Note: courses with light gray backgrounds are not offered this academic year.

ECON 110(F, S)Principles of Microeconomics

This course is an introduction to the study of the forces of supply and demand that determine prices and the allocation of resources in markets for goods and services, markets for labor, and markets for natural resources. The focus is on how and why markets work, why they may fail to work, and the policy implications of both their successes and failures. The course focuses on developing the basic tools of microeconomic analysis and then applying those tools to topics of popular or policy interest such as minimum wage legislation, pollution control, competition policy, international trade policy, discrimination, tax policy, and the role of government in a market economy. [ more ]

ECON 111Introduction to Economics and Its Applications

Last offered Fall 2010

This course is intended for students who do not wish to major in economics but who would like to learn something about the discipline and to develop a greater understanding of the ways in which economics can be used to explain behavior and to inform policy. Our focus will be on providing some very basic tools of economic analysis and important institutional background regarding the US and international economies, and then using those tools and institutional knowledge to analyze current policy issues. [ more ]

ECON 120(F, S)Principles of Macroeconomics

This course provides an introduction to the study of the aggregate national economy. It develops the basic theories of macroeconomics and applies them to topics of current interest. Issues to be explored include: the causes of inflation, unemployment, recessions, and depressions; the role of government fiscal and monetary policy in stabilizing the economy; the determinants of long-run economic growth; the long- and short-run effects of taxes, budget deficits, and other government policies on the national economy; the role of financial frictions in amplifying recessions; and the workings of exchange rates and international finance. [ more ]

ECON 203Gender and Economics

Last offered Spring 2018

This course uses economic analysis to explore how gender differences can lead to differences in economic outcomes, in both households and the labor market. Questions to be covered include: How does the family function as an economic unit? How do individuals allocate time between the labor market and the household? How have changes in family structure affected women's employment, and vice-versa? What are possible explanations for gender differences in labor force participation, occupational choice, and earnings? What is the role of government in addressing gender issues in the home and the workplace? How successful are government policies that primarily affect women (e.g., comparable worth policies, AFDC/TANF, subsidization of child care)? The course will focus on the current experience of women in the United States, but will place these gender differences in a historical and cross-cultural context. [ more ]

ECON 204(S)Economics of Developing Countries

The leaders of poor countries almost universally proclaim "economic development" to be their eventual destination, but it is not easy to visualize the journey. Is rapid economic growth sufficient to generate development, or do governments need to pro-actively invest in health and education? Can agriculture support incomes and provide jobs, or is urban industrial development a prerequisite? How do households in poor countries insure themselves against adverse outcomes? Can policies enable entrepreneurship and innovation in such economies? Is it true that corruption is major obstacle? Has the climate crisis upended our traditional models to the point where we need to rethink the notion of development? The class will introduce these and other issues, as analyzed by economists. [ more ]

ECON 205(F)Public Economics

This course examines the role of the government in a market economy. Three broad issues are considered: under what conditions is government intervention in the economy appropriate? When merited what is the most effective form of intervention? What effects do government policies have on incentives and behavior?After examining these questions from a theoretical perspective, the course will turn to analysis of particular government spending programs in the United States including Social Security, various types of publicly-provided insurance, spending on education, and public assistance for the poor. Finally we will study how the government raises revenue through taxation. We will discuss the principles that guide tax design and consider the effects of the tax code on behavior. [ more ]

ECON 209Labor Economics and Policy

Last offered Spring 2018

Employment--finding it (or looking for but not finding it), its compensation, and the conditions under which it occurs--is a key concern for most residents of advanced economies throughout their adult lives. Work is the main source of income for the vast majority of working-age adults in these economies, and work-related issues and policies reliably top national policy agendas. Labor economics is the study of these issues--how the level and distribution of skills, wages, employment, and income are determined in the market for labor and how various policies affect this market and its outcomes. In this course we will apply the tools of microeconomics to analyze labor force participation, the allocation of time to market work, migration, labor demand, investment in human capital (education and on-the-job training), discrimination, unions and unemployment. We will also examine the impact of government programs and mandates such as employment-based tax credits, unemployment insurance, antipoverty programs, and minimum wages on the labor market. We will devote particular attention to topics of current U.S. policy interest, including immigration, income inequality, and education. [ more ]

Taught by: TBA

Catalog details

ECON 211Gender in the Global Economy

Last offered Fall 2011

This course will present a feminist economic analysis of the global economy, and some of the urgent issues facing women in poor countries. The course will start by developing theoretical resources: these will include feminist critiques of economics theory, work on care labor and the shifting boundaries between markets, governments and households, theories of household bargaining, and discussions of intersectionality and difference. Then we will discuss a series of interlinked issues which may include the contradictory effects of structural adjustment and its successors; the informal sector and the 'invisible assembly line'; the economics of sex work and global sex trafficking; microcredit; the economics of the HIV/AIDS pandemic. We will finish by looking at community-based activism, non-governmental organizations, and the possibilities for first-world/third-world alliances. [ more ]

ECON 212Markets And Morals

Last offered Fall 2018

What are the moral foundations necessary to support a free market economy? Does capitalism need a moral base--and if so, does the operation of a market economy erode the moral and ethical foundations on which it rests? We read Adam Smith, Mill, Keynes, Galbraith and other neoclassical philosophers writing about the social fabric that holds an atomistic free market political economy together, with particular emphasis on Smith's "other book"--Theory of Moral Sentiments--as an argument for limits to self-interested behavior inherent in human nature. (What is the sound of one Invisible Hand clapping?) We test our own articulated moral and political values against the existing political economy of Western democracies with help from more contemporary authors like Amartya Sen, Kenneth Boulding and Robert Kuttner. We will examine in depth the market for carbon offsets as a case study for the evaluation of the ethical validity of market-based solutions to climate problems. Students will write final papers on how well selected aspects of free market economies (organization of production, distribution of resources, mechanisms of inheritance, taxation) measure up to their own stated sense of justice--and how we might reform or perfect markets to align better with our morals. [ more ]

ECON 213(S)Introduction to Environmental and Natural Resource Economics

We'll use economics to learn why we harm the environment and overuse natural resources, and what we can do about it. We'll talk about whether and how we can put a dollar value on nature and ecosystem services. We'll study cost benefit analysis, pollution in general, climate change, natural resources (like fisheries, forests, and fossil fuels), and energy. We will take an economic approach to global sustainability, and study the relationship between the environment and economic growth and trade. [ more ]

ECON 214 T(S)The Economics and Ethics of CO2 Offsets

Some electric utilities and other CO2 emission polluters are allowed to purchase carbon offsets to achieve a portion of their mandated emissions cuts, in effect, to pay others to reduce carbon emissions in their stead. Some individuals, college and universities, and for-profit and non-profit institutions have chosen voluntarily to purchase carbon offsets as a way of reducing their carbon footprint. But do offsets actually succeed in reducing carbon emissions? What separates a legitimate offset from one that is not? How should we measure the true impact of an offset? How do carbon offsets compare to other policies for reducing carbon emissions in terms of efficiency, equity, and justice? Is there something inherently wrong about "commodifying" the atmosphere? Is there something inherently wrong about selling or buying the right to pollute? Should colleges and universities be using the purchase of offsets to achieve "carbon neutrality?" [ more ]

ECON 215Globalization

Last offered Spring 2019

This course will examine the causes and consequences of globalization. This includes studying topics such as trade, immigration, foreign direct investment, and offshoring. The impact of these forms of globalization on welfare, wages, employment, and inequality will be a focal point. Throughout we will rely on economic principles, models, and empirical tools to explain and examine these contentious issues. [ more ]

ECON 219 TGlobal Economic History

Last offered Fall 2016

Why did Western Europe--and not China, India, or the Middle East--first experience the Industrial Revolution? Why did Latin America fall behind in the 20th century, while Japan and eventually China boomed? What explains the historical success of the US economy? And why has African economic growth been relatively slow for so long? These and other questions will guide our exploration of global economic development over the past several millennia. We will draw on micro and macroeconomic theory to help explain and interpret the historical roots of the modern global economy. Our focus will be broadly comparative across space and time, with an emphasis on how institutions, resource endowments, culture, technology, and market developments help explain economic differences and change around the world. Throughout the course, we will draw on micro and macroeconomic theories and concepts to help explain and interpret the historical roots of modern global economy. [ more ]

