (Steedman)

462. The Economics of Development II. Econ. 401 and Econ. 360 or 461. (3). (Excl).

This course discusses topics in economic development by examining specific countries and institutions. Each case study entails lectures, readings, and class discussion. The case study approach attempts to relate the theoretical issues learned in previous courses to specific problems faced by individuals and governments. Students are expected to have completed Economics 401, 402, and 461. Course grades will reflect performance on a midterm, final, and term paper. (Gersovitz)

466. Economics of Population. Econ. 201 and 202. (3). (Excl).

Economics 466 is an introduction to the economic approach to the study of human population growth. Its primary aim is to acquaint the student with changing trends in fertility, mortality, migration and family composition, and the implications of these trends for the economy. Students are exposed to a modest amount of demographic measurement, but the focus of the course is on the economic determinants of fertility and migration, the economic consequences of population growth in both developing and developed countries and the policy issues related to population growth. Among other things the course deals with zero population growth; the man-food balance in the world; the reversal of earlier rural to urban migration trends in the U.S. and the impact of immigration on the U.S. labor force; the ecological consequences of population growth in the United States and the developing countries. There will be a midterm and an optional term paper. This course is interdisciplinary in its orientation, and students with little economics in their background are welcome. (Lam)

I. Urban and Environmental Economics

370/Nat. Res. 470. Natural Resource Economics. Econ. 201 and 202. No credit granted to those who have completed or are enrolled in Econ. 471 or 472. (3). (Excl).

A one-term introduction to Environmental and Natural Resource Economics. Topics may include externalities, unpriced goods, cost-benefit analysis, resource scarcity, exhaustible resource depletion, renewable resource harvesting and common property problems. WL:5. See Office of Academic Programs (in School of Natural Resources) for Override.

J. Public Finance

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

This course first covers principles of tax analysis that yield insights as to the behavior of taxes on people's economic status and on their behavior. More specifically, we will examine methodological techniques for examining how taxes affect incentives, economic efficiency, and income distribution. The second portion of the course applies these principles to major taxes used at the national, state, and local levels of government; these include, for example, the personal income tax, the sales tax, and the property tax. The third and final section of the course addresses selected public policy issues whose resolution hinges in major part on taxation issues. The class room format will be primarily lecture with opportunities for questions and discussion of these questions. Grades will be based on two midterms, a short paper, and a final exam. Cost:4 WL:1 (Nelson)

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

This course will consider topics in what has been called the "new law and economics" the application of economic reasoning and techniques to legal areas traditionally perceived as noneconomic: contracts, accident law, criminal law, and the like. Our analysis will concentrate on two types of issues. First, using the tools of applied microeconomics, we will analyze various legal rules and policies with a view to how they may be optimally designed. Second, we will analyze the political economy of law, addressing the question of how economic analysis complements and conflicts with other goals of the law, such as justice or fairness. The course should be of interest to pre-law students and those with a bent for applied microeconomics, but since a main theme of the class will be to investigate the nature and limits of economic reasoning as a guide to social policy, it should also be of interest to students with broader interests in social studies. All students registering for this course are expected to have taken Economics 401 or its equivalent. Also, because a substantial part of the material will be explored through discussion, students will be expected to be prepared for each class. WL:1 (Katz)

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

This course 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. Topic 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 the best 5 out of 6 short quizzes (30%), a midterm examination (30%), and a final examination (40%). No make-ups will be allowed unless a physician's excuse is provided. Quizzes will be announced at least one week in advance. TEXTBOOK: URBAN ECONOMICS by Mills and Hamilton (Scott-Foresman) (Beeson)

K. Economic History

493/Hist. 493. European Economic History. Econ. 201 and 202. (3). (Excl).

This course examines the emergence of modern economic growth, principally in its European origins, but also as it spread beyond them. The starting point is to try and understand the sources of the Industrial Revolution within the historical context from which it evolved, in Europe. The particulars of a number of national experiences are then examined. Returning finally to the larger framework, the process of modern industrialization within the international economy in this century are reviewed. The objective of the course is to develop an historical perspective on the modern world economy and on problems of economic growth and development. Cost:2 (Roehl)

L. 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 to any of the 495 seminars, students must provide both an unofficial transcript and a completed application no later than Monday, November 12. 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, Lorch Hall Room 158. The fee is $1.00 and takes two days. A single application form for all of the 495 seminars in available from Lynette McAdoo (763-9242) in the economics undergraduate office, and should be returned to her. Students will be asked to state their preferences among the three seminars on their application. Admission will be the decision of the instructor and will be posted before Thanksgiving recess.

