Social Sciences: Economics, 2012-2013
The study of economics provides a basis for understanding and evaluating economic behavior and relations at all levels of society. Microeconomics focuses on the behavior of individuals and firms and how they interact in markets for goods, services, labor and assets. Macroeconomics focuses on the behavior of aggregate economic variables, such as GNP, the inflation rate, the unemployment rate, the interest rate and the budget deficit, and how they relate at the economy-wide level. Other areas of economics focus on specific aspects of micro- and macroeconomics as they are applied to diverse situations and economies around the world.
Most of modern economics is structured around a common set of theoretical ideas and analytic methods that unify the field. These tools aid in understanding both how the economic world works and how it can be affected by public policies and world events. The introductory course, ECON 105 or 106, introduces and develops these ideas and methods at an elementary level while also presenting information about markets, economies and governmental policy that is important to a liberal education. This course provides an overview of economics and a strong foundation for more advanced work in economics.
The intermediate (200-level) courses offer material on a wide range of economic topics. These courses have ECON 105 or 106 as a prerequisite and are designed to be useful to non-majors as well as minors and majors. The advanced theory courses of ECON 300 and 302 follow up on the introductory theory course but offer more in-depth and mathematical treatments of these theoretical concepts, which are the building blocks for modern economic thought and research. Statistical methods used in empirical research are important for students who will read original economics articles and conduct their own research. ECON 203 (Statistical Methods in Economics) or ECON 204 (Economics Statistics with Calculus), followed by ECON 304 (Introduction to Econometrics), give students the necessary methodological training. The advanced (300-level) courses involve a more technically sophisticated approach to analyzing many of the same economic topics. These normally havesome combination of ECON 203, 300, 302 and 304 as prerequisites and are designed primarily for economics minors and majors and those who expect to make use of economics in their professional careers. In most of the advanced courses, a substantial paper is an important part of the requirements. A small number of the 300-level courses are “junior research seminars” designed to develop the student’s research skills through exploring topical cutting-edge research and conducting related original projects. ECON 396 is a two-semester senior research seminar. The first semester is a group seminar in which students learn salient research skills, listen to and critique work of guest economics speakers, and develop their own research questions. During the second semester students conduct original and independent economics research under the guidance of one of the economics faculty members.
Students may count most courses offered by the Bryn Mawr economics department toward the economics minor and major (with the exception of 100-level courses, excluding ECON 105). Similarly, Bryn Mawr students may count most Haverford economics courses toward their economics major. The two economics departments jointly plan their course schedules so that they can offer the maximum variety of economics courses across the two campuses.
Modern economics continues to expand in its use of mathematically sophisticated models and statistical techniques. Economics majors are required to take at least two semesters of college-level calculus. In addition, we encourage students who are planning to apply to graduate programs in public policy or business to take mathematics through at least MATH 121 (Multivariable Calculus III) and at least one computer science course. We strongly advise students planning to apply to Ph.D. programs in economics are strongly advised to take mathematics through at least MATH 215 (Linear Algebra) and MATH 317 (Analysis I). Economics majors also have the option of pursuing an area of concentration in mathematical economics, described in its own section of this catalog.
Professor Holland Hunter, emeritus
Professor Anne E. Preston, chair
Professor Vladimir Kontorovich
Associate Professor Richard Ball
Assistant Professor Indradeep Ghosh
Assistant Professor Saleha Jilani
Assistant Professor David Owens
Visiting Professor Biswajit Banerjee
Visiting Assistant Professor Shannon Mudd
Visiting Professor Iqbal Zaidi
ECON 105 or 106, 203 or 204, 300, 302, 304, 396 (a year-long 2 semester course) Four other semester courses above the 100 level, two of which are at the 300 level, of which one must be a junior research seminar. Two semesters of college-level calculus or equivalent.
With departmental approval, MATH 203 can replace ECON 203 or 204 and MATH 286 can replace ECON 304. Prospective majors are advised to take ECON 105 or 106, 203 or 204 and either ECON 300 or 302 by the end of their sophomore year.
Requirements for a minor in economics are: ECON 105 or 106, 203 or 204, 300 or 302 and three other economics courses at the 200 and/or 300 level.
