Course List

73-100 Principles of Economics
Literally, an introduction to economic principles, the goal of this course is to give students an understanding as to what constitutes good “economic thinking”. This thought process is grounded in the construction and use of economics models. Drawing on issues in both microeconomics and macroeconomics, fundamental principles are shown to transcend particular examples and allow the field to be seen as a coherent, unified whole.

73-101 Freshman Seminar
A topics-based course for first-year students who intend to major in economics. The subjects discussed vary from year-to-year and from instructor-to-instructor. Check with the Undergraduate Economics Program or their website for descriptions of recent and current offerings.
 

73-111 Internship I
By permission of the Undergraduate Economics Program.
 

73-112 Internship II
By permission of the Undergraduate Economics Program.
 

73-113 Internship III
By permission of the Undergraduate Economics Program.
 

73-148 Environmental Economics
A course for non-majors which explores the interplay between economics and environmental issues. Topics include: market failures and environmental problems, economically efficient allocations of environmental resources, and the intended and unintended consequences of public policies designed to improve the environment. Practical issues surrounding the feasibility of implementing theoretically efficient principles and policies are analyzed, and alternative policies that might achieve better results in practice are investigated. Prerequisite: minimum grade of "C" in 73-100.

73-150 Microeconomics
A calculus-based introduction to microeconomics. Topics in partial equilibrium analysis include supply and demand, consumer theory, theory of the firm, profit maximizing behavior, monopoly theory, and perfect competition. The course concludes with an introduction to general equilibrium analysis and the welfare laws. Prerequisite: 21-120 and (minimum grade of "C" in 73-100).

73-200 Macroeconomics
Through macroeconomic models built upon microeconomic foundations, insights are developed into economic growth processes and business cycles. Topics include aggregation and measurement, national income, business cycle measurement, economic welfare theorems and social inefficiencies, the effect of government fiscal policy upon employment and productivity, and the relationship between investment, interest rates and economic growth. Prerequisites: 21-120 and (minimum grade of "C" in 73-150).

73-226 Quantitative Economic Analysis
Using and extending upon students' introductory knowledge of probability and economic models, this course introduces students to the tools of economic analysis. Taking the perspective of active economic participants (rather than outside observers), students gain experience with a diversity of analytical techniques--such as regression analysis and simulation--in the context of real world data decision problems. Classes consist of a combination of cases, lectures, and interactive discussions. This course will not be offered after 2008-2009AY. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-200 or 73-251) and (21-325 or 36-207 or 36-217 or 36-310 or 36-225 or 36-310 or 73-207).

73-251 Economic Theory
This course prepares students for advanced coursework in economics by providing a mathematically intensive overview of economic theory. Students take advantage of their knowledge of multi-dimensional calculus and constrained optimization techniques in order to understand the development and logical consistency of the most commonly employed economic models. Topics include consumer preferences and utility function representations, consumer choice under a budget constraint, substitution and income effects, compensated and uncompensated demands, expected utility theory, risk and insurance, technology and production functions, cost minimization, profit maximizing firms, perfect competition, single-firm markets, game theoretic analysis of markets with few firms, introduction to general equilibrium models and the welfare laws. Course will be replaced by 73-252/253 in Spring 2008. Prerequisites: (21-256 or 21-259) and 73-100.

73-252 Advanced Microeconomic Theory
This course provides a mathematically intensive overview of advanced applications of microeconomic theory. Topics include: Marshallian and Hicksean demands, indirect utility functions, substitution/income effects and the Slutsky equation, expected utility theory, risk and insurance, game theory, principle/agent problems, oligopoly, and general equilibrium theory. (Lecture, 3 hours) Course will be offered in Spring 2008. Prerequisites: 21-122 and (21-256 or 21-259) and (minimum grade of "C" in 73-150).

73-253 Advanced Macroeconomic Theory
This course provides a mathematically intensive overview of advanced applications of microeconomic theory. Topics may include: Solow and neo-classical growth models, the role of money and its effect on the economy, and the over-lapping generations model. (Lecture, 3 hours) Prerequisites: 21-122 and (21-256 or 21-259) and (minimum grades of "C" in 73-200 and 73-252).