ECON 220American Economic History

Last offered Spring 2016

This course examines the growth and development of the American economy from the colonial era to the modern period. The emphasis will be on the use of economic theory and quantitative evidence to explore key questions and themes in U.S. history. Topics may include some or all of the following: the development of colonial markets, the economic origins of the U.S. Constitution, immigration, agricultural innovation, industrialization, slavery, government regulation and policymaking, the Great Depression, the changing roles of women in the U.S. economy, post-World War II growth, the construction of the social safety net, and the place of the United States in the modern global economy. Comparisons will be made to European and non-European experiences when appropriate. [ more ]

ECON 222Economics of the Arts and Culture

Last offered Spring 2015

What economic forces influence the creation, presentation, preservation and ownership of art and culture? Should support for the arts be provided through private patronage, private philanthropy, or public sector support? How does the mechanism of support for art affect the productivity and creativity of the artist? Does art make a good investment for an individual? How do art markets function and what determines the price of art? Why do some art museums and performing arts organizations require donations and public support and operate as non-profit enterprises, while other types of culture production and preservation operate as for-profit enterprise? What are the impacts on economic vitality and local economic development of cultural and arts organizations? When these impacts arise, how can (or should) they be used for public policy? This course will use the tools of economic analysis to present a framework for discussion and analysis of these and related questions. [ more ]

ECON 225 TGlobal Financial Crisis and African Economic Development

Last offered Spring 2011

Will the global financial crunch create a development crisis for Africa? Just two years ago the International Monetary Fund published the most optimistic growth projections for Africa in decades, predicting rapid growth driven by higher commodity prices, stronger agricultural output and the dividends of years of difficult economic reforms. Today, economic analysts are downgrading African growth forecasts in the face of growing poverty and macroeconomic challenges. Food prices have more than doubled in some countries--increasing hunger for the most vulnerable groups. Fuel costs--and subsidy policies in some countries--are creating macroeconomic imbalances, and the global financial crisis is depressing demand for Africa's exports. Private capital flows, which reached record levels until 2007, are expected to decline by $300-400 billion over the next two years, with bank lending falling, portfolio investment declining, and foreign direct investment decreasing. This triple-F crisis--food, fuel and financial--is posing renewed challenges to African leaders trying to tackle the imperatives of economic development and pro-poor and inclusive economic growth. This crisis is raising the costs of reforms in countries reliant on exports and international capital for growth. Successful strategies must combine policies more efficiently than ever--to balance the necessary reforms with initiatives that offset the costs for the most vulnerable. This tutorial will analyze critical questions posed by the emerging crisis: Which countries will be hit the hardest, and how deeply and for how long? Through which channels does the contagion afflict national economies? And perhaps most importantly, what coordinated strategies can African nations develop in order to foster effective responses? This tutorial will explore how policy-makers in Africa are working to build successful inclusive growth strategies, with fiscal, monetary, industrial, trade and labor market policies reinforcing each other rather than working at cross purposes. [ more ]

ECON 227(F)Acquiring Art: Selecting and Purchasing Objects For WCMA

How do museums acquire art? Factors considered in selecting objects include: the museum's existing collection, its mission, the availability of suitable objects, evaluation of the art historical importance of potential purchases, and the available budget. How can objects be identified and obtained at the most reasonable cost? How do auctions work and what strategies are best for purchasing works at auction? Is it more economical to purchase art at auction or to work with dealers or (for contemporary works) directly with artists? Do museums consider value in the same way as private collectors? What role does an object's history and condition play in the evaluation process? In this course students will work as teams to identify and propose objects for addition to the collection of the Williams College Museum of Art (WCMA). A significant budget will be made available for the acquisition. We will discuss approaches for identification, acquisition and evaluation of objects. Student teams will be responsible for identifying a set of objects that would make appropriate additions to the WCMA collection, and a strategy for acquiring one or more of those objects. Working with the advice of WCMA curatorial staff, one or more of these objects will be acquired using the agreed strategy, and the object will become part of the WCMA permanent collection. Graduate students will participate in all aspects of the class but may be required to undertake different assignments. [ more ]

ECON 228 TWater as a Scarce Resource

Last offered Fall 2017

For a variety of reasons including environmental pollution, urbanization, changing agricultural techniques, resource mismanagement, and the consequences of climate change, water is becoming a scarce resource even in places where it was relatively plentiful in the past, and it is likely to become an increasingly scarce resource over the coming decades. In this course we will use basic economic models to consider policy issues relating to water: Is access to water a basic human right, and if so, what market and non-market mechanisms should play a role in water allocation? Does public ownership of water improve the way it is provided and used? Why do societies differ in their approaches to allocating water and are some systems better than others? What does it mean to have a property right to water? Could private property rights to water help address the water pollution problem? How can societies change their water-related property rights, regulations and social institutions when individuals have implicit or explicit rights to the institutional status quo? Who has the right to water that crosses international boundaries? How should societies allocate water across generations? [ more ]

ECON 229Law and Economics

Last offered Spring 2019

This course applies the tools of microeconomic analysis to private (i.e., civil) law. This analysis has both positive and normative aspects. The positive aspects deal with how individuals respond to the incentives created by the legal system. Examples include: how intellectual property law encourages the creation of knowledge while simultaneously restricting the dissemination of intellectual property; how tort law motivates doctors to avoid malpractice suits; and how contract law facilitates agreements. The normative aspects of the analysis ask whether legal rules enhance economic efficiency (or, more broadly, social welfare). Examples include: what legal rules are most appropriate for mitigating pollution, ensuring safe driving, and guaranteeing workplace safety? The course will also cover the economics of legal systems; for example, what are the incentives for plaintiffs to initiate lawsuits and what role do lawyers play in determining outcomes. The course will also consider potential reforms of the legal system. [ more ]

ECON 230The Economics of Health and Health Care

Last offered Spring 2015

In recent years, the intersection between health and economics has increased in importance. The costs of health care have been rising, although more slowly in the past few years. A substantial fraction of the United States population lacks health insurance, with the implementation of the Affordable Care Act intended to remedy that problem. In the United States and around the world the rising elderly population is putting increasing pressure on health spending. Globally, the HIV/AIDS pandemic is causing severe economic hardship, and many people lack access to basic health care. More positively, advances in health care have widened the scope of possible treatments. Given the importance of good health for individual well-being, it is not surprising that health, health care and how to pay for it are sources of anxiety for individuals and policymakers worldwide. In this course we will analyze the economics of health by applying standard microeconomic techniques to the problems of health and health care markets. The course focuses on three broad issues: the inputs to health and the demand for health care, the structure and consequences of public and private health insurance, and the supply of health care. Special attention will be devoted to topics of current public policy, including the problems of rising costs and cost containment, health insurance reform, the changing nature of healthcare provision, changing public policies in the Medicare and Medicaid programs, hospital competition, and the determinants and consequences of technological change in medicine. [ more ]

ECON 232Financial Markets, Institutions and Policies

Last offered Fall 2017

This course first explores the role of the financial system and financial markets, and how they interact with the economy. What does finance do? How are asset prices determined, and how are these prices related to interest rates? Are financial markets efficient, and what are the implications of their efficiency or lack thereof? How does the financial system help with the management of risks faced by society? Second, it analyzes the role of the central bank and the conduct of monetary policy. How do central banks set monetary policy and how do those policies affect the economy? How does monetary policy change when interest rates are (virtually) zero? Third, it studies the complexities associated with managing and regulating modern financial instruments and markets. Why are financial crises so common, and why has regulation not succeeded in preventing them? [ more ]

ECON 233(F)Behavioral Economics and Public Policy

In many ways, the fields of psychology and economics both study the same phenomena: the incentives that influence our decision-making across different contexts. This course provides a survey of the ways in which these two fields intersect, i.e. behavioral economics. Topics include how individual responses to economic incentives can be influenced by heuristics, framing, social norms, and other cognitive or social incentives. Concurrently, the course will review how these concepts can be (or are already being) applied to firm strategy, development, and public policy contexts. These include the role of behavioral economics in programs geared towards reducing poverty, increasing environmental conservation, and encouraging education investment, among others. The course will also discuss whether and how we ought to judge which behaviors are socially desirable and worth encouraging through policy. [ more ]

