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 hours of lecture per week taught by the professor and one and a half hours of discussion per week taught by a teaching assistant. Grades are based largely on lecture-wide hour tests and the final exam, but there will be homework assignments. 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 WL:None. For information about overrides, call the Undergraduate Office at 763-9242. (Section 100:Gerson; Section 200/300:Laitner)

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:Hymans; Section 200:Weisskopf)

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. (Varian)

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. Economics 401 provides useful background for certain topics, but it is not a prerequisite for 402. Cost:3 WL:3 (Basu)

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).

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 (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 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).

See Statistics 405. (Hill)

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 economic data. (Solon)

409. Game Theory. Math. 217, or permission of instructor. (3). (Excl).

This course will consist of an introduction to the subject of game theory. Game theory has become an important technique for studying competitive and cooperative phenomena in economics and the social sciences. Traditional economics emphasizes the two extremes of economic decision-making: perfect competition, in which no firm can affect market prices, and pure monopoly, in which one firm has complete price-setting power. Game theory is a technique which allows intermediate situations to be analyzed: for example those that arise during wage negotiations or in price wars between two large firms. The same principles that govern the strategic interaction of players in parlor games like Chess or Poker turn out to be widely applicable to a whole range of such phenomena in economics, biology, and political science. The current course will explore the beginnings of the subject using simple illustrative examples. Some calculus and matrix algebra will be needed, but the mathematical requirement is more for some sophistication in methods of argumentation rather than for specific techniques. (If in doubt about your mathematical background, consult Prof. Stacchetti.) A final examination will count 50%. The remaining 50% will based on weekly homework assignments. Cost:1 WL:4 (Stacchetti)

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 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. In addition to the prerequisites (Econ 401, and 404 or 405), it is strongly recommended that students elect Intermediate Microeconomics (Econ 401) before 411. Cost:2 WL:1 (Wolfe)

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)

435. Financial Economics. Econ. 401 and 405, or equivalent. (3). (Excl).

This class introduces the economics analysis of financial markets and financial decision making. Topics covered include asset pricing theory (the valuation of stocks, bonds, and options), net present value analysis, portfolio management, and financial market organization and behavior. The course develops the capacity to analyze investment strategies and policy issues from the standpoint of economic theory (as opposed to conventional wisdom). Our main objectives are to understand why the financial markets work the way they do, to develop useful tools for the analysis of investment opportunities, and to use economic methods to think critically about policy issues such as government regulation of financial markets and the taxation of investment returns. Students will gain experience with actual financial markets through guest lectures from market professional, tracking their own "model portfolios," and regular reading of The Wall Street Journal.

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).

This course is the second term of a two-term offering in labor economics. The previous term covered the supply of and demand for labor, wage determination, investment in education and training, and some coverage of theories of unemployment. In this term we will offer a very brief review of supply and demand, and turn to labor demand, technology and trade, the structure of compensation, unions and collective bargaining, discrimination in the labor market, government employment policy, government policies which affect the labor market, and unemployment. WL:1 (Johnson)

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 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 (Roth)

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 governmental efforts to control the market power of business enterprises. Attention is devoted to both antitrust policy and economic regulation. Topics include dominant position, oligopolistic cooperation, vertical integration, vertical restraint, and merger. Readings include legal as well as economic materials. Emphasis is placed on American policy institutions. Economics 431 is not required, but knowledge of certain material it covers will be presumed. Students should be prepared to participate frequently in class discussion. (Adams)

F. International Economics

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. Theories of the international component of income determination, the balance of payments and exchange rate 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)

G. Comparative Economic Systems and National Economies

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

The structure, function, and performance of the European economy since World War II. Emphasis is placed on description and analysis of European economic integration. Topics include the origins and institutions of the European Community, analyzing a customs union, creating a unified internal market, the common agricultural policy, monetary union, and social Europe. Students should be prepared to participate frequently in class discussions. (Adams)

454. Economics of Japan. Econ. 201 and 202. (3). (Excl).

Analysis of Japan's economic organization, structure and performance. Special emphasis is placed on the character of Japanese economic planning, the behavior of Japanese enterprises, the Japanese labor force, and the Japanese household. There will also be ample discussion of Japan's international economic relations. Attention will be given to bilateral and multilateral conflicts in overseas product, financial and technology markets. The class has a lecture format, but questions are welcomed. Course grade will be determined by two one hour exams and a final. Cost:4 WL:1 (Saxonhouse)

457. Post-Socialist Transition in Central/Eastern Europe and the Former Soviet Union. Econ. 201 and 202. (3). (Excl).

This course is an introduction to current economic issues in the post-socialist transition which is currently taking place in Central/Eastern Europe and the Former Soviet Union. Starting with a description of the former socialist systems and their aftermath, the course discusses the short-term problems of transition. They are: price liberalization, macroeconomic stability, and international trade liberalization. Another topic will be the long-term goals of transition, including, among other things, privatization of state-owned enterprises, re-building the social safety net, and restructuring the financial and fiscal system. The course will end with an analysis of different strategies of transition. The Chinese experience shall be briefly treated as an alternatives approach to transition. (Li)

