Spring 2010 Undergraduate Course

Social Analysis 10: Principles of Economics, which is listed under the Core Curriculum, is the full-year introductory course in Economics. Social Analysis 10 is designed both for potential concentrators and for those who intend no further work in the field. The Department of Economics strongly encourages students considering concentration to take this course in their freshman year. This is a required course for all Economics concentrators and a prerequisite for higher level courses in economics.

General Economics; Economic Theory; History of Economics

Economics 1010b. Macroeconomic Theory
Catalog Number: 2924
Christopher L. Foote
Half course (spring term). M., W., F., at 9, and a one-hour weekly section to be arranged. EXAM GROUP: 2
Theories and evidence on economic growth and fluctuations. Determination of gross domestic product, investment, consumption, employment, and unemployment. Analysis of interest rates, wage rates, and inflation. Roles of fiscal and monetary policies. Extensions to the international economy.
Note: Economics 1010b fulfills the intermediate macroeconomic theory requirement for Economics concentrators. Students may take either Economics 1010b or Economics 1011b for credit. This course, when taken for a letter grade, meets the General Education requirement for Empirical and Mathematical Reasoning or the Core area requirement for Social Analysis.
Prerequisite: Social Analysis 10. While no specific mathematics course is required, knowledge of calculus at the level of Mathematics 1a is assumed.

Economics 1011b. Macroeconomic Theory
Catalog Number: 6993
David I. Laibson and Philippe Aghion
Half course (spring term). Tu., Th., 10-11:30, and a one-hour weekly section to be arranged. EXAM GROUP: 12, 13
The same topics as in 1010b, but with a more mathematical approach.
Note: Economics 1011b fulfills the intermediate macroeconomic theory requirement for Economics concentrators. Students may take either Economics 1010b or Economics 1011b for credit. This course, when taken for a letter grade, meets the General Education requirement for Empirical and Mathematical Reasoning or the Core area requirement for Social Analysis.
Prerequisite: Economics 1011a, Mathematics 21a, or permission of the instructor.

Economics 1032. The Packing Problem: The Behavioral Economics of Scarcity - (New Course)
Catalog Number: 48309
Sendhil Mullainathan
Half course (spring term). W., 2–4. EXAM GROUP: 7, 8
Why do highly successful people have a rush of energy and get things done at the last minute? Why didn’t they have that rush earlier? Why does poverty persist around the world? Why is obesity rampant? This course argues that all these questions can be understood by understanding the behavioral economics of scarcity. The course will span concepts from mathematics of computation, psychology, evolutionary biology to numerous economic applications.
Prerequisite: Social Analysis 10, an introductory course in Psychology, and Statistics 100, 101 or 104.

Economics 1052. Advanced Game Theory
Catalog Number: 2634
Markus M. Möbius
Half course (spring term). Tu., Th., 10–11:30. EXAM GROUP: 12, 13
Introduction to game theory and its applications to economics at a high level of rigor. Topics include extensive form and strategic form games, Nash’s equilibrium and existence theorem, subgame-perfect equilibrium, Bayesian equilibrium, and applications to repeated games, auctions, and bargaining.
Note: Students may not take both Economics 1051 and Economics 1052 for credit.
Prerequisite: Economics 1011a and Mathematics 21a, or equivalent.

Economics 1056. Market Design - (New Course)
Catalog Number: 69207 Enrollment: Limited to 40.
Susan Athey
Half course (spring term). Tu., Th., 2:30–4. EXAM GROUP: 16, 17
This course studies the design of organized markets, focusing on efficient organization and the incentives created by market rules. Applications include online auction markets, government auctions of natural resources, procurement auctions, matching markets (students to classes or schools, medical residents to hospitals, kidneys to recipients). The analysis relies on a mix of documenting the rules of real-world markets, game theoretic analysis, empirical analysis, and experimental work. A research paper is optional with advance permission of instructor.
Prerequisite: 1011a plus one of 1051, 1052, 1060, 1070, 1640, 1641, or permission of instructor