ECON 235Urban Centers and Urban Systems

Last offered Spring 2001

Cities, systems of cities, and the interactions between cities are the outcome of human decisions and reflect their social structure and desire for interaction. The form of these urban areas is determined by the choices made by the people who reside in, work in, and travel between cities. Economic forces influence and constrain these choices, and economic models of decision-making can help us to explain and predict the patterns that result. These models help us to comprehend the structure of urban areas. This course will introduce the ideas and some of the analytic tools that assist in understanding the economic foundations of urban centers and urban systems. Topics addressed in the course will include the determinants of land use, location of firms, choice of transportation mode, flows of capital investment into real estate, housing prices and housing availability and regulation of housing markets, movement of population from one city to another, and public policies designed to deal with urban problems. [ more ]

ECON 238(F)Sustainable Economic Growth

Is it possible to have infinite economic growth on a finite planet? This question has sparked a great deal of inquiry across the social sciences. Some argue that we need to slow or even end economic growth to prevent environmental catastrophe. Others argue that market forces, especially changing prices and improved technology, will ensure that growth can continue unabated without significant negative consequences. Still others argue that government intervention is necessary to limit negative consequences of economic progress, but that effective interventions are still compatible with sustained economic growth. In this class, we will explore the insights that economics has to offer on this important question. We will start by considering the importance of finite inputs used in production, including fossil fuels, minerals, land, water and food, among others. Then, we will consider whether undesirable byproducts of economic growth will prevent sustained growth. This second part of class will place a lot of emphasis on climate change, but we will also discuss other forms of environmental degradation. Throughout the class, we will pay special attention to the role that government intervention can or cannot play in promoting sustainable economic growth. This class will reinforce core economic concepts taught in introductory microeconomics and introductory macroeconomics. [ more ]

ECON 240 TColonialism and Underdevelopment in South Asia

Last offered Fall 2018

British colonial rule in South Asia shaped economy and society in fundamental ways. As resistance to colonial rule emerged in the late nineteenth century, "nationalist" writers developed a critique of its economic impact via taxation, fiscal policy, trade, and many other policies. In their turn, supporters of British rule, "apologists," argued that British rule had laid the foundations of economic growth by securing property rights, enforcing contracts, and developing infrastructure. The debate between "nationalists" and "apologists" has never quite ended, but after the recent growth of the Indian economy it has lost some of its emotional charge. We will use this opportunity to revisit the controversy. [ more ]

ECON 242Evaluating the Costs and Benefits of Public Policies

Last offered Fall 2017

How do we determine whether introducing a new vaccine is cost-effective and worth the investment costs or whether a policy to protect a wetland is worth the sacrifice? Is it possible to assess the economic consequences in terms of benefits and costs of new healthcare regulations? Economists typically use the tools of applied cost-benefit (CBA) and cost-effectiveness analysis (CEA) in order to address such policy questions. The goal of applied economic evaluations is to identify, measure, and value all relevant costs and benefits of new public policy investments and regulations. This course covers both theory and practice of economic appraisal of a public policy (an investment project, regulation, a specific treatment etc.), with an emphasis on health care and public health applications. The CBA and CEA methods covered in the class are widely used in many other policy areas as well, including public transportation, infrastructure investment and environmental policy. [ more ]

ECON 251(F, S)Price and Allocation Theory

A study of the determination of relative prices and their importance in shaping the allocation of resources and the distribution of income. Subjects include: behavior of households in a variety of settings, such as buying goods and services, saving, and labor supply; behavior of firms in various kinds of markets; results of competitive and noncompetitive markets in goods, labor, land, and capital; market failure; government policies as sources of and responses to market failure; welfare criteria; limitations of mainstream analysis. [ more ]

ECON 252(F, S)Macroeconomics

A study of aggregate economic activity: output, employment, inflation, and interest rates. The class will develop a theoretical framework for analyzing economic growth and business cycles. The theory will be used to evaluate policies designed to promote growth and stability, and to understand economic developments in the U.S. and abroad. Instructors may use elementary calculus in assigned readings, exams and lectures. [ more ]

ECON 255(F, S)Econometrics

An introduction to the theory and practice of applied quantitative economic analysis. This course familiarizes students with the strengths and weaknesses of the basic empirical methods used by economists to evaluate economic theory against economic data. Emphasizes both the statistical foundations of regression techniques and the practical application of those techniques in empirical research. Computer exercises will provide experience in using the empirical methods, but no previous computer experience is expected. Highly recommended for students considering graduate training in economics or public policy. [ more ]

ECON 257(S)The Economics of Race

This course will examine the causes and consequences of racial disparities in economic outcomes. Specific topics will include the economic history of slavery, Reconstruction and the Civil Rights Movement; racial gaps in earnings, wealth, educational attainment, standardized test scores, and health outcomes; formal models of taste-based and statistical discrimination; and the structure and efficacy of government anti-discrimination policies. Much of the course will focus on racial discrimination faced by African Americans specifically, but there will also be coverage of other racial and ethnic minority groups. The course will additionally focus almost exclusively on the US, although many of the theories and techniques we will develop are applicable to other contexts as well. The course will utilize basic microeconomic tools, such as straightforward extensions of the supply and demand model, and ECON 110 is a prerequisite. We will also make extensive use of descriptive statistics, and an introductory statistics course such as STAT 101 will be useful, but is not required. [ more ]

ECON 299(F)Economic Liberalism and Its Critics

Economic liberalism holds that society is better off if people enjoy economic freedom. Its critics point to what they believe this position ignores or what it wrongly assumes, and hence, how it would make bad policy. This course explores the relationship between politics and economics by surveying influential works of political economy. Its first part examines major thinkers in relation to the historical development of capitalism in Western Europe and the United States: the classical liberalism of Adam Smith, Karl Marx's revolutionary socialism, and the reformist ideas of John Maynard Keynes. The second part considers mid-20th-century writers who revise and critique economic liberalism from a variety of perspectives, including Friedrich Hayek, Milton Friedman, Ronald Coase, Arthur Okun, and Albert O. Hirschman. The third part surveys significant recent contributions relevant to the themes of the course, with applications to current public policy issues, including topics such as: power relations and autonomy in the workplace; asymmetric information and social insurance; economic inequality and distributive justice; equality of opportunity; the economics of health care; positional goods and the moral foundations of capitalism; economic nationalism and new trade theory; behavioral economics; finance and financial crises; and rent-seeking. The combination of the historical focus of the early part of the course with discussion of modern policy issues and debates in the latter part of the course permits you to appreciate the ongoing dialogue between classical and contemporary views of political economy. [ more ]

ECON 545(S)Growth Diagnostics

Evidence from across the developing world suggests that the "binding constraints" to economic growth can be remarkably heterogeneous--i.e., the growth potential of stagnating or underperforming economies may be unlocked in a large variety of ways. For instance, pre-reform China had been constrained by poor supply incentives in agriculture, whereas Brazil has been held back by an inadequate supply of credit, South Africa by poor employment incentives in manufacturing, El Salvador by insufficient production incentives in tradables, Zimbabwe by bad governance, and so forth. How can developing-country policymakers determine country-specific constraints like these, thus enabling them to pragmatically pursue a selected set of growth-promoting policies rather than attempting to implement a "laundry list" of reforms that are naively based on "best practice" rules-of-thumb? This course will serve as a primer on "growth diagnostics," an empirically-driven analytical framework for identifying the most binding constraints to economic growth in a given country at a point in time, thereby allowing policymakers to develop well-targeted reforms for relaxing these constraints while being cognizant of the nation's prevailing economic, political, and social context. The course will first build on the basic theories and empirics of economic growth to elucidate the diagnostic framework and will then employ a wide range of country-specific case studies to demonstrate how the framework can be operationalized for policy making. Throughout the semester, students will be required to work in groups, each representing a given developing or emerging-market economy, in order to build a growth diagnostic for their group's assigned country by the end of the course. [ more ]

ECON 348Economics of Education

Last offered Fall 2018

This course examines education with an emphasis on understanding investments in human capital, the production of education throughout the life cycle, and the impact of policy on education. Topics to be covered range from the influence of early life experiences on later educational outcomes to the role of teachers and other school resources in primary and secondary education to post-secondary schooling decisions. Questions to be addressed may include the following: Do high quality preschool investments like Head Start improve outcomes for the students they serve? Does class size matter? How do we measure teacher quality? Are GEDs really equivalent to high school diplomas? What are the benefits of community college attendance? What factors determine college major choice? Students will become more critical readers of the economics of education literature, gain an understanding of the challenges associated with education policy, and a research an education topic of interest to them. [ more ]