Section 001 TRADE POLICY, COMPETITIVENESS AND U.S.-JAPANESE ECONOMIC RELATIONS. This course will examine issues raised by the increasing integration of the global economy. Particular emphasis will be placed on the structure and operation of the Japanese economy and its implications for present and future US-Japanese economic relations. Special topics covered will include the Uruguay Round, Regional Free Trade Areas, competition in high technology, industrial policy, liberalization of financial markets and stabilization policy. To apply, follow the instructions under "Admission Information" applicable to all of the 495 seminars. (Saxonhouse)

Section 002 CAPITALISM, SOCIALISM AND DEMOCRACY RECONSIDERED. The recent demise of orthodox communist regimes in Eastern Europe and the USSR has exposed the economic failures of bureaucratic state socialism; while a decade of growing social and economic problems in the United States has raised questions about the virtues of unfettered free-market capitalism. This seminar will be devoted to a re-examination of the goals and institutions of both capitalism and socialism, with a view to conceptualizing and analyzing new models of economic organization that seek to blend elements of capitalism and socialism into democratic and productive systems. The course will be organized around the following five major topics: 1. The crisis of "actually existing socialism" 2. The problems of "actually existing capitalism" 3. Theoretical issues in comparative systems analysis (markets vs. planning; types of property; etc.) 4. Case studies of mixed socioeconomic systems (e.g., Yugoslavia; Sweden; Mondragon) 5. New models of socioeconomic organization (transitions toward capitalism in Eastern Europe; models of democratic market socialism) Classes will be organized mainly as seminar discussions; students will be evaluated on the basis of participation in discussions and several paper writing assignments. Cost of books etc. should not exceed $50. To apply, follow the instructions under "Admission Information" applicable to all of the 495 seminars. (Weisskopf)

Section 003 APPLIED MICROECONOMIC MODELLING. This seminar will illustrate how elementary microeconomic tools can be used to illuminate observed real-world phenomena and to evaluate alternative policy interventions. Students will be required typically as part of a team to investigate in depth a single local, national or international topic. It is anticipated that, in most cases, topics will be suggested by the instructor. Local Examples might include: sliding-scale regulation of public utilities formerly practiced in Ann Arbor (on Michcon); the creation and sale of monopoly franchises by the University of Michigan; strategic interaction between realtors and by-owner sales in the Ann Arbor housing market; bargaining behavior at Ann Arbor's farmer's market; implementation of fees for trash in Ann Arbor. International Examples: The viability of international economic sanctions; the role of the International Energy Agency in mitigating disruptions in the oil market; self-interested storage and production behavior in anticipation of changes in economic regimes in Eastern Europe; resource savings from eliminating government stockpiles of gold, etc. Emphasis will be placed on accurate understanding of real-world institutional details, the art of isolating salient aspects of problems in formal but tractable model, the testing of that model by controlled laboratory experiments, and when possible the comparison of the predictions of the model with real world data. Papers and oral presentations will be required. To apply, follow the instructions under "Admission Information" applicable to all of the 495 seminars. (Salant)

M. Institute of Public Policy Studies Courses

573/IPPS 573. Benefit-Cost Analysis. Econ. 555 or the equivalent; or permission of instructor. (4). (Excl).

This course teaches students how to evaluate government programs. It covers the mechanics of benefit-cost analysis, how scarce or unemployed resources should be priced, the choice of proper time-discount rates, treatment of income distribution issues, human capital, environmental benefits, inter-governmental grants, tax expenditures, and regulatory problems. An essential part of the course is a term project each student selects a program and evaluates it.

N. Interdisciplinary Survey Courses

396/Hist. 333/Pol. Sci. 396/REES 396/Slavic 396/Soc. 393. Survey of Eastern Europe. May not be included in the minimum 24 credits required for a concentration in economics. (4). (SS).

See REES 396. (Szporluk)

428/Asian Studies. 428/Phil. 428/Pol. Sci. 428/Soc. 426. China's Evolution Under Communism. Upperclass standing or permission of instructor. May not be included in the minimum 24 credits required for a concentration in economics. (4). (Excl).

See Political Science 428. (Oksenberg)

O. Accounting

271/Accounting 271 (Business Administration). Accounting. Not open to freshmen. May not be included in the minimum 24 credits required for a concentration in economics. (3). (Excl).

This course covers basic financial accounting principles for a business enterprise. Topics include the accounting cycle, merchandising accounts, asset valuation, income measurement, partnership accounting, and corporation accounting. [Cost:2] [WL:5, Get on waitlist at CRISP. Sign departmental waitlist. Attend the first class meeting. Policies and procedures for issuing

CSP section available. See the Comprehensive Studies Program (CSP) section in this GUIDE.

272/Accounting 272 (Business Administration). Accounting. Economics 271. Not open to freshmen. May not be included in the minimum 24 credits required for a concentration in economics. (3). (Excl).

This course completes the coverage of financial accounting principles and provides an introduction to management accounting. Topics include investments, long-term liabilities, the statement of changes in financial position, consolidated statements, job-order and process cost accounting, special analysis for management, and standard costs. [Cost:2] [WL:5, Get on waitlist at CRISP. Sign departmental waitlist. Attend the first class meeting. Policies and procedures for issuing


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