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).

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; the public sector; environmental issues; international trade; 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 101-111, 201-214, 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. Prerequisites: high school algebra and geometry and a willingness to use it. Cost:2 WL:2; For information about overrides, call the Undergraduate Office at 763-9242. (100:Gerson; 200:Morgan; 300:Whatley)

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. Cost:2 WL:Contact the Undergraduate Office, Dept. of Economics, 158 Lorch Hall (Section 100:Deardorff; Section 200:Stafford)

109. Laboratory Economics. (4). (SS). (QR/1).

This course, for students without any previous economics, will introduce them to the subject through experience in a laboratory. By participating in laboratory experiments, then analyzing the results in class discussion and written reports, they will learn the principles of economics from their own empirical observation. By participating in laboratory experiments involving auctions, markets elections, and economic games, students will observe economic behavior in a controlled setting. Interpreting these experiences in the light of assigned readings and in class discussions, they will come to understand the principles of economics not being told but by seeing them for themselves. (Bergstrom)

195. Seminar in Introductory Economics. (3). (SS).
Section 001 United States in the Global Economy.
In the past four decades the United States has evolved from being the world's single economic superpower able to go it alone in economic decisions and often to impose its will on the rest of the world to being only one of several economic giants in a global economy where all nations, large and small, are interdependent. This seminar will address the meaning and implications of this economic interdependence, and its significance for the future of the United States. The course will be organized around a series of four to six paperback books, selected for their provocative and/or insightful perspectives on this issue. Students will discuss these books in class, perhaps making presentations to the class where appropriate, and will write a series of 3-5 page papers on the topics addressed by each. (Stern)

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 (Bergstrom)

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. Cost:3 WL:3 (Basu)

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

This course provides an introduction to descriptive statistics, probability theory, statistical inference, and regression analysis needed to understand and appreciate empirical work in economics. 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 (Howrey)

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).

See Statistics 405. (Hill)

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. (001:Bui; 004:Johnson)

556/IPPS 556. Macroeconomics. Permission of instructor. (4). (Excl).

Consideration of a country's living standards and how a country can influence these by savings-investment policies. (Gramlich)

C. Monetary and Financial Economics

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 professionals, tracking their own "model portfolios," and regular reading of The Wall Street Journal. (Hussman)

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, 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 (Bjorkland)

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 (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)

438/Health Management and Policy 661. Economics of Health Services. Econ. 401 or HMP 660, or permission of instructor. (3). (Excl).

This course will introduce students to the fundamental concepts of the field of health economics. The basic framework of economics will be used to analyze the behavior of hospitals, physicians, insurers, and health care consumers. The tools of economics will be applied to managerial issues such as make-or-buy decisions or pricing decisions. Additionally these economic tools will be used to analyze how various parties might respond to changes in the health care system. By the end of the course students should be able to assess the potential impact of hypothetical changes in the health care system on costs and access as well as on the well-being of hospitals, physicians and insurers. Lecture format. Two exams. Cost:2 WL:4 (Hirth)

F. International Economics

441. International Trade Theory. Econ. 401. (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 second part of the course deals with barriers to free trade and trade policies. Various policies will be analyzed, such as the tariff, quota, voluntary export restraints, subsidies, and other international protective taxes. The third part includes various topics such as preferential trading arrangements, economic integration, and international factor movements. Cost:1-2 WL:1 (Shy)

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)

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. (Mazumdar)

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

This course is the second part of a two-course sequence on economic development. Economics 462 utilizes the more general knowledge developed in 461 to examine selected topics in detail. It focuses on policy issues by examining analytical approaches to policy options, determination, and changes and by investigating real world outcomes. This term the focus will be on globalization. We will explore the economic incentives and strategies of all the major actors in global production: multinational corporations, developing and developed country governments, and developing and developed country labor. Our case studies include border industries in Mexico and NAFTA, the electronics industry in Singapore, the worldwide textile industry, and the coffee exporting industry in the Ivory Coast. We will use the Internet as a resource for acquiring real time and place information on worldwide industries. Requirements for the class include a critical essay, a set of Internet bookmarks on a particular globalization issue, a group term paper to which each member contributes a section, and an individual research paper. Class sessions will alternate among lectures, discussion, and group research on the Internet. There will be a course pack to purchase and other required reading from various online sites. (Kossoudji)

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. Computer-based exercises are used to illustrate economic and demographic concepts and examine empirical evidence from a variety of populations. 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/NR&E 470. Natural Resource Economics. Econ. 101 and 102. 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 include externalities, unpriced goods, cost-benefit analysis, resource scarcity, exhaustible resource depletion, renewable resource harvesting, and common property problems.

J. Public Finance

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

Economic analysis of the equity and efficiency effects of major U.S. taxes, including the personal income tax, the corporate income tax, and the social security tax. Examination of commonly proposed tax changes. Lecture method; midterm and final exams; term paper. Cost:2 WL:1 (Slemrod)

K. Economic History

491/Hist. 491. The History of the American Economy. Econ. 101 and 102. (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, midterm and final exams, and class discussion. Cost:2 WL:1 (Levenstein)

L. Other Topics in Economics

418. Business Cycles. Econ. 402. (3). (Excl).

This course will look at business cycle theory in a way that combines macroeconomics and microeconomics. It will emphasize economic dynamics, particularly the reactions of output, consumption, investment, the real wage, the real interest rate, and inflation to fiscal, monetary, and technological shocks. Prerequisites: Economics 401 and 402. Calculus will be used extensively for maximization. (Kimball)

483/Poli. Sci. 482. Positive Political Economy. Econ. 401. (3).

This course is an introduction to positive political economy/public choice. It focuses on the game theoretic analysis of political institutions and their impact on economic policies. The tools of game theory will be introduced and used to study legislative voting rules, voting in mass election, deterrence, bargaining, public goods provision, manipulation in various settings, etc. A knowledge of the basics of algebra, set theory, probability theory, and calculus is required. Cost:2 WL:4 (Sönmez)

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)

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. A midterm, final, and regular problem sets are given. Cost:3 WL:3 (Deardorff)

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 Tuesday, October 31. 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 Tuesday, November 7.

Section 001 Environmental. Prerequisites: Econ. 471 or 472, Econ. 406 (preferred) or 404; Econ. 431 and/or 481 is highly recommended. Economics 495 (Environmental) studies advanced topics relating to the economics of the environment and environmental regulation. The seminar begins with classroom review of essential background topics and issues of current research interest, after which participants will be expected to pursue (possibly in small groups) a significant research topic agreed to by the instructor. A background in undergraduate public finance or environmental or resource economics, as well as undergraduate econometrics, is desirable, as is familiarity with undergraduate industrial organization. (Bui)

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