73-261 Econometrics
This course takes as its starting point ordinary-least-squares estimation and the linear regression model, which are presented utilizing vector and matrix notation. This is followed by the application of OLS to non-linear models. Cases are then considered where the various assumptions of OLS do not hold and what corrective actions should be taken. Topics include: nonlinear-least-squares, two-stage estimation, instrumental variables, simultaneous equations, maximum likelihood estimation, and logit/probit models. Prerequisites: 21-122 and (21-256 or 21-259) and (minimum grade of "C" in in 73-226).
 

73-270 Writing for Economists
A writing course specifically designed for third-year Economics majors and additional majors. Students gain experience with technical writing techniques and skills needed for both their senior thesis and their eventual professional careers. The course emphasizes both individual and group projects. Prerequisites: (minimum grade of "C" in 73-200) and 76-101.
 

73-310 History of Economic Ideas and Analysis
This course will be organized around the study of several central topics in the development of economics such as: the "invisible hand;" classical analysis of trade, value, and income distribution; the marginalist revolution; general equilibrium theory; classical monetary economics; Keynesian macroeconomics; and recent trends in theory and empirical analysis. Wherever possible, examination of the contemporary policy issues motivating major analytical developments will be included. Prerequisite: (21-256 or 21-259) and (minimum grade of "C" in 73-200).
 

73-325 Strategic Behavior in Non-cooperative Games
Combining non-cooperative game theory and its experimental methods in a computer laboratory environment, this course teaches students how to develop and test models of social and business interactions. Both extensive and normal form game are treated in depth, including the concept of Nash equilibrium and it refinements. In the latter part of the course, students design, run and analyze their own experiments, and do individual experimental/research projects. Prerequisite: (21-256 or 21-259) and (minimum grade of "C" in 73-150).
 

73-330 Inequality and Social Policy Across Countries and Over Time
Three basic types of institution - markets, communities, and states (i.e. public governments) - determine the distribution of economic resources and opportunities in societies. The balance between these governing institutions has changed dramatically over time, at very different rates across societies. This course will begin with economic and political theory on why these differences over time and across countries may exist. Then it will survey some of these differences across both industrialized and pre-industrial societies and investigate their causes and consequences. Some of the questions the course will ask include the following: In the industrialized world, the public sector (government) plays a much larger role in Europe than in the . Why is this so? How does this affect the quality of everyday life for different classes of people? How have globalization and technological change affected the distribution of income and social policy in industrialized countries, and how does this affect the public sector? In some tribal societies, people have no access to markets at all. How does this affect distributive behavior within communities? Finally, what might be the ultimate causes of income inequality on a global scale? Are there prehistoric and environmental roots in the ways peoples of different societies live today? This course will examine these questions by studying theoretical and empirical research conducted by economists, economic anthropologists, political economists, and economic geographers on these questions. Prerequisites: (21-256 or 21-259) and (minimum grades of "C" in 73-150 and 73-200 and 73-226).
 

73-328 Health Economics
This course will teach the student to use economic analysis to understand critical issues in health care and health policy. We will address issues such as the following:
1. What factors best explain the level and rate of growth of U.S. health expenditures?
2. Does the recent high rate of growth of U.S. health care expenditures make U.S. firms less competitive in international markets?
3. What are some of the likely consequences (intended and unintended) of the proposed reforms to Medicare?
4. Can physicians induce demand for their services?
5. What are the impacts of managed care on the health care system?
6. Do strong affiliations between physicians and health plans hurt competition?
 

The student who successfully completes this course will be able to:
 

1. Identify the flow of resources in the U.S. health care system, how purchasers pay for their services, and how providers obtain their revenues.
2. Understand the value of health and health care.
3. Evaluate how health care resources should be allocated.
4. Describe the structure of the health insurance industry, explain the incentives facing insurers, understand the strategies they use to compete and their impacts on social welfare.
5. Understand the demand for medical care, and what role providers play in shaping this demand.
6. Explain the economics of managed care and describe how competition works in health care.
Class will consist of lectures and group presentations. Evaluation will include homework problems, group projects, and exams. This course will interest any individual planning a career in health or related industries. It will also be of interest to students who wish to understand how economics is applied to some of our most prominent and contentious policy issues.
No prior knowledge of health care is supposed. Prerequisites: (21-256 or 21-259) and minimum grades of "C" in (73-251 and 73-226).
 