ECON 351Tax Policy

Last offered Fall 2009

The tax system is a major element of public policy. In addition to raising revenue for government expenditure programs, policymakers use the tax system to redistribute resources and to promote a variety of economic policies. For example, the United States tax system has specific rules to encourage savings, education, and investment. Inherently, many tax policy choices involve trade-offs between equity and efficiency. The purpose of this course is to clarify the goals and possibilities of tax policy, mainly through an examination of U.S. federal tax policy (though the search for possible reforms may lead us to examine policies from other countries). The course will examine the choice of the tax base (income or consumption), notations of fairness in taxation (e.g., the rate structure), the choice to tax corporate income separately from personal income, and a variety of specific tax policy issues (e.g., retirement saving, child care, the "marriage" tax, capital gains taxation, and the taxation of housing). [ more ]

ECON 510(S)Financial Development and Regulation

This course focuses on the financial system and its role in economic development. The first part explores the functions of finance, how it contributes to growth and income inequality, examining what can be done to increase financial inclusion. It will examine experiences with financial sector repression and subsequent liberalization, and investigate the causes and impact of financial crises. Then it will study how to make finance effective and how to prevent or minimize crises, analyzing government's role as regulator, supervisor, standard setter, contract enforcer, and owner. In this final part, attention will be devoted to the role of institutions (laws, norms, culture) and incentives in financial sector development. [ more ]

ECON 353Mathematical Economics

Last offered Fall 2017

This course integrates economics at the intermediate level with the tools of mathematics. Topics such as univariate and multivariate calculus will be reviewed or introduced in the context of how these mathematical concepts enhance economic analysis. The combination of economic and mathematical analysis will provide a strong foundation for thesis writing and advanced study of economic theory. [ more ]

ECON 513Empirical Methods in Macroeconomics

Last offered Spring 2018

Macroeconomics and related fields in international finance and macro development have evolved specialized empirical techniques, known generally as macroeconometrics, which are designed to meet the practical challenges that the data and the empirical questions pose in these fields. The course will introduce the theory and application of these techniques, and students will learn how to implement these techniques using real world data to address practical questions drawn from the field of macro development The course is also available to undergraduates with permission of the instructor. However, in lieu of Econ 356, undergraduates with good quantitative skills are encouraged to take Econ 371, which will cover a broader range of topics in greater depth. [ more ]

ECON 357 TThe Economics of Higher Education

Last offered Spring 2019

This tutorial will utilize economic theory and econometric methods to understand a variety of issues pertaining to the economics of colleges and universities. In particular, we'll discuss the logic of non-profit enterprises, the financial structure of a college or university, competition in the market for higher education, policies impacting tuition and financial aid, the individual and societal returns from investments in higher education, and the distinctive features of academic labor markets. Particular attention will be paid to selective liberal arts colleges. [ more ]

ECON 358International Trade

Last offered Spring 2016

This class will examine the causes and consequences of globalization. We will cover the classic models of international trade and discuss the empirical relevance of these theories. Other global forces such as immigration, foreign direct investment, offshoring, trade policies, and trade agreements will also be examined. Throughout the course we will focus on the factors driving globalization as well as the welfare and distributional implications. [ more ]

ECON 515(S)Developing Country Macroeconomics II: Institutions and Policy Regimes

Developing countries must confront a number of macroeconomic challenges that industrialized countries do not have to contend with: exchange rate volatility, large capital flows and commodity price fluctuations, for example. Building on ECON 505, this course examines these issues from both theoretical and empirical standpoints. The focus will be on the design of monetary, fiscal and exchange rate policies and institutions to enhance macroeconomic stability, and create an environment conducive to growth. [ more ]

ECON 360Monetary Economics

Last offered Spring 2019

This course covers a range of theoretical and applied issues bearing on monetary policy as conducted in the U.S. and abroad. Topics to be discussed include: What causes inflation? What are the channels through which monetary policy affects the economy? Why should central banks commit to policy rules? How do exchange rates respond to monetary policy? How did the gold standard work? And will cryptocurrencies replace the dollar? In addition, we will develop and learn how to simulate the "New Keynesian" macroeconomic model, which has become the standard framework for monetary policy analysis for central banks around the world. [ more ]

ECON 362(S)Global Competitive Strategies

This course maintains an IO perspective, acknowledging the centrality of large, multinational firms in determining the pattern and success of a nation's international economic activities (which include, but are not limited to, a wide range of licensing, trade, and diverse configurations of foreign direct investment activities, and their implications for employment, profitability, and social welfare at home and abroad.) In this sense, we depart from international economic approaches that focus foremost on the ways in which a country's factor endowments, domestic market characteristics, and government policies promote or impede such activities, although in our treatment we do not neglect these factors, but treat them as constraints upon, or resources supporting, the optimizing behaviors of large firms. During and following a case-based module in which we learn and simulate the strategic decision processes used by executives of multinationals, we examine the actual trade and investment decisions of those firms, compare them to the predictions of international trade and multinational IO theories, and seek to explain divergences where they are identified. Throughout, competitive strategies of domestic and foreign rivals in markets around the world are explored. As well, the types and efficacy of various government policies in promoting the competitiveness of industries in regional and global markets -- and how they are linked to recent work in growth theory -- are examined. Further, substantial recent shifts in the nature of globalized economic activity, including the changing relative mobility and power of capital and labor, are examined. Finally, welfare propositions and policy ideas for addressing welfare impacts are advanced and discussed. Written cases, class participation, a mid-term exam, and a final paper or exam are expected. [ more ]

ECON 364Theory of Asset Pricing

Last offered Fall 2018

What is the price of time? What is the price of risk? How do markets allocate resources across time and uncertain states of the world? This course theoretically studies how markets allocate scarce resource across time and when outcomes are risky. The "goods" in such markets are called "assets" and the prices of "assets" determine the cost of trading resources across time and across uncertain states of the world. We theoretically investigate how equilibrium determines the price of time, then asset price implications; then asset allocations and prices in the presence of risk; finally, implications for new assets. [ more ]

ECON 516International Trade and Development

Last offered Spring 2019

This course will examine the causes and consequences of globalization and its implications for less-developed countries. We will study the classic models of international trade and discuss the empirical relevance of these theories. In addition, we will focus on other dimensions of globalization that are of particular importance to developing countries such as trade and education, emigration, brain drain, remittances, foreign direct investment, trade policies, infant industry protection, trade and growth, the resource course, and trade agreements. [ more ]

ECON 371(F)Time Series Econometrics and Empirical Methods for Macro

Econometric methods in many fields including macro and monetary economics, finance and international growth and development, as well as numerous fields beyond economics, have evolved a distinct set of techniques which are designed to meet the practical challenges posed by the typical empirical questions and available time series data of these fields. The course will begin with an introductory review of concepts of estimation and inference for large data samples in the context of the challenges of multivariate endogeneous systems, and will then focus on associated methods for analysis of short dynamics such as vector autoregressive techniques and methods for analysis of long run dynamics such as cointegration techniques. Students will be introduced to concepts and techniques analytically, but also by intuition, learning by doing, and by computer simulation and illustration. The course is particularly well suited for economics majors wishing to explore advanced empirical methods, or for statistics, mathematics or computer science majors wishing to learn more about the ways in which the subject of their majors interacts with the fields of economics. The method of evaluation will include a term paper. ECON 252 and either STATS 346 or ECON 255 are formal prerequisites, although for students with exceptionally strong math/stats backgrounds these can be waived subject to instructor permission. Credit may not be earned for both ECON 371 and ECON 356. [ more ]

ECON 521(S)Incentives and Development Policy

Why isn't the whole world developed? This course (and instructor) is of the opinion that the difficulty of getting incentives right is the key source of inefficiency. The course therefore studies how limited enforcement and asymmetric information constrain development, and about innovative development designs that attempt to overcome these constraints. The course readings will be a mix of field studies, empirical evidence and theoretical tools from game theory. Incentive and corruption problems in health, education, the regulation of banks and natural monopolies, privatization, budgeting, debt forgiveness, foreign aid, microfinance, climate treaties and ethnic violence will be studied using a unified framework. Note: this course was developed to address issues that arise in the countries represented at the CDE. [ more ]