Economics 1059. Decision Theory (formerly Theories of Decisionmaking in Economics)
Catalog Number: 1322
Tomasz Strzalecki
Half course (spring term). M., W., 1–2:30, and a weekly section to be arranged. EXAM GROUP: 6, 7
An introduction to formal models of decision making in economics, including both classical and psychologically-motivated approaches. Topics include risk, uncertainty, ambiguity, and temptation.
Prerequisite: Economics 1010a or 1011a and Mathematics 21a.

Economics 1060. Contracts and Organizations
Catalog Number: 3267
Oliver S. Hart
Half course (spring term). M., W., 2:30–4, and a weekly section to be arranged. EXAM GROUP: 7, 8
Explores theoretical and empirical work on incentive problems within and between organizations (with more emphasis on the theory). Topics include agency problems arising from moral hazard and asymmetric information, team problems, career concerns, relational contracts, incomplete contracts, boundaries of the firm, authority and delegation, financial contracting, public ownership.
Prerequisite: Economics 1010a or 1011a, Mathematics 20.

Econometrics and Quantitative Methods

Economics 1123. Introduction to Econometrics
Catalog Number: 0813
Guido W. Imbens (spring term)
Half course (fall term; repeated spring term). Spring: Tu., Th., 1–2:30, and a weekly section to be arranged. EXAM GROUP: Spring: 15, 16
An introduction to multiple regression techniques with focus on economic applications. Discusses extensions to discrete response, panel data, and time series models, as well as issues such as omitted variables, missing data, sample selection, randomized and quasi-experiments, and instrumental variables. Aims to provide students with an understanding of and ability to apply econometric and statistical methods using computer packages.
Note: Students may take either Economics 1123 or Statistics 139 for credit. Statistics 139 will not count as econometrics requirement. Also, Economics 1123 may not be taken for credit if taken after Economics 1126, but credit will be given for both courses if Economics 1123 is taken first. This course, when taken for a letter grade, meets the General Education requirement for Empirical and Mathematical Reasoning or Core requirement for Quantitative Reasoning.
Prerequisite: Statistics 100.

Economics 1126. Quantitative Methods in Economics
Catalog Number: 4076
Gary Chamberlain
Half course (spring term). Tu., Th., 11:30–1. EXAM GROUP: 13, 14
Topics include elements of statistical decision theory and related experimental evidence; some game theory and related experimental evidence; maximum likelihood; logit, normal, probit, and ordered probit regression models; panel data models with random effects; omitted variable bias and random assignment; incidental parameters and conditional likelihood; demand and supply.
Note: Economics 1123 may not be taken for credit if taken after Economics 1126, but credit will be given for both courses if Economics 1123 is taken first. This course, when taken for a letter grade, meets the Core requirement for Quantitative Reasoning.
Prerequisite: Statistics 100 or preferably 110; Mathematics 20.

Economics 1127. Statistical Methods for Evaluating Causal Effects
Catalog Number: 9967
Donald B. Rubin
Half course (spring term). Tu., Th., 2:30–4. EXAM GROUP: 16, 17
Statistical methods discussed for inferring causal effects from data from randomized experiments or observational studies. Students will develop expertise to assess the credibility of causal claims and the ability to apply the relevant statistical methods for causal analyses. Examples will come from many disciplines: economics, education, other social sciences, epidemiology, and biomedical science. Evaluations of job training programs, educational voucher schemes, changes in laws such as minimum wage laws, medical treatments, smoking, military service.
Prerequisite: Statistics 100 or preferably Statistics 111; Mathematics 20.