73-340 Labor Economics
This course uses economic theory and data to analyze topics such as: (1) individuals decisions about hours of work, investment in training or education, and choosing an occupation; (2) firms decisions about hiring, training workers, and setting wage rates; and (3) the resulting wage and employment outcomes as influenced by union contracts and implicit employment contracts. Also considered are public policy recommendations concerning minimum wages, job training programs, hazards on the job, race and sex discrimination, and income inequality. Prerequisite: (21-256 or 21-259) and minimum grade of "C" in 73-150.
 

73-347 Game Theory for Economists
An introduction to the theory of non-cooperative games with an emphasis on economic applications. After an initial examination of two-person, zero-sum games, the notion of a Nash equilibrium in an n-person, non-cooperative game is considered. Existence of and refinements to the equilibrium concept are discussed in the context of both normal and extensive form games. Economic applications may include various topics, including Cournot and Bertrand oligopoly models, general competitive exchange equilibrium, and free rider problems. Prerequisites: (21-122 and (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-251).
 

73-351 Public Finance
Fall or Spring. This course examines problems created by market failure and analyzes the incentives and institutions, which can be used to alleviate these problems. We will consider applications such as education, environmental issues, defense, crime, and common resources. The common thread in these situations is that individual optimizing behavior does not necessary lead to an outcome, which is optimal for the society. We will evaluate possible solutions involving private, informal mechanisms as well as those requiring public sector interventions. Prerequisite: (21-256 or 21-259) and minimum grade of "C" in 73-150.
 

73-352 Public Economics
Fall or Spring. In this course, students analyze the role of governments in market economies and their impact on the behavior and welfare of citizens. Reasons for government intervention in markets are examined in light of some of the economic challenges faced by modern societies in an increasingly globalized marketplace. Topics include: taxation and expenditure policies, externalities and market failure, social security, public assistance and income redistribution programs. There will also be some coverage of the role of local governments in the economy with respect to such issues as crime, urban development and education. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-200) and (minimum grade of "C" in 73-251 or 73-252).
 

73-357 Regulation: Theory and Policy
Government regulations touch almost every aspect of our lives – from our healthcare and work environments, right down to the food we eat and the air we breathe.. Using an analytical framework that encompasses economic, political, and bureaucratic forces that create and shape them, this course explores the origins, goals, and implementation of many major regulations. Areas of regulation specifically examined might include air pollution, auto safety (air bags), food additives, technological risk (nuclear reactors), occupational safety (asbestos, cotton dust), hospitals, airlines and trucking, and consumer protection (truth in advertising). Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in (73-251 or 73-252)).
 

73-358 Economics of the Environment and Natural Resources
Fall or Spring. A advanced course on the allocation of environmental and natural resources. Topics include: externalities and the misallocation of resources, examining the efficiency/inefficiency of markets for non-renewable resources, intended and unintended consequences of regulatory and tax policies, and modern alternative to regulation – such as the creation of new markets and property rights for environmental resources. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-251).
 

73-359 Benefit-Cost Analysis
Fall or Spring. The evaluation of public private sector projects. The theory of benefit-cost analysis and related techniques, such as cost-effectiveness analysis. Attention is given to such issues as valuing goods and services that are not normally traded in the marketplace (e.g., the value of an individual’s life) and the social rate of discount. Applications are considered in detail. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150).
 

73-365 Industrial Organization
Fall or Spring. This course is concerned with the economic analysis of industrial markets that are not perfectly competitive. The effects of imperfect competition on firms’ decisions (pricing, location, advertising, research and development, among others) are reviewed. Implications of these effects in terms of public policy are also discussed from a variety of perspectives. Finally, applications to actual markets are considered. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150).
 