An economics major whose grade point average in economics courses taken at Haverford, Bryn Mawr or Swarthmore at the beginning of the second semester of the senior year is 3.6 or higher is a candidate for the degree with Honors in economics. The department awards Honors or High Honors on the basis of a student’s performance in: (a) all his or her economics courses, including those taken in the second semester of senior year; and (b) an oral examination by department faculty focused on the student’s senior thesis.
105 Introduction to Economics SO
This is an introduction to microeconomic topics—(opportunity cost, supply and demand, consumer decision making, the theory of the firm, market structures, and efficiency and market failure)—and macroeconomic topics—(the determination of GDP, money and interest rates, unemployment and inflation, and fiscal and monetary policy). Because this course requires graphical and algebraic competency, we strongly encourage students to take a college-level calculus course either before or concurrently with this course.
106 Introduction to Economics with Calculus SO
This is an introduction to microeconomic topics—(opportunity cost, supply and demand, consumer decision making, the theory of the firm, market structures, and efficiency and market failure)—and macroeconomic topics—(the determination of GDP, money and interest rates, unemployment and inflation, and fiscal and monetary policy). This course is more mathematical in its treatment of the material than Economics 105, and therefore, prior mathematical knowledge is required. Prerequisite: Students must have taken MATH 113 or have been placed at MATH 114 or higher in freshman Math placement tests.
203 Statistical Methods in Economics SO/QU
This course examines frequency distributions, probability and sampling theory, simple correlation and multiple regression, and an introduction to econometric terminology and reasoning. It requires three class hours and two lab hours per week. Prerequisite: ECON 105 or 106.
204 Economic Statistics with Calculus SO/QU
This is an introductory course in statistics aimed primarily at students in economics and other social sciences. The course develops the theoretical groundwork of statistical inference and investigates the application of theoretical principles and methods to real data. It requires three class hours plus two lab hours per week. Prerequisite: MATH 114 or placement at a higher level.
205 Corporate Finance SO
This course explores theories and practices of corporate finance with a focus on investing and financing decisions of business firms. Topics include financial instruments and markets, valuation and risk measures, financial analysis and planning, cost of capital, capital budgeting and financial management. Prerequisite: ECON 105 or 106.
206 Microfinance: Theory, Practice and Challenges SO (Cross-listed in Peace, Justice, and Human Rights)
This is an exploration of microfinance as an alternative approach to meeting the financial needs of the poor and, ideally, to assist in their current and future well-being. The course provides theoretical explanations for its methodology, evaluates empirical research into its impacts and debates important issues in its practice.
209 Law and Economics SO
Why do rational people follow fixed rules (laws) instead of doing what is best for them in a specific situation? Can there be order without law? Should the government compensate people when it issues environmental and wildlife protection regulations thatreduce the value of their property? Does it make sense that the lady who burned herself with McDonalds coffee won several million dollars in compensation. We address these and these and other questions as we look at property law, contracts and torts. Prerequisite: ECON 105 or 106.
210 Linear Optimization and Game Theory NA/QU (Cross-listed in Computer Science and Mathematics)
Prerequisite: MATH 215, or MATH 115 and concurrent registration in MATH 215. Typically offered in alternate years.
224 Women in the Labor Market SO (Cross-listed in Gender and Sexuality Studies)
This course examines the experiences of American women in the labor market over the last 50 years. After an examination of the historical trends of female labor force participation, the course investigates such important issues facing women in the labor market as: investments in education, the relation between labor force participation and family responsibilities, occupational location, salary growth and salary determinants. We present supporting material on institutional factors such as equal employment opportunity legislation and on theoretical concepts in areas such as labor supply, human capital investment and discrimination, to help understand the empirical labor market outcomes.
237 Games and Strategies in Economics SO/QU
This is a survey of the major equilibrium concepts of non-cooperative game theory, with an emphasis on applications to economics and related fields. Prerequisite: MATH 113 with a grade of 2.7 or higher, or equivalent preparation in Calculus.
240 Economic Development and Transformation: China vs. India SO (Cross-listed in East Asian Studies)
This is a survey of the economic development and recent transitional experience in China and India, giant neighboring countries that account for roughly one third of the total world population. The course examines the economic structure and policies in the two countries, with a focus on comparing China and India's recent economic successes and failures, their development policies and strategies, institutional changes and factors affecting the transformation process in the two countries. Prerequisite: ECON 105 or 106.