ECON 374 TPoverty and Public Policy

Last offered Spring 2017

Since 1965, the annual poverty rate in the United States has hovered between 10% and 15%, though far more than 15% of Americans experience poverty at some point in their lives. In this course, we will study public policies that, explicitly or implicitly, have as a goal improving the well-being of the poor in this country. These policies include safety net programs (Aid to Families with Dependent Children/Temporary Assistance to Needy Families, Supplemental Nutrition Assistance Program/Food Stamps, Medicaid/Children's Health Insurance Program, and housing assistance), education programs (Head Start and public primary and secondary education), and parts of the tax code (the Earned Income Tax Credit). We will explore the design and functioning of these programs, focusing on questions economists typically ask when evaluating public policy: Does the policy achieve its goals? Does the design of the policy lead to unintended effects (either good or bad)? Could it be redesigned to achieve its goals in a more cost-effective manner? Through in-depth study of these programs, students will learn how economists bring theoretical models and empirical evidence to bear on important questions of public policy. [ more ]

ECON 377(F)Inspiration/Perspiration: The Economics of Innovation

From the iron plow, to the steam engine, to modern biotechnology, innovation drives economic growth and raises living standards. Whether we are talking about great inventions or small tweaks, the tools of economics can help us understand how new ideas and technologies emerge, spread, and become obsolete. In this course, we will examine the creation of new knowledge, the translation of ideas and scientific advances into practical applications, and the adoption of new technologies by producers and consumers. We will study the incentives that potential innovators face, how these are affected by patents and other forms of intellectual property rights, how entrepreneurs finance and market their innovations and how different market structures can influence the resulting trajectory of innovation and adoption. We will also discuss how government policies can foster the financing and development of innovation. Throughout the course, we will explore historical and contemporary case studies of the creation, exploitation, and consequences of innovation. [ more ]

ECON 378(F)Long-Run Perspectives on Economic Growth

The world today is marred by vast differences in the standard of living, with about a 30-fold difference in per-capita incomes between the poorest country and the most affluent. What explanations do long-run growth economists have to offer for these differences in levels of prosperity across nations? Are the explanations to be found in underlying differences between countries over the past few decades, the past few centuries, or the past few millennia? If contemporary differences in living standards have "deep" historically-rooted origins, what scope exists for policies to reduce global inequality today? Can we expect global inequality to be reduced gradually over time, through natural processes of economic development, or are they likely to persist unless action is taken to reduce them? This course will present a unified theory of economic growth for thinking about these and related questions. Examples of issues to be covered include: the Neoclassical growth model and its inefficacy for answering questions about development over long time horizons; Malthusian stagnation across societies during the pre-industrial stage of economic development; the importance of the so-called demographic transition and of human capital formation in the course of industrialization; the persistent influence of colonialism, slavery, and ethnic fragmentation in shaping the quality of contemporary politico-economic institutions; and the long-lasting effects of geography on comparative development, through its impact on the emergence of agriculture in early human societies and its influence in shaping the genetic composition of human populations across the globe. [ more ]

ECON 523(S)Program Evaluation for International Development

Development organizations face strict competition for scarce resources. Both public and private organizations are under increasing pressure to use rigorous program evaluation in order to justify funding for their programs and to design more effective programs. This course is an introduction to evaluation methodology and the tools available to development practitioners, drawing on examples from developing countries. It will cover a wide range of evaluation techniques and discuss the advantages and disadvantages of each. The course is a mix of applied econometrics and practical applications covering implementation, analysis, and interpretation. You will learn to be a critical reader of evaluations, and to develop your own plan to evaluate an existing program of your choice. [ more ]

ECON 519Population Economics

Last offered Spring 2018

This course is an introduction to the economic analysis of demographic behavior and the economic consequences of demographic change. An important aim is to familiarize students with historical and contemporary trends in fertility, mortality, migration, and family composition, and the implications of these trends for the economy. The course demonstrates the application of microeconomic theory to demographic behavior, including fertility, marriage, and migration. Students are introduced to basic techniques of demographic measurement and mathematical demography. Selected topics include the economic consequences of population growth in developing countries, the economics of fertility and female labor force participation, the effects of an older age structure on the social security system, and the relationship between population growth and natural resources. [ more ]

ECON 381Global Health Policy Challenges

Last offered Spring 2017

Poor health is both a cause and a consequence of poverty. It can trap individuals in poverty and reduce aggregate economic growth. This course will be structured around major global health challenges, including maternal health, HIV/AIDS, tuberculosis, malaria, diarrheal disease, nutritional deficiencies and obesity. For each topic, we will first examine the prevalence of the problem. Then, we will turn to the evidence about the costs, benefits, and effectiveness of existing policy solutions. Finally, we will use this information to debate policy alternatives and develop policy recommendations that take into account budgetary, political, and social constraints. [ more ]

ECON 383Cities, Regions and the Economy

Last offered Fall 2014

Cities and urbanization can have significant impacts on the economy. In many developed economies, a process of regional decline is associated with older, industrial cities. In developing countries, the process of economic growth is generally associated with increasing urbanization. Urbanization, with its increasing concentration of population and production, puts particular pressure on markets to allocate resources for provision of land, housing, transportation, labor and public goods. Urbanization can alter the productivity of land, labor, and capital in ways that can improve the welfare of residents and the performance of the broader economy. In this course we will examine these conflicting economic forces and examine some recent research that contributes to our understanding of the difference between regional growth and decline, and the role that the urban structure plays in these processes. We will examine the function of land, housing, transportation, and labor markets in the urban context, and the scope for public policies to improve the performance of the regional economy. [ more ]

ECON 384Corporate Finance

Last offered Spring 2018

This course analyzes the major financial decisions facing firms. While the course takes the perspective of a manager making decisions about both what investments to undertake and how to finance these projects, it will emphasize the underlying economic models that are relevant for these decisions.Topics include capital budgeting, links between real and financial investments, capital structure choices, dividend policy, and firm valuation. Additional topics may include issues in corporate risk management, corporate governance and corporate restructuring, such as mergers and acquisitions. [ more ]

ECON 385(S)Games and Information

This course is a mathematical introduction to strategic thinking and its applications. Ideas such as Nash equilibrium, commitment, credibility, repeated games, incentives and signaling are discussed. Examples are drawn from economics, politics, history and everyday campus life. [ more ]

ECON 518Environmental and Natural Resource Policy

Last offered Spring 2016

Economic activity often damages the environment significantly, especially in developing countries. Firms may clear-cut valuable forests, while consumers may drive high-pollution vehicles with little thought for the environmental consequences. Economists have proposed a variety of policy remedies, from pollution taxes to tradable permit schemes and restrictions on the quantity of pollution. This course first examines the relative merits of these policies from a theoretical perspective. When pollution damage is uncertain, is it better to use a pollution tax or a quantity restriction? Is it worse to set a pollution tax too high than to set it too low? It then proceeds to the practical issues that attend policy implementation, particularly where state capacity is limited. What is the best policy when inspectors can be threatened or bribed? When resource extraction is hard to monitor? Case studies will likely include policies aimed at deforestation, mineral ownership and extraction, particulate air pollution from industry and transportation, and carbon emissions from electricity generation. In evaluating policies we will think about both efficiency and the distribution of costs and benefits. (What if environmental regulation only benefits the wealthiest people in a country?) We will also examine the environmental consequences of policies aimed at other problems, like poverty and low education. [ more ]

ECON 522Economics of Climate Change

Last offered Spring 2017

This course introduces the economic view of climate change, including both theory and empirical evidence. Given the substantial changes implied by the current stock of greenhouse gases (GHGs) in the atmosphere, we will begin by looking at impacts on agriculture, health, income, and migration in both poor and wealthy countries. Next we will study adaptation, including capital investments and behavioral changes. We will examine the sources of climate change, especially electricity generation and transportation, and think about optimal policies. What is the socially optimal amount of climate change? Why have countries had such a hard time agreeing on GHG emissions reductions, and how might we overcome such difficulties? We will consider the growing body of evidence from attempts to regulate GHGs, including China's pilot cap-and-trade programs, the EU ETS, and the US Clean Power Plan. We will pay particular attention to the political economy of regulation and ways in which policy results have departed from theoretical predictions. Throughout the course we will discuss the limits of the economic approach to climate change, pointing out questions on which economic theory provides little guidance. [ more ]

ECON 517Urbanization and Development

Last offered Spring 2014

At current rates of growth, the combined population of urban areas in developing countries will double in the next 30 years. The land area devoted to urban use is expected to double even more quickly. The costs of providing housing and infrastructure to accommodate this growth are enormous, but the costs of failing to accommodate urban development may be even larger. The decisions made in response to these challenges will affect the economic performance of these countries and the health and welfare of the urban residents. By affecting global patterns of energy use, these decisions will have broader impacts on the entire planet. This course will focus on these challenges. What are the economic forces that drive the process of urbanization, and how does the level of urbanization affect economic development? How are policies towards housing, transportation, public finance and development affected by urbanization? What policy choices are available, and which are most likely to succeed in dealing with the challenges of urban growth? [ more ]