73-371 International Trade and Economic Development
This course examines the economic rationale for trade among nations and its consequences for global economic development. Topics include: comparative advantages among nations, the free trade versus protectionism debate, and the effects of special trade agreements, free trade zones, and transnational economic unions. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-200) and (minimum grade of "C" in 73-150 or 73-251).
 

73-372 International Money and Finance
Fall or Spring. The course concerns itself with the determination of real, monetary, and financial aggregates and the policies that influence them in an international context. Topics include: monetary policy and its effects on employment and inflation, the role of the banking system in the transmission of monetary policy, credit markets, banks as financial intermediaries, and the effect of domestic policies on international trade and financial markets. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-251) and (minimum grade of "C" in 73-200).
 

73-390 Behavior in Games, Auctions, and Market
This course examines models describing economic/strategic behavior in environments where the usual “perfectly rational agents” paradigm does not capture observed phenomena. Topics include: decisions and the endowment effect, heuristics and biases in decision making, overconfidence and under-confidence effects, myopia and under-saving, public goods games, learning and reputation in repeated games, fairness and reciprocity in labor markets, asset markets and the bubble mystery, the winner’s curse in auctions, and optimal contract design. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-251 or 73-252.)
 

73-392 Financial Economics
Fall or Spring. A rigorous quantitative course covering the economic fundamentals of financial markets. The course covers individual decision making about saving and investment under uncertainty, and the equilibrium determination of asset prices for both complete- and incomplete-market settings. In addition, the course will cover topics in corporate financial decision making and the micro-structure of financial markets. Prerequisites: 21-122 and (21-256 or 21-259)and (minimum grade of "C" in 73-226) and (minimum grade of "C" in 73-150 or 73-251).
 

73-395 Independent Study in Economics
The Independent Study course in economics allows the student to pursue his or her own research interests in any of a variety of topics in economics. A typical independent study course involves a semester long project under the supervision of an appropriate faculty advisor. The nature and scope of the project are determined by the student and faculty advisor. Prerequisites: (21-256 or 21-259) and minimum grade of "C" in 73-150.
 

73-410 The Economics of Business Cycles
The purpose of this course is to educate the student in modern business cycle theory. The first part of the course surveys the empirical regularities, which comprise fluctuations in aggregate economic activity, which economists have labeled business cycles. The second part of the course discusses the existing macroeconomic models, which students have learned in intermediate macroeconomics, while the third part of the course examines the policy implications of these models and the inadequacies of the models as economic explanations of cycles. The final part of the course discusses rational expectations models of the business cycle in considerable detail. The empirical implications of these new models are examined, and their policy implications are assessed. Prerequisites: (minimum grades of "C" in 73-226 and 73-253.)
 

73-420 Monetary Theory and Policy
This course is concerned with various topics in monetary and macroeconomics including anticipated inflation, hyperinflation, output effects of monetary policies, alternative techniques of monetary policy implementation, and the interaction of monetary and fiscal policy strategies. Analysis of these issues is conducted by means of simple by explicit dynamic models incorporating rational expectations. In addition, attention is devoted to alternative types of monetary systems – commodity vs. paper money, for example. This segment of the course includes some consideration of issues relating to a technologically advanced society in which transactions are carried out by means of a computerized economy-wide bookkeeping system, rather than by money. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-200) and (minimum grade of "C" in 73-251 or 73-252).
 

73-422 Real Estate Economics and Finance
The principle objective of this course is to analyze the financial characteristics of real assets and their derivative products, as well as to provide an introduction to their associated institutions. Topics include: residential real estate markets, urban land markets, analysis of mortgages and mortgage markets, commercial property markets, financial valuation of real assets, influence of debt financing on risk and returns, innovations in real estate capital markets, and analysis of asset allocation decisions. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-251.)
 

73-426 Advanced Quantitative Economic Analysis
This course builds on the concepts developed in 73-226 and 73-261 and provides an introduction to advanced economic analysis at the undergraduate level. The main objectives of the course are: to provide a solid core of analytical and conceptual tools that students can use directly in their research; to give students an understanding of both the classic theory and some of the recent advances; to enable students to perform analysis by structuring the problem as a formal model and performing analysis of which yields useful predictions and insights. (Lecture, 3 hours) Course will be first offered in Fall 2009. Prerequisites: (21-256 or 21-259) and (minimum grades of "C" in 73-226 and 73-261) and (minimum grade of "C" in 73-251 or 73-252).
 