Cross-listed Courses

Statistics 100. Introduction to Quantitative Methods for the Social Sciences and Humanities
Statistics 104. Introduction to Quantitative Methods for Economics
Statistics 110. Introduction to Probability

Economic History; Development Economics

Economics 1389. The Economics of Health and Development
Catalog Number: 1900
Amitabh Chandra (Kennedy School)
Half course (spring term). Tu., Th., 1–2:30. EXAM GROUP: 15, 16
Examines health issues in developing countries from the standpoint of economics, with focus on applied microeconomic research and econometric methods. Specific topics include private and social returns to health, the effect of health on growth and development, gender differences in health, structural problems in delivery, health finance, technology adoption and behavioral change, infant mortality, worms, AIDS, malaria, and the long-run impact of disease. For each topic, special attention is paid to the identifying causal effects that inform the design of public policies, and contrast the lessons learnt from this approach to those obtained from observational studies.
Note: Offered jointly with the Kennedy School as PED-318.
Prerequisite: Economics 1010a (or 1011a) and 1123 (or 1126).

Cross-listed Courses

Government 1197. The Political Economy of Africa

Monetary and Fiscal Theory and Policy; Public Sector Economics

Economics 1410. Public Economics: Designing Government Policy
Catalog Number: 6136
Nadarajan Chetty, Mihir A. Desai (Business School), and Martin Feldstein
Half course (spring term). M., W., (F.), 2:00-3:30, and a weekly section to be arranged. EXAM GROUP: 7, 8
This course analyzes what role the government should play in a market economy. It covers topics such as tax and welfare policy, unemployment insurance, environmental protection, education policy, social security, and the implications of behavioral economics for public policy. The course emphasizes recent empirical and theoretical research on policy issues and will teach students how to conduct such studies.
Note: Students should have some knowledge of basic calculus and statistics, but there is no formal mathematics prerequisite. Offered jointly with the Kennedy School as API-125.
Prerequisite: Economics 1010a or 1011a or permission of instructor.

Economics 1420. American Economic Policy
Catalog Number: 8110
Martin Feldstein
Half course (spring term). M., W., F., at 10, and a weekly section to be arranged. EXAM GROUP: 3
Analyzes major issues in American economic policy including taxation, Social Security, health care reform, budget policy, monetary and fiscal policy, and exchange rate management. Current economic issues and policy options discussed in detail and in the context of current academic thinking.
Note: Offered jointly with the Kennedy School as API-126.
Prerequisite: Economics 1010a or 1011a, or permission of instructor.

Economics 1425. Political Economics - (New Course)
Catalog Number: 68084 Enrollment: Limited to 20.
Andrei Shleifer
Half course (spring term). Th., 2:30–4:30. EXAM GROUP: 16, 17, 18
Discusses several research areas in political economy, including the origins of the state, comparative political systems, theories of economic reform, fiscal problems in democracies, rule of law, privatization, and regulation.
Note: A research paper is required. This course meets the concentration writing requirement.
Prerequisite: Economics 1010a or 1011a.

Economics 1460. Economics of Health Care Policy
Catalog Number: 4540
Joseph P. Newhouse (Kennedy School, Medical School, Public Health)
Half course (spring term). M., W., 8:30–10. EXAM GROUP: 1, 2
Policy issues related to the following: the demand for medical care services, especially as a function of insurance; the demand for insurance and issues of selection; reimbursement policies of Medicare and other payers toward health plans, hospitals, and physicians; effects of health maintenance organizations and managed care; and malpractice and tort reform. Focus on federal policy, although state and local perspectives will receive some attention.
Note: Students may not take both Economics 1460 and Quantitative Reasoning 24: Health Economics and Policy for credit. Offered jointly with the Kennedy School as HCP-272.
Prerequisite: Economics 1010a or 1011a. A statistics course is highly desirable.