ECON 514(S)Tax Policy in Global Perspective

Taxes are half of what government does. So if you are interested in what government policy can do to promote efficiency, equity, and economic development, you should be interested in tax policy. Governments must raise tax revenue to finance critical public goods, address other market failures and distributional issues, and to avoid problems with debt and inflation. Taxes typically take up anywhere from ten to fifty percent of a country's income, they profoundly affect the incentives to undertake all varieties of economic activity, and the government expenditures that they finance have potentially large consequences for human welfare. So the stakes involved in improving tax policy are quite large. This class provides an in-depth exploration of tax policy, from a global and comparative perspective. Because most students in this class will be CDE fellows, we will emphasize tax policy issues, examples, and evidence that are most pertinent to developing countries, but we will also learn something about tax systems in the U.S. and other industrialized nations. Topics addressed in this class include: how basic economic principles can be applied to help one think about the efficiency and equity consequences of tax policies; how personal income taxes, corporate income taxes, and value-added taxes are designed and administered and how they influence the economy; ideas for fundamental reforms of these taxes; theory and evidence in the debate over progressive taxes versus "flat" taxes; how various elements of tax design affect incentives to save and invest; how market failures and administrative problems may influence the optimality of different tax policies; the implications of global capital flows and corporate tax avoidance for the design of tax policy; tax holidays and other special tax incentives for investment; empirical evidence on the influence of taxes on economic growth, foreign direct investment, labor supply, and tax evasion; tax policy towards natural resources such as minerals and oil; case studies of efforts to reform tax administration and reduce tax evasion and corruption; taxes on land and property; taxes on imports and exports; presumptive taxation; and the informal economy and its implications for tax policy. [ more ]

ECON 536 TFinancial Crises: Causes and Cures

Last offered Spring 2019

Financial crises have been with us for as long as banking has existed. Why are crises such a regular fixture of societies, and what can be done to prevent them, or at least reduce their cost? Topics examined include bubbles and swindles, especially when these spillover to the broader macroeconomy; the role of information in banking in normal times and in bank runs; boom-bust cycles in asset markets; international contagion; crisis resolution techniques; and the extensive history of attempts to improve regulation so as to reduce the frequency and cost of crises. Crises in developing and developed economies from the South Sea Bubble to the Euro Crisis will be examined, and the role of political economy factors in their run-up and resolution will be featured. [ more ]

ECON 391 TEconomic Analysis of Housing Markets

Last offered Fall 2016

Housing is one of the most basic of human needs and the housing market is one of the largest, most important and most heavily regulated markets in national economies around the world. At various times economists, policy makers and the general public have regarded the housing market as irrational and malfunctioning in a variety of ways. Why? In this tutorial we will explore and analyze the workings of the housing market. In what ways do housing markets differ from other markets? Why (and how often) do house price "bubbles" occur? How do mortgage markets function and influence housing markets in countries around the world? In what ways can housing and housing conditions serve as an indicator of quality of life? How do housing markets affect the sustainability of cities? These and other questions will be the focus of reading and discussion for the course. [ more ]

Taught by: TBA

Catalog details

ECON 394European Economic History

Last offered Fall 2018

Economic history directly informs our understanding of the process of economic development. With this in mind, this course will explore a series of questions related to the economic development of Europe from the early modern period until today. Why did modern economic growth first occur in Europe, and not in China or the Middle East? Why did the Industrial Revolution occur in Britain and not France? What was the role of colonialism in the acceleration of European growth? What explains the rise and fall of the Soviet economy? What are the causes and consequences of European economic integration since World War II?To answer these and other questions, we will investigate how institutional changes, the evolution of technology, aspects of globalization, and various forms of government intervention have impacted economic growth and living standards in European history, and how those developments have affected the rest of the world. Drawing on a wide variety of empirical and theoretical readings, the course will focus on how economic historians marshall evidence and construct arguments in ways that borrow from and contribute to other fields of economics. [ more ]

ECON 397(F)Independent Study: Economics

Students are invited to apply to undertake independent study on subjects of their own choosing. Interested students should consult with a faculty member about designing an appropriate project well in advance of spring registration. [ more ]

ECON 398(S)Independent Study: Economics

Students are invited to apply to undertake independent study on subjects of their own choosing. Interested students should consult with a faculty member about designing an appropriate project well in advance of spring registration. [ more ]

ECON 451(F)Topics in Macroeconomics

In this seminar, we will discuss some of the 'big questions' in macroeconomics, with a particular focus on economic growth. For example: Why are some countries richer than others? How does government intervention affect economic growth? How will the existence of finite resources (e.g., oil) affect economic growth in the long-run? Is it possible to have continued economic growth while avoiding dangerous levels of climatic change? Does inequality help or harm growth? How will automation and artificial intelligence affect growth, inequality, and unemployment? [ more ]

ECON 453(S)Research in Labor Economics and Policy

The labor market plays a crucial role in people's lives worldwide. In industrialized countries, most households contain at least one wage earner, and income from working represents the largest component of total income. Thus analyses of the labor market are fundamentally relevant to both public policy and private decision-making. This seminar will explore the structure and functioning of the labor market using theoretical and empirical tools. Topics to be covered include labor supply and demand, minimum wages, labor market effects of social insurance and welfare programs, the collective bargaining relationship, discrimination, human capital, immigration, wage distribution, and unemployment. As labor economics is an intensely empirical subfield, students will be expected to analyze data as well as study the empirical work of others. [ more ]

ECON 455Research in Economic History

Last offered Fall 2017

Historical approaches towards understanding economic development and current economic issues are increasingly in vogue. This course will explore new developments in the field of economics history, focusing on how economic historians are using old and new, qualitative and quantitative, data and methods to address questions of historical and current relevance. Along the way, we will consider works from both sides of the history - economics boundary, focusing on the ways that the two disciplines can and should borrow from one another. We will range widely across space and time, but some possible topics to be investigated include technological innovation, labor coercion, migration, trade and capital flows, colonialism, corporate governance, and political economy. Students are expected to not only read and analyze recent scholarship in economic history, but to also produce and present their own original research over the semester. [ more ]

ECON 456(F)Income Distribution

This course examines the distribution of income in the U.S., with emphasis on how it is affected by taxes, transfers, and other government programs.Questions to be addressed may include the following: How have wage inequality and the skill premium evolved over time? What factors explain a rising skill premium? How does income differ with race and gender? How is poverty measured, and what are the factors associated with living in poverty? How do government programs change the distribution of income? How much income mobility is there across generations? Students will become more critical readers of current economic literature, and will apply their skills in conducting empirical research. [ more ]

ECON 457Public Economics Research Seminar

Last offered Spring 2017

In this class, students will learn how to read, critically evaluate, and begin to produce empirical research on important and interesting public policy questions. Topics will be selected from across the spectrum of public economics issues and may vary from year to year. Examples of specific topics that may be covered include education, environmental policy, taxation, income inequality, anti-poverty policy, health care policy, the economics of crime and corruption, and the implications of behavioral economics and psychology for public policy (we will typically only cover a subset of these topics). Applications will be drawn mostly from the United States but we will also consider some issues and evidence from other industrialized and developing countries. The course will especially emphasize the critical analysis of empirical evidence on public policy questions. [ more ]

ECON 458 TEconomics of Risk

Last offered Spring 2014

Risk and uncertainty are pervasive features of economic decisions and outcomes. Individuals face risk about health status and future job prospects. For a firm, developing new products is risky; furthermore, once a product has been developed, the firm faces product liability risk if it turns out to be unsafe. Investment decisions--from managing a portfolio to starting a business--are also fraught with uncertainty. Some risks are environmental--both manmade problems and natural disasters; other risks include the possibility of terrorist attack and, more locally, issues of campus safety. This tutorial explores both the private market responses to risk (e.g., financial markets, insurance markets, private contracting, and precautionary investments and saving) and government policies towards risk (e.g., regulation, taxation, and the legal system). From a theoretical standpoint, the course will build on expected utility theory, diversification, options valuation, principal-agent models, contract theory, and cost-benefit analysis. We will apply these tools to a wide variety of economic issues such as the ones listed above. One goal of the course is to discover common themes across the disparate topics. Students will be expected to read and synthesize a variety of approaches to risk and uncertainty and apply them to various issues. [ more ]