73-428 Markets for Energy
This course offers students a broad survey of the oil, natural gas, and electric-power industries, with a particular focus on their transformation from vertically-integrated, regulated entities to organizations participating in open markets and on the role of new technologies which enabled these changes. Topics include: economics of resource extraction, volatility in futures markets for oil and natural gas, the rise and fall of OPEC, power systems engineering and economics, and wholesale markets for electric power. Prerequisites: (21-256 or 21-259) and (minimum grade of "C" in 73-150 or 73-251) and (minimum grade of "C" in 73-226).
 

73-432 Economics of Education
In this course we examine economic issues related to education, particularly at the elementary and secondary level. In exploring why we care about education, we examine the private returns to education (those that accrue to the individual) and the social returns (those that accrue to society), and how social returns provide one rationalization for government’s involvement in education. After an overview of basic facts related to the provision of elementary and secondary education in the United States, we turn to the issue of how education is produced. We study the role of financial resources, teachers and peers in the production process, and examine evidence on the effectiveness of public vs. private schools. In the face of evidence that public schools in the United States do not fare well in international comparisons, one response has been to give parents greater choice of schools for their children. This leads us to study the most prevalent school choice mechanism (choosing where to live), as well as charter schools and private school vouchers. Another response has been the movement to hold public schools accountable, of which the No Child Left Behind legislation is an example. Thus, we examine issues on accountability theory and practice. The concern remains, however, that even if elementary and secondary education were significantly improved through various mechanisms, the cognitive ability of some children would already lag behind by the time they start school due to their early childhood experiences. In this spirit we analyze evidence on early childhood interventions for disadvantaged children. Building on our understanding of educational outcomes through high school, we finalize with an overview of the market for higher education, with an emphasis on college pricing and admission decisions. Throughout we use microeconomic analytical tools, and we examine empirical evidence that applies econometric techniques. Prerequisites: (21-256 or 21-259) and (minimum grades of "C" in 73-150 and 73-226).
 

73-435 Economics of Negotiations
The objective of this course is to understand the influence of economic factors upon both the conduct of involved parties and upon their anticipated outcomes. Insights gained from economic analysis are used to help find profitable negotiation strategies and to help evaluate opportunities which depend upon a negotiated outcome. Topics include: the creation and allocation of economic value; the negotiator’s fundamental decision problem; the tension between creating and claiming value; strategies for better agreements; the role of coalitions in multi-party negotiations; negotiations within and between organizations. Considerable emphasis will be placed on negotiation exercises, role playing, and on student discussion and analysis of actual current and past negotiation situations. Prerequisites: (minimum grades of "C" in 73-150 and 73-226).
 

73-440 Auctions and Markets
Fall or Spring. This course investigates auctions and markets. Part analytical, part experimental, and partly data driven, it shows how the outcomes of different auction and trading mechanisms depend on the characteristics of the bidders and traders, the bidding or trading rules, and the information that the traders have. The course makes extensive use of Comlabgames to simulate the various types of auctions and markets we analyze. It is divided into four roughly equal parts. Part 1 is an introduction to limit order markets, and a detailed study of auctions, arguably the simplest market form. Part 2 extends our analysis of auction to monopoly, which differs from the simplest auctions because multiple units are sold and the monopolist can restrict sales. In he third part we investigate the effects of adding sellers and buyers to both sides of the market. Finally we extend our analysis to multi-market settings, such as stock exchanges, and use the concept of competitive equilibrium to predict behavior in limit order markets. Prerequisite: (21-256 or 21-259) and minimum grade of "C" in 73-150.
 