Economics 1490. Growth and Crisis in the World Economy - (New Course)
Catalog Number: 35497
Dale W. Jorgenson
Half course (spring term). Tu., Th., 2:30–4. EXAM GROUP: 16, 17
This course assesses the future of the tri-polar world economy - Asia, Europe, and North America. The course analyzes the resurgence of the US economic growth, the emergence of asset pricingbubbles, and the ensuing financial and economic crisis. We will discuss the sources of Asian growth miracles and the convergence and subsequent divergence of Europe and North America. What growth rate is sustainable and who will lead? What are the forces that threaten long-term prosperity?
Prerequisite: Social Analysis 10 and Mathematics 1a

Cross-listed Courses

Societies of the World 31. Crisis, Globalization and Economics - (New Course)

International Economics

Economics 1530. International Monetary Economics
Catalog Number: 2269
Gita Gopinath
Half course (spring term). M., W., 2:30–4. EXAM GROUP: 7, 8
This is an intermediate level international finance and macroeconomics course that uses a mix of theoretical, empirical and policy frameworks to analyze topical problems in international finance. The topics include exchange rate determination, currency interventions, monetary policy coordination, capital flows and currency crises.
Note: May not be taken for credit with Economics 1531.
Prerequisite: Economics 1010b or 1011b.

Economics 1531. Economics of International Financial Policy
Catalog Number: 7018
Jeffrey A. Frankel (Kennedy School)
Half course (spring term). M., W., 2:30–4; and a weekly section meeting to be arranged. EXAM GROUP: 7, 8
This course examines the macroeconomics of open economies. It covers models appropriate to major industrialized countries. Topics include the foreign exchange market, devaluation, and import and export elasticities; simultaneous determination of the trade balance, national income, balance of payments, money flows, and price levels; capital flows and our increasingly integrated financial markets; monetary and fiscal policy in open economies; international macroeconomic interdependence; supply relationships and monetary policy targets; exchange rate determination; and international portfolio diversification.
Note: Offered jointly with the Kennedy School as ITF-220. May not be taken for credit with Economics 1530.
Prerequisite: Economics 1010/1011. Knowledge of international trade theory and econometric techniques is also desirable, but not essential. Students must be very comfortable with algebra.

Economics 1540. Topics in International Trade
Catalog Number: 7470
Pol Antràs
Half course (spring term). M., W., 1–2:30. EXAM GROUP: 6, 7
Covers advanced topics in international economics with a special emphasis on an analytical approach to the recent process of globalization. Topics include the role of multinational firms in the global economy, the effect of international outsourcing on wages, and trade and industrial development.
Prerequisite: Economics 1535 and basic knowledge of calculus and econometrics.

Industrial Organization and Regulation; Environmental Economics

Economics 1630. Economics of Sports and Entertainment - (New Course)
Catalog Number: 95925
Stanley Engerman (University of Rochester)
Half course (spring term). Tu., Th., 10–11:30. EXAM GROUP: 12, 13
The markets for professional and amateur sports and entertainment are analyzed. Impacts of market organization and public policy on attendance, salaries, and profits are examined.
Prerequisite: Economics 1010a or 1011a

Economics 1641. Industrial Organization: Theory and Practice
Catalog Number: 9099 Enrollment: Limited to 30.
Ulrich Doraszelski
Half course (spring term). M., W., 1–2:30. EXAM GROUP: 6, 7
Theoretical and empirical analysis of contemporary topics in industrial organization. Uses economic theory to analyze important issues facing firms, and examines the practical challenges of empirical applications of theory. Topics include horizontal relationships and mergers, vertical integration and control through contractual arrangements, price discrimination, information and search costs, innovation and intellectual property rights, and network externalities. Each topic combines theoretical analysis with a study of actual firm behavior.
Note: Students may not take both Economics 1640 and Economics 1641 for credit.
Prerequisite: Economics 1010a or 1011a.