ECON 459(S)Economics of Institutions

Why are some countries so rich and others so poor? Typical answers to this question have emphasized proximate causes like factor accumulation (i.e., growth in a nation's physical and human capital endowments), technological progress, and demographic change. The institutional approach to this question, however, emphasizes the role of sociopolitical and cultural factors, broadly defined, as a fundamental determinant of its economic prosperity. The central idea is that the added-value of economic activities to society at large is primarily conditioned by the social arrangements within which these activities occur. Specifically, these social arrangements invariably generate a structure of private incentives, which can either promote behavior that is conducive to economic development or lead to the pursuit of private gain at the expense of the common good. As such, the key to economic development in this view is the establishment of a suitable set of institutions and structures of governance in society. This course will survey the rapidly expanding literature on the topic of institutions and economic development, with an emphasis on the latest empirical evidence that has come to bear in the context of both historical and contemporary societies. The purpose of the course will be to expose students to the core ideas and empirical tools employed at the frontier of research in this area of inquiry. The readings will primarily comprise published journal articles and unpublished working papers, and students should expect to apply concepts from across all the core courses in economics. [ more ]

ECON 463Financial History

Last offered Fall 2018

What can we learn from financial history to understand the successes and failures of finance today, and how finance and politics interact? This course opens with a brief survey of some of the major characteristics, issues, and challenges of financial systems today, and then examines earlier experience with these phenomena. Topics to be examined include: the role of finance in economic development historically, including in the financial revolutions from Northern Italy, the Netherlands, Britain and the US; the relationship between finance and government, and the extent to which it has changed over time; the lessons from early asset bubbles for modern financial systems; the effect of institutions (laws, norms, and culture) and political systems in shaping the impact of finance, as illustrated by comparisons between Mexico and the U.S., among other cases; and lessons from U.S. financial history for policies today. The course also examines the tools that were developed in earlier epochs to deal with different risks, evaluates their efficacy, and considers lessons for modern financial regulation. [ more ]

ECON 465Pollution and the Labor Market

Last offered Spring 2018

If your home town has polluted air, does that reduce your wage? Do you work less? Are you less likely to finish high school? These are specific versions of an important general question: how does pollution affect labor market outcomes? The answer matters for individual decisions (where to live) and government policies (air pollution regulations). This seminar begins from theories of optimizing worker behavior in the presence of pollution. Building on this foundation, we will critically evaluate new empirical research into the impacts of pollution on human capital, labor supply, and productivity. We will also study the impact of pollution regulations on wages and employment. Included papers will cover both developed and developing countries. [ more ]

ECON 518 TDevelopment Successes

Last offered Spring 2012

Although living standards in most of the worlds poor countries have increasingly fallen behind those of the rich industrial countries, a relatively small number of countries that were quite poor in the middle of the last century have achieved dramatic improvements in their incomes since then. These development successes include countries such as Japan, the four dragons (Hong Kong, Korea, Singapore, and Taiwan), the MIT economies (Malaysia, Indonesia, and Thailand), the Asian giants of China and India, as well as non-Asian economies as diverse as Botswana, Chile, and Turkey. This tutorial will explore why these countries have apparently succeeded where many other poor countries have failed. A particular focus of the course will be on extracting insights from the experiences of these success cases about the broad development strategies that have been advocated over the past 50 years by scholars as well as by the international financial institutions. [ more ]

ECON 468Your Money or Your Life: Health Disparities in the United States

Last offered Spring 2019

A 25-year-old man living in a high-income household can expect to live 10 years longer than his low-income counterpart. There are also stark differences in mortality and health by education, employment status, race, immigrant status, region, and gender. This course will explore many of the potential explanations for health disparities, including access to insurance and health care, health behaviors, stress, environmental exposure, and intergenerational transmission of health. We will emphasize causal inference and focus on assessing the quality of evidence. We will also investigate how government policies contribute to or ameliorate health disparities in the U.S. [ more ]

ECON 470(S)The Indian Economy: Development and Social Justice

The Indian economy has grown rapidly in the last two decades, but poverty has declined relatively slowly. Is this the persistence of long-standing historical disadvantages such as those faced by Scheduled Castes and Tribes? Does this reflect failures in policy, in areas such as trade or labor law? Or is the quality of governance, especially the level of corruption, primarily to blame? We will use the traditional theoretical and quantitative methods of an economist to consider these questions. [ more ]

ECON 471(S)Topics in Advanced Econometrics

The course uses both a practical and conceptual/theory based approach, with emphasis on methods of structural identification of dynamics in VARs and cointegration analysis, both in conventional time series and panel time series which contain spatial dimensions. The course will also investigate methods of computer simulation related to these techniques. The course is well suited for students considering empirically oriented honors theses in fields that employ these techniques, such as macro, finance, growth, trade and development, as well as fields outside of economics that use time series data. It is also well suited for students majoring in economics, statistics, computer sciences or mathematics who wish to expand their econometrics training and understanding to a more advanced level. [ more ]

ECON 472(F)Macroeconomic Instability and Financial Markets

This advanced course in macroeconomics and financial theory attempts to explain the role and the importance of the financial system in the global economy. The course will provide an understanding of why there is financial intermediation, how financial markets differ from other markets, and the equilibrium consequences of financial activities. Rather than separating off the financial world from the rest of the economy, we will study financial equilibrium as a critical element of economic equilibrium. An important topic in the course will be studying how financial market imperfections amplify and propagate shocks to the aggregate economy. The course may cover the following topics: the determination of asset prices in general equilibrium; consequences of limited asset markets for economic efficiency; theoretical foundations of financial contracts and justifications for the existence of financial intermediaries; the roles of financial frictions in magnifying aggregate fluctuations and creating persistence and instability; the role of leverage and financial innovation in fueling financial crises. [ more ]

ECON 520Microfinance

Last offered Spring 2013

Unequal access to finance (loans, savings, insurance) contributes to the persistence of poverty in developing countries. We review evidence that the entrepreneurial poor lack access to loans, and discuss how repayments can be enforced even when borrowers do not have collateral. We discuss how recent innovations in micro-insurance can reduce vulnerability. We will study the role of governments and donors in equalizing financial access through subsidies or targeting. Finally, we shall explore how microfinance can empower women within the household. Readings include current empirical and theoretical research in development economics. [ more ]

ECON 476(F)Behavioral Economics: Theory and Methods

The field of behavioral economics emphasizes that models in economics should account for the psychological plausibility of their assumptions and consequences. This course will cover how the field has incorporated insights from psychology into standard microeconomics models of decision-making. In the process, we will review the different methods that are used to empirically test the psychological foundations of these models, including laboratory experiments, field experiments, and quasi-experimental analysis. Homework and class discussions will focus on academic papers that use behavioral models to study topics such as household finance, public policy, consumer marketing, and many others. Throughout the semester, students will also work towards formulating and completing their own original research project. [ more ]

ECON 477Economics of Environmental Behavior

Last offered Spring 2019

A community maintains a fishery; a firm decides whether to get a green certification; you choose to fly home or stay here for spring break: behaviors of people and firms determine our impact on the environment. We'll use economics to model environmental behavior and to consider how policies can help or hurt the environment. Topics we'll study include: voluntary conservation, social norms and nudges, firm responses to mandatory and voluntary rules, and boycotts and divestment. [ more ]

ECON 491(F)Honors Seminar: Economics

This course is a research seminar for candidates for honors in economics. Each candidate prepares an honors thesis. Candidates will meet as a group to discuss problems common to all of them (such as empirical methods, data sources, and theoretical approaches) and each one will report on their work at various stages for criticism by the group as a whole. Some work is required during the preceding semester. [ more ]

ECON 492(S)Honors Seminar: Economics

This course is a research seminar for candidates for honors in economics. Each candidate prepares an honors thesis. Candidates will meet as a group to discuss problems common to all of them (such as empirical methods, data sources, and theoretical approaches) and each one will report on their work at various stages for criticism by the group as a whole. Some work is required during the preceding semester. [ more ]

ECON 493(F)Honors Thesis: Economics

A year-long research project for those honors candidates admitted to this route to honors; this is part of a full-year thesis (493-494). [ more ]

ECON 494(S)Honors Thesis: Economics

A year-long research project for those honors candidates admitted to this route to honors; this is part of a full-year thesis (493-494). [ more ]