73-458 Money, Banking and Financial Markets
Fall or Spring. This course will help the student to understand the interaction of real, monetary, and financial macroeconomic variables and the policies that influence them. In the first half of the course we study the joint determination of aggregate output and the real interest rate in a modern model of monetary policy. We see how interest rate policy offsets fluctuations in employment and inflation that otherwise would arise due to macroeconomic shocks. And we see why inflation targeting is welfare-maximizing monetary policy. We describe how the Federal Reserve thinks about interest rate policy in practice with reference to the policy record from the late 1970s to the present covering: the “inflation scare” problem, the Volcker disinflation, the Greenspan era, and the case for inflation targeting in the US. The second half of the course shifts the focus to money, credit, and banking. We address money as the medium of exchange, credit in the exchange process, and the role of banks in the payments system. We study the role that the banking system plays in money stock determination and in the transmission of monetary policy. We then cover the motivation for borrowing and lending in credit markets, the two-country model of international finance, the cost of external finance, and the role of banks as financial intermediaries. We discuss banking and financial market distress with reference to recent events. Finally, we distinguish between banking and monetary policies, and assess the power of such policies, including “last resort lending,” to act against financial fragility. Prerequisites: (21-256 or 21-259) and minimum grades of "C" in 73-150 and 73-200).
 

73-469 Global Electronic Markets: Economics and the Internet
Fall or Spring. The information revolution brought about by the Internet is having a dramatic impact on the organization of economic activity. Long-term contractual relationships that once governed corporate procurement are being dismantled as manufacturers use the Internet to market directly to the public. New transportation networks that used to simply move goods from point A to point B are evolving into dynamic inventory pipelines that allow manufacturers to track and even reroute shipments in real time. At the same time, individuals are making use of sophisticated search engines to comparison shop at a scale that would have been physically exhausting even five years ago. In the Economics of E-commerce, we will use the basic tools of economic analysis to understand how and why the changes in information technology are reshaping the economic landscape. Prerequisite: (21-256 or 21-259) and (minimum grade of "C" in 73-251 or 73-252.)
 

73-474 The Economics of Ideas: Growth, Innovation and Intellectual Property
Healthy economies in many way resemble healthy people – they are alive and vibrant, growing and adjusting in response to changing circumstances – and what fuels economic growth and innovation are ideas. This course explores the role of ideas in the modern economy. Topics include: models of economic growth, economic efficiency and development, innovation and human capital, intellectual property and public policy issues. Prerequisite: (21-256 or 21-259) and (minimum grade of "C" in 73-251 or 73-252.)
 

73-476 American Economic History
The study of economic history provides important perspective on current economic institutions and policies. A failure to understand the historical evolution of economic institutions or the variety of past economic experience is perhaps the worst shortcoming of many economists. The study of economic history provides an opportunity to test currently fashionable theories against data different from those used in their construction. In fact, this is a course in applied economics. The theories developed in the intermediate courses will be applied to episodes from the past in ways that increase understanding both of the specific historical episodes considered and the economic theories employed. Prerequisites: (21-256 or 21-259) and (minimum grades of "C" in 73-150 and 73-200) and (70-208 or minimum grade of "C" in 73-226).
 

73-495 Advanced Independent Study in Economics
The Independent Study course in economics allows the student to pursue his or her own research interests in any of a variety of topics in economics. A typical independent study course involves a semester long project under the supervision of an appropriate faculty advisor. The nature and scope of the project are determined by the student and faculty advisor. Prerequisites: 21-122 and (21-256 or 21-259) and (minimum grade of "C" in 73-251 or 73-252).
 

73-497 Senior Project
Fall: 9 units. A fourth-year project course, open only to Economics primary and additional majors with Senior standing. Prerequisites: (minimum grades of "C" in 73-200 and 73-226) and (minimum grade of "C" in 73-251 or 73-252).
 

73-500 Tepper College Honors Thesis I
Economics majors with outstanding academic records and intellectual promise will be given the opportunity to undertake original research under the direction of individual faculty members. Research topics are selected by students and approved by faculty. Prerequisites: Senior standing in the Economics Program and permission of the Economics faculty.
 

73-501 Tepper College Honors Thesis II
Economics majors with outstanding academic records and intellectual promise will be given the opportunity to undertake original research under the direction of individual faculty members. Research topics are selected by students and approved by faculty. Prerequisites: Senior standing in the Economics Program and permission of the Economics faculty.