241 Economics of Transition & Euro Adoption in Central and Eastern Europe SO
This course aims to provide an understanding of the process of transition of former socialist countries from centrally planned to market economies, and their accession into the European Union (EU) with the eventual goal of adopting the euro as the currency. In the context of transition, the course covers issues related to the political transformation, macroeconomic stabilization, privatization and structural reforms in the fiscal sector, banking and financial sectors, and the labor market. The course also delves into the causes of the current financial crisis and the impact on the euro zone, and the policy measures being considered to address the crisis. Prerequisite: ECON 105 or 106.
249 The Soviet System and Its Demise SO (Cross-listed in Political Science and Russian)
The Soviet system was inspired by some of the loftiest ideals of humanity. The entire society was redesigned so as to pursue common goals, rather than conflicting private objectives. The economy was run for people, not profits. The Soviet system is no more, but the ideas on which it was founded will probably always be with us. What does the largest social and economic experiment in history teach us? The course is one third political science and two thirds economics. Prerequisite: Two one-semester courses in economics, political science, or history.
250 Sports Economics SO
This is an examination of organized team sports from the perspective of the economist and public policy maker. We use tools of labor economics and industrial organization to analyze economic problems arising from opportunities for monopoly and monopsony rents and piecemeal regulation. Prerequisite: ECON 105 or 106.
255 Crises SO
This course studies the many dimensions of the 2008 Financial Crisis and the ensuing macroeconomic recession in much of the industrialized world, through a variety of perspectives, involving economic history, the history of economic thought and modern macroeconomic theory. Prerequisite: ECON 105 or 106.
297 Economic Sociology SO (Cross-listed in Sociology)
Prerequisite: SOCL 155a or b and ECON 105 or 106, or the instructor’s consent. Typically offered in alternate years.
300 Intermediate Microeconomic Analysis SO
Microeconomic theory has developed around the analysis of Adam Smith's “invisible hand” conjecture. To test this conjecture, we model the behavior of economic actors (consumers and firms) and their interaction in different markets (for goods, capital and labor). These models allow us to investigate the conditions under which these markets work well, less well or not at all. In the process, we develop basic tools and concepts used in other areas of economics. We study many of the topics covered I Introductory Microeconomics (ECON 101) more rigorously and in greater depth. We also introduce new topics, such as behavior under risk, insurance and imperfect information. Prerequisite: ECON 105 or 106, one other economics course and MATH 114.
302 Intermediate Macroeconomic Analysis SO
This is an analysis of the behavior of aggregate economic variables such as GDP, inflation, unemployment, interest rates, and the budget and trade deficits. it is structured around the development of a New Keynesian/Neoclassical general equilibrium model, which relates the markets for goods, money and labor. Specific topics include: determinants of the business cycle, effects of fiscal and monetary policies, supply shocks and inflationary expectations. Prerequisite: ECON 105 or 106, one other economics course and MATH 114.
304 Introduction to Econometrics SO
This is a development of the econometric theory introduced in Economics 203. Topics include ordinary least squares estimation, weighted least squares estimation, estimation of models with nonlinear forms, instrumental variables and maximum likelihood estimation. Emphasis is on application of econometric techniques to real economic and social policy issues, such as the optimality of speed limit control, AIDS awareness and behavior modification, labor market discrimination and worker productivity. Students are expected to use data sets to evaluate policy issues and are required to make a final presentation of findings in class. Prerequisite: ECON 203.
306 Advanced Corporate Finance SO
This course examines theories and practices of corporate finance and how they have informed each other in their development. The focus is on financing at the firm level. Topics include valuation and risk measures at the level of both individual securities and the level of firms, project analysis, cost of capital, capital budgeting, and financial statement analysis. Prerequisite: ECON 203 or 204 and ECON 300. Offered occasionally.
307 Money and Banking SO
This course focuses on the basic features of asset market equilibria and the nature of interactions between private sector agents, the banking system and the central bank. The course begins with a description of how asset prices are determined in stock and bond markets, and then moves on to a study of more sophisticated financial assets such as forwards, futures and options. The course ultimately facilitates a discussion of the 2008 financial crisis. This course is not open to anyone who has already taken ECON 207 at either Haverford or Bryn Mawr. Prerequisite: ECON 302 and MATH 121.