H. Economic Development

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 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. (Dye)

466. Economics of Population. Econ. 401. (3). (Excl).

An introduction to economic analysis of demographic behavior. The course uses an economic perspective to analyze the dramatic changes in fertility, mortality, and marriage in recent decades in both industrialized and developing countries. Data on demographic and economic trends for a wide variety of countries are used throughout the course. The course demonstrates recent innovations in the application of microeconomic theory to demographic behavior, including fertility, marriage, and migration. Students are also introduced to basic techniques of demographic measurement and mathematical demography. Topics include the economic consequences of the baby boom, the effects of an older age structure on the social security system, and the relationship between population growth and natural resources. Students write a paper providing an economic-demographic analysis of their home community or other geographic area. Other coursework includes problem sets, short writing assignments, and the midterm and final examinations. Cost:2 WL:1 (Lam)

I. 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) to get on waitlist. (Swierzbinski)

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 defining characteristic of such resources is that 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. Such comparisons will be made under certainty and uncertainty and when the resource is privately owned or "common property." For balance, models of animal behavior will also be considered including optimal foraging behavior and evolutionary stable equilibria. The course 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. (Swierzbinski)

J. Public Finance

380. Public Finance. Econ. 201 and 202. No credit granted to those who have completed or are enrolled in 481 or 482. (3). (Excl).

This course offers a general introductory survey of the field of public finance. The topics covered include: (1) when markets fail, (2) method of government intervention, (3) program and project evaluation, (4) major Federal, State, and Local taxes and their effects, and (5) intergovernmental financial relations. A lecture/discussion format is used. (West)

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

Economics 482 is the second half of the undergraduate public finance sequence, concentrating on government revenues. The theory of optimal taxation and tax incidence will be examined. From this framework, the equity and efficiency of various forms of government finance will analyzed. These include the personal income tax, corporate income tax, excise taxes, and deficit financing. The course will focus on theoretical issues augmented by contemporary policy. Class format will be lecture and discussion. (West)

K. Economic History

491/Hist. 491. The History of the American Economy. Econ. 201 and 202. (3). (Excl).

This course examines the economic history of the United States from colonial settlement to World War II. We will focus on the sources of the country's economic growth, trends in income distribution, regional integration, and changes in political-economic institutions. We will pay particular attention to the role of government policy in influencing economic outcomes. Students will be evaluated on the basis of weekly essays and a group project on the economic history of Michigan. Cost:2 WL:1 (Levenstein)

494/Hist. 494. Topics in Economic History. Econ. 201 and 202. (3). (Excl).
Section 001 Economic History of Latin America and the Caribbean.
Many of the current economic problems and crises in Latin America have repeatedly arisen in Latin America's history. By looking at the past, we can learn much about the economic possibilities of the region's future. This course examines the economic history of Latin America and the Caribbean of the post-colonial period, from 1820 to the post-World War II era. The course will focus on the integration of Latin America and the Caribbean into the modern world economy and long-term trends in economic growth. We will also pay considerable attention to the role of international markets in Latin America and to the positions of the Latin American countries in the international context. The tools of economic theory will be used to analyze the issues that arise. (Dye)

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. Application forms are available from the Undergraduate Economics Office (158 Lorch Hall) and must be submitted no later than Wednesday, November 3. Students must provide an unofficial transcript (from the General Information Window in the LS&A lobby) and have it sent to the Undergraduate Economics Office. The fee is $1.00 and the process takes several days. Admission will be the decision of the instructor and class lists will be posted outside the Undergraduate Economics Office on Friday, November 12.

Section 001 Quantitative Research in Macroeconomics. This advanced undergraduate seminar is for students who are seriously interested in pursuing research level study of some topics in empirical macroeconomics 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, particular with regard to aggregate supply; labor markets and the marcroeconomy, 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 a B+ or better (permission of the 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 of concurrent study of statistics and econometrics (if you are still making the choice, 405-406 is preferred 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 through original research papers of their own, using computers to analyze data either via spreadsheets or statistical packages. (Barsky)

Section 002 Applied Macroeconomic 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 as part of a team of 3 or 4 to investigate in depth a single local, national, or international topic. Most 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 effects of changes in the property and other taxes on Ann Arbor real estate prices; the effect of copyright enforcement on the equilibrium behavior of copy shops producing course packs and xeroxes of unprotected materials. International examples might include: why doctors make housecalls routinely in some countries but never in others; why has economic reform led to output contraction in the former USSR but output expansion in China, etc. In addition to mainstream economic topics, student sin previous seminars have crossed disciplinary boundaries modelling biological or anthropological problems using the tools of microeconomics. The list of suggested topics will be presented at the first meeting. Emphasis will be on the accurate understanding of real-world institutional details, the art of isolating salient aspects of problems in a formal but tractable model, the testing of that model by controlled laboratory experiments, and when possible the comparison of the predictions of that model with real-world data. Papers and oral presentations will be required. (Salant)

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