Economics 1661. Environmental and Resource Economics and Policy
Catalog Number: 2115
Robert N. Stavins (Kennedy School)
Half course (spring term). M., W., 1–2:30 and an optional review section F., 1–2:30. EXAM GROUP: 6, 7
Provides a survey, from the perspective of economics, of environmental and natural resource policy. Combines lectures on conceptual and methodological topics with examinations of public policy issues. Topics include principles of environmental and resource economics, nonrenewable resources (minerals and energy), renewable resources (fisheries), air pollution (stationary and mobile sources, acid rain, and global climate change), and sustainable development and political aspects of environmental policy.
Note: Offered jointly with the Kennedy School as ENR-201.
Prerequisite: Social Analysis 10 or permission of instructor.

Economics 1666 (formerly Economics 1026). The Economics of Climate Change
Catalog Number: 9468
Martin L. Weitzman
Half course (spring term). Tu., Th., 1–2:30. EXAM GROUP: 15, 16
Core analysis and basic empirics underpinning economic models of climate change. This topic is an evolving area on the research frontier of applied theory that is currently of great interest to economists. Develops relevant aspects of time discounting, economics of uncertainty, modern cost-benefit analysis, capital-theoretic dynamics, and optimal control theory. The primary application is to environmental economics, especially climate change.
Note: Requires background in economic theory, mathematics, and statistics.
Prerequisite: Economics 1011a, 1011b, and Statistics 100

Financial Economics

Economics 1745. Corporate Finance
Catalog Number: 5889
Efraim Benmelech
Half course (spring term). Tu., Th., 1–2:30, and a weekly section to be arranged. EXAM GROUP: 15, 16
Introduction to corporate finance, including capital budgeting, capital structure of firms, dividend policy, corporate governance, and takeovers.
Prerequisite: Economics 1010a or 1011a, Mathematics 20, and Statistics 100.

Economics 1760. The Financial Crisis
Catalog Number: 4594
Jeremy C. Stein
Half course (spring term). M., W., 1–2:30. EXAM GROUP: 6, 7
This course provides a detailed examination of events in financial markets during the crisis period that began in August of 2007. Topicsinclude: the housing bubble and mortgage markets, the role of the banks and the shadow banking system, policy responses by the Treasury and the Federal Reserve, and longer-run regulatory reform. The conceptual approach to these topics will draw heavily on recent research in financial economics.
Prerequisite: Either Economics 1723 or 1745 is required.

Labor, Human Resources, and Income Distribution; Urban Economics

Economics 1813. The Indebted Society
Catalog Number: 6957 Enrollment: Limited to 50.
James L. Medoff
Half course (spring term). M., W., (F.), at 10. EXAM GROUP: 3
In recent years, the US economy has entered an unprecedented era of dependence on debt by governments, corporations and households. A massive debt overhang permeates our economy, casting a shadow over government, corporate and household finance and shaping decision-making processes for all of these actors. This course examines both causes and effects of this penchant for debt, utilizing a multidisciplinary approach drawing from labor economics, public/corporate finance, law, public policy, and even sociology and psychology.
Prerequisite: Economics 1010a (or 1011a) and Economics 1010b (or 1011b).

Economics 1818. Economics of Discontinuous Change
Catalog Number: 3029
Richard B. Freeman
Half course (spring term). Tu., Th., 1–2:00, and a weekly section to be arranged. EXAM GROUP: 15
Explores discontinuous changes in the economic position of groups and countries and presents mathematical and computer simulation models designed to illuminate these changes. Examples include growth/decline of trade unions, segregation of groups, development of linkages on the internet, changes in corporate work culture, growth of social pathologies in neighborhoods, and Malthusian concerns about the environment. Models include nonlinear simulations, neural networks, finite automata, evolutionary stable strategies, causal conjunctures, agent-based simulations, and genetic algorithms.
Note: A research paper is required. Students should have some mathematical background, but there is no prerequisite.
Prerequisite: Social Analysis 10

Tutorials, Junior Seminars, and Senior Thesis Seminars in Economics

*Economics 910r. Supervised Reading and Research
Catalog Number: 1020
Jeffrey A. Miron
Half course (fall term; repeated spring term). Hours to be arranged.
Supervised reading leading to a long term paper on a topic or topics not covered by regular courses.
Note: Does not count for concentration credit and may not be taken Pass/Fail. Requires signatures of the adviser and of the Director of Undergraduate Studies. Application available at the Economics Undergraduate Office at Littauer Center, North Yard.