311 Theory of Non-Cooperative Games SO
This course provides a rigorous development of the theory of non-cooperative games, with applications to economic, political, social and legal problems. Topics include normal form games and the concept of Nash equilibrium, extensive form games, repeated games and reputation effects, games of incomplete information, Bayesian equilibrium and refinement concepts, and market signaling. Prerequisite: ECON 203 or 204, ECON 300 and MATH 114.
312 General Equilibrium Theory SO
This is an examination of the Arrow-Debreu model of general competitive equilibrium, one of the foundations of neo-classical microeconomic theory. The course focuses on sufficient conditions for existence and uniqueness, welfare properties and stability of equilibrium prices. Prerequisite: ECON 300 and either MATH 216 or 317.
314 Behavioral Economics SO
This course explores systematic departures of behavior from the predictions of neoclassical economic theory, and when possible, proposes alternative theories to explain this behavior. The course begins with a study of reference-dependent preferences, based on Kahneman and Tversky’s seminal paper “Prospect Theory.” Further topics include, but are not be limited to, present-biased preferences, social preferences and behavioral finance. Students should be comfortable with microeconomic theory and have some exposure to game theory. The course has a heavy research component, and students should be prepared to do critical readings of scholarly articles and to write and present a research paper of their own. Prerequisite: ECON 300.
345 Advanced Topics in Finance (International Finance) SO
This course focuses on issues that arise with the movement of capital across national borders, both at the micro/business level and at the macro/national level. At the micro level we examine exchange rates and their use, how uncertainty in future exchange rates affects firms and what strategies, real and financial, they can use to lessen their risk. At the macro level we look at several models of the determination of exchange rates, at the relationship between returns across currencies and how they relate to foreign exchange rate expectations, and at simple macroeconomic models that include the influence of foreign capital flows. Finally, we look closely at the disruptions of financial crisis and potential policies of governments, including fixed verus flexible exchange rates and the imposition of capital controls. Prerequisite: ECON 203, 300 and 302.
348 International Trade: Theory and Policy SO
This advanced theory and policy course examines recent theoretical developments in the area of international trade, in particular as they apply to key current international economic policy concerns. The topics include international factor movements, foreign direct investment, the role of multinationals and trade in developing economies, regional integration and preferential trade agreements. Prerequisite: ECON 300 or the equivalent.
351 Empirical Macroeconomics SO
This course aims to provide students with an understanding of the design and implementation of macroeconomic and financial policies. The course covers the principal features of accounts used in macroeconomic analysis, the diagnosis of macroeconomic performance and the preparation of an internally consistent macroeconomic policy program that moves an economy toward internal and external balance. We use actual case studies and form teams with each team collectively preparing an analysis of economic background and formulating a policy program for a given country.
371 Junior Research Seminar: Psychological Biases and Economic Decisions SO
This seminar covers current research on the role of psychological biases in economic decision-making. The focus is on critical reading of recent work and students developing their own research. Prerequisite: ECON 300 and 304.
372 Junior Research Seminar: Advanced International Trade SO
This advanced seminar covers topics in international trade theory and policy, with an emphasis on current research topics and developments. We analyze determinants of international trade and foreign investment, and examine the motivations for and consequences of tariffs and quantitative restrictions on trade. Topics include dynamic comparative advantage, factor movements and multinational corporations, effects of trade on economic growth and income inequality, international trade policy negotiations, agreements and disputes, and economic integration. Prerequisite: ECON 300 and 304 or the instructor’s consent; MATH 121 or 216 is recommended.
374 Junior Research Seminar: Access to Finance SO
This seminar examines the determinants of access to finance with particular emphasis on microfinance and small-business financing. Reading seminal and recent research articles each week, the primary focus is on credit. From a theoretical basis, we explore how various lending technologies are responses to problems of asymmetric information. In our examination of microfinance, we consider the theoretical bases for different lending technologies and then examine empirically their ability to explain observations in the field. We also assess empirical evidence on the impacts of microfinance. Turning to small business lending, we examine how banking structures and regulations affect access to finance. Prerequisite: ECON 203 and 300; ECON 304 (may be taken concurrently).
376 Junior Research Seminar: Measuring Discrimination SO
This research seminar examines how economists define and measure discrimination against minorities. Original texts highlight the historical evolution of economic thinking about measuring discrimination, mostly in the context of the labor market but in other scenarios as well. Prerequisite: ECON 300 and 304.
396 Research Seminar SO
480 Independent Study SO