ECON 501(F)Economic Growth and Development

This course introduces some of the major theories and ideas about economic growth and development. Motivated by a number of stylized facts from cross-country data, we will begin by posing a series of questions: Why are some countries rich and others poor? Why have some countries grown at high rates over extended periods of time, while others have experienced little or no growth? Do all economies face comparable challenges to achieving sustained economic growth? Will poor countries catch up to rich countries or are they doomed to stagnate in a poverty trap? To answer these "big" questions, we will explore the underlying mechanisms of economic growth. What role is played by savings and investment (i.e., the accumulation of physical capital)? What is the influence of population growth? How important are investments in human capital (i.e., education and population health)? How important are technological differences across countries? How much significance should we ascribe to differences across countries in geographical characteristics? How much should we ascribe to differences in the quality of institutions? For each question, we will explore different theoretical and empirical strategies developed by economists to answer the question, ranging from formal models to historical and anecdotal evidence to cross-country growth and development regressions. We will evaluate the usefulness of the different approaches to each question for informing development-promoting and poverty-alleviation policies, and we will also discuss the reasons why so many important questions about economic growth continue to remain difficult to answer. [ more ]

ECON 502Institutions and Governance

Last offered Spring 2012

Over the last two decades economists have become increasingly aware of the importance of the "social infrastructure" at various levels of economic activity: capable and honest government officials must be available to formulate and implement policies, markets must be supported by suitable institutional frameworks, property rights must be secure, and contracts reliably enforced. Even the structure of the household, the smallest institution analyzed by economists, has been shown to have an important influence on economic development. This course will survey the growing literature on institutions and governance. [ more ]

ECON 502(F)Statistics/Econometrics

This course focuses on basic methods of bringing economic theory and data together to provide empirical guidance for policy formulation, including use of computers in econometric analysis. This course covers techniques of econometric analysis using a moderate level of mathematical exposition. [ more ]

ECON 503(F)Statistics/Econometrics: Advanced Section

The course introduces students to the statistical methods used by economists, including those studying policy questions. The focus is on applications. Students will also work with Stata, a software widely used by economists. [ more ]

ECON 504(F)Public Economics in Developing Countries

This class is about microeconomic and empirical analysis of government expenditure programs in developing and transitional countries. It provides tools for understanding the effects of government policies, as well as a useful conceptual framework for analyzing normative questions such as "what role should government play in the economy" and "what is a good policy?" The course begins by considering the efficiency of market economies, and rationales for government intervention in the market, such as public goods, externalities, information-based market failures, imperfect competition, and equity. We also consider ways that human behavior might deviate from perfect rationality, and what that might imply for policy. Along the way, we apply these concepts to various examples of policy issues, including, among other things, the environment, education, health, infrastructure, security, social insurance, and aid to the poor. We then turn to the general question of how to make the government work better, addressing questions such as the following. When is it better to have the government own and produce things, and when is it better to privatize? What are the incentives of politicians and government employees, and how does the design of political and budgetary institutions affect the degree to which they serve the public interest? How should responsibilities be divided up between the central government and local governments, and what are the advantages and disadvantages of "decentralization?" What can be done to improve the delivery of basic services? For example, how might one address problems of corruption and absenteeism? Throughout the course, we consider examples of empirical research, and to facilitate this, we will occasionally introduce econometric tools that are particularly useful for microeconomic policy evaluation. [ more ]

ECON 505(F)Developing Country Macroeconomics I: Theory

The macroeconomic structures of developing countries tend to be very different from those in high-income countries, and their macroeconomic policy environments also differ in important ways from those in rich countries. This course is intended to introduce students to a set of models that is particularly suitable for analyzing macroeconomic performance in developing countries, as well as to some analytical tools that help us understand why such countries have often experienced a variety of macroeconomic crises, including sovereign debt, currency, and banking crises. [ more ]

ECON 506(F)Fundamentals of Developing Country Macroeconomics

This is a practically oriented course in macroeconomic theory and policy. It begins with a review of core concepts and definitions. It then discusses the contributions of households and firms to aggregate production and spending. Next is an introduction to monetary and fiscal policy. It goes on to develop a complete macro model, which is then used to discuss some of the monetary, fiscal and exchange rate policy issues faced by developing and emerging market economies. The class is offered as an alternative to Econ 505 for those not intending to specialize in macroeconomics. [ more ]

ECON 532 T(S)Inclusive Growth: The Role of Social Safety Nets

Designing and implementing effective national strategies to promote inclusive economic growth can require difficult policy reforms, sometimes with adverse short-term impacts for vulnerable groups within society. Social safety nets provide a pro-poor policy instrument that can balance trade and labor market reform, fiscal adjustments (such as reduced general subsidies) and other economic policies aimed at enabling better market performance. In addition, social safety nets help the poor to cope with shocks to their livelihoods, promoting resilience, human capital development and sometimes high-return risk-taking. This tutorial will offer students the opportunity to explore the role of social safety nets in promoting inclusive economic growth, drawing on case studies from Africa, Asia, Latin America and Eastern Europe. The first part of the tutorial will define social safety nets within the broader context of social protection, examining the diversity of instruments and their linkages to economic growth. The second part will delve more deeply into the design and implementation of effective interventions, assessing program choice, affordability, targeting, incentives and other issues. The third part will analyze the role of social safety nets in supporting economic growth strategies, drawing on international lessons of experience. [ more ]

ECON 534 T(S)Long Term Fiscal Challenges

This tutorial will address the conceptual and theoretical issues that confront policy makers when they face policy challenges that are likely to emerge only over the medium- to long-term and that have important budgetary implications. It will explore the strategies and approaches that a number of countries have attempted to develop to bring the long-term into their current policy and budgetary planning processes. Students will be exposed to different long-term challenges that have important budgetary implications, including aging populations, health care, climate change, energy and infrastructure, and water. The course will consider the specific policy challenges that arise for each and the ways in which different countries are addressing them. [ more ]

ECON 535 TInternational Financial Institutions

Last offered Spring 2018

This tutorial will explore the role of official international financial institutions in the global economic and financial system, their relations with members, proposals for how they might be reformed, and issues that they face. The focus will be principally on the International Monetary Fund, and to a lesser extent the World Bank, the Bank for International Settlements and Financial Stability Board. Topics and readings will focus on such issues as: the roles and governance reform of the IMF and World Bank; lessons from their performance in international crises; initiatives of the Fund and Bank; the global adjustment process; financial system stability; governance reform; lending programs; the management of international reserves; and provision of advice to members. Participants will meet in pairs with the faculty member. Each week, one student will prepare a policy paper and submit the paper to the professor and to the other student in advance of the meeting. During the meeting, the student who has written the paper will present an argument, evidence, and conclusions. The other student will provide a critique of the paper based on concepts and evidence from the readings and his own research and experience. The professor will participate in the discussion after each participant has presented and ask questions that highlight or illustrate critical points. [ more ]

ECON 537 TDeveloping Money and Capital Markets

Last offered Spring 2019

This tutorial will explore ways to create or enhance money and capital markets so that they can better perform their roles in channelling savings to their most productive uses and in serving as transmission mechanisms for monetary policy. [ more ]

ECON 538 T(S)Resilience and Macroeconomic Policy

Despite tremendous improvements in combating global hunger and child mortality, an increasing number of the world's population continue to live in fragile conditions, buffeted by conflict, forced migration, weak governance, and state inability to deliver basic services to its citizens. Setting macroeconomic policy is difficult in such countries. Not only are decisions affected by policymakers' distorted incentives and governments' internal conflicts, fragility also deteriorates policy transmission mechanisms and constrains policy spaces. This course aims at identifying the causes and consequences of fragility and at discussing how policies should be changed to enhance resilience in such countries. The course will, first, look into the definition and characteristics of fragility, its numerical representation, and its causes and main consequences. The course will also highlight how policy is made in states of fragility, in particular, fiscal policy, monetary policy, exchange rate policy, export promotion policy, etc.), as well as consider policy interactions. Finally, the course will focus on efforts to mitigate fragility and enhance resilience in such countries, including the role of structural policies and that of international financial institutions. [ more ]

Taught by: Ralph Chami

Catalog details

ECON 540(F, S)Research Studies

In this course, each Fellow carries out an individual research study on a topic in which they have particular interest, usually related to one of the three seminars. The approach and results of the study are reported in a major paper. Research studies are analytical rather than descriptive and in nearly all cases include quantitative analyses. Often the topic is a specific policy problem in a Fellow's own country. [ more ]