*Economics 970. Tutorial — Sophomore Year
Catalog Number: 7923
Jeffrey A. Miron
Half course (fall term; repeated spring term). Fall: W., 2-3:30. First meeting only September 2, 2009; Spring: M., 2-3:30. First meeting only January 25, 2010.
A series of small seminars focusing on applications of economic theory to real problems.
Note: One term required of all Economics concentrators. Enrollment limited to concentrators.
Prerequisite: Both terms of Social Analysis 10 (or equivalent); Statistics 100, 104, or 110; Economics 1010a or 1011a and current enrollment in Economics 1010b or 1011b.

Economics 985 Senior Thesis Seminars

These seminars are limited to seniors writing senior honor theses. Each seminar focuses on the research topics of interest to the participants. Emphasis is placed on research design, methodological problems, literature review, and sources of data. Regular student presentations of work in progress are required. An Economics 985 seminar taken in the senior year substitutes for Economics 990, and seniors will not be allowed to enroll concurrently in both courses. All 985 seminars are limited to 16 students.

*Economics 985a. Research in Microeconomics
Catalog Number: 7166
Jeffrey A. Miron and members of the Department
Full course. Tu., 4–6.
Workshop for seniors writing theses in theoretical and applied microeconomics. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985c. Research in Labor Economics
Catalog Number: 5409
Jeffrey A. Miron and members of the Department
Full course. W., 1–3. EXAM GROUP: Fall: 6, 7
Workshop for seniors writing theses in labor economics and related topics. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985d. Research in Economic Development
Catalog Number: 4989
Jeffrey A. Miron and members of the Department
Full course. W., 2:30–4:30.
Workshop for seniors writing theses in the areas of economic history and economic development, including health and population issues. Emphasis on choice of research topics, methodologies, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985e. Research in Macroeconomics
Catalog Number: 3740
Jeffrey A. Miron and members of the Department
Full course. M., 4–6.
Workshop for seniors writing theses in the fields of monetary and fiscal policy, business cycles, and economic growth. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985f. Research in International Trade and Finance
Catalog Number: 7157
Jeffrey A. Miron and members of the Department
Full course. M., 3–5:30.
Workshop for seniors writing theses in international trade and finance. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985g. Research in Behavioral and Experimental Economics
Catalog Number: 2566
Jeffrey A. Miron and members of the Department
Full course. Tu., 4–6.
Workshop for seniors writing theses in behavioral and experimental economics. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required.

*Economics 985h. Research in Financial Markets
Catalog Number: 0350
Jeffrey A. Miron and members of the Department
Full course. Th., 4–6.
Workshop for seniors writing theses in finance. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honor thesis are required. Topics include asset pricing and corporate finance.

*Economics 985k. Research in Public Economics
Catalog Number: 0871
Jeffrey A. Miron and members of the Department
Full course. Th., 3–5.
Workshop for seniors writing theses in public economics. Emphasis on choice of research topics, methodology, and data sources. Written and oral presentations of work in progress leading toward completion of a major research paper or senior honors thesis are required. Topics have included taxation, health economics, environmental and resource economics, and education.

*Economics 990. Tutorial — Senior Year
Catalog Number: 7342
Jeffrey A. Miron and members of the Department
Full course. Hours to be arranged.
Note: Students who are writing a senior thesis out of sequence (i.e., beginning in the spring) must enroll in Economics 990 in the spring and complete the course in the fall. Students must write a 25-page paper at the end of the first term of Economics 990. Students currently enrolled in Economics 985 may not enroll in Economics 990.