Economics Jump To: Jump To: Program Offerings A.B. Offering type A.B. Economic analysis plays a central role in many disciplines within the social sciences. It has three main branches: macroeconomics provides the language and tools for analyzing economic policy and aggregate economic outcomes; microeconomics offers a framework for understanding interactions among individuals or organizations and the role that incentives and information play in these interactions; and econometrics confronts macroeconomic and microeconomic theories with data. The economics department trains students in each of these three branches of economics and enables them to apply this understanding to problems within one or more subfields of economics (such as monetary economics, international finance, development economics, industrial organization, public finance, health economics, environmental economics, political economy, labor economics and international trade). Goals for Student Learning The department expects undergraduate majors in the program to be able to demonstrate the following learning outcomes. Students should:Command the language of all three branches: macroeconomics, microeconomics and econometrics.Understand the tools of all three branches sufficiently to be able to follow and participate in policy debates.Master the tools of at least one of these branches to the extent necessary to understand the existing literature.Understand the institutional context and applications relevant to at least one subfield of economics or develop advanced training in the tools of one of the main three branches.Use this knowledge of methodological tools and applications to conduct original research. Advanced Placement Students who scored 5 on the AP microeconomics exam are exempted from ECO 100. Students who scored 5 on the AP macroeconomics exam are exempted from ECO 101. Students who scored 5 on the AP statistics exam are exempted from ECO 202. (Note: Exemption from ECO 100 and ECO 101 will be accorded to students who pass the British A-levels with a grade of A, and to those who earn a 7 on the higher-level International Baccalaureate.)Students exempted from ECO 100, ECO 101 and/or ECO 202 may still benefit from taking these courses, which provide important basic materials for the study of economics. Prerequisites To enter the department, a student must complete the prerequisite courses ECO 100, ECO 101, ECO 202 (or equivalent), and MAT 175 (or equivalent) by the end of sophomore year and earn a letter grade of C or better in each course. MAT 201 or EGR 156 can be substituted for MAT 175.To satisfy the statistics prerequisite, ECO 202 can be substituted with (a) ORF 245 or (b) POL 345 in combination with POL 346. POL 345 alone will not count as a substitute for ECO 202. PSY 251, SPI 200 and SOC 301 will not be accepted.Also note that the statistics prerequisite cannot be satisfied with a summer course taken after the student has begun studies at Princeton except in highly unusual circumstances approved by the executive director of undergraduate studies, Professor Smita Brunnermeier ([email protected]).It is highly recommended that students who wish to take math-track econometrics (ECO 312) or upper-level finance certificate courses (such as ECO 462, ECO 465 and ECO 466), or pursue graduate studies in economics and finance take MAT 201 and MAT 202 instead of one semester of MAT 175 or EGR 156. Both MAT 201 and MAT 202 should be taken for a letter grade by this subset of students.A meeting for sophomores interested in joining the department will be announced in the spring. Under-level students are welcome to discuss department requirements with the director of undergraduate studies. Students considering studying abroad are urged to meet with the director of undergraduate studies at the earliest opportunity in their first year. Program of Study General RequirementsThe department requires majors to complete, and pass on a graded basis, eight courses: three core courses and five other elective departmentals.Furthermore, students must have a departmental average of at least a C.Note: The calculation of the departmental average is described in Departmental Average. The treatment of failed courses is described in Advancement to Senior Standing.Core CoursesAll majors must pass, on a graded basis, core courses in microeconomics (ECO 300 or 310), macroeconomics (ECO 301 or ECO 311) and econometrics (ECO 302 or ECO 312). These courses must be completed during or before junior year. Each of the three core courses is offered in two versions to accommodate different levels of preparation in mathematics: ECO 300, ECO 301 and ECO 302 require MAT 175; ECO 310 and 311 require MAT 201; and ECO 312 requires MAT 201 + MAT 202.Qualified students are encouraged to take the more mathematical versions of our core courses. It is not necessary to take all three core courses in the same version.Other DepartmentalsIn addition to the three core courses, majors must pass, on a graded basis, five other departmental courses. Departmentals can be any 300-, 400-, or 500-level economics courses, or an approved cognate (see Cognates).Students planning a senior thesis with empirical emphasis are strongly encouraged to take ECO 313; students planning a theoretical senior thesis are strongly encouraged to take ECO 317 and/or ECO 418.CognatesEconomics majors are allowed to count a maximum of two courses from other departments as cognates. These courses must have substantial economics content. A course with an economics cross-listing (indicated by an ECO 3XX, ECO 4XX or ECO 5XX number in its first or second listing) counts as a regular departmental, not as a cognate. Courses that will be automatically recognized by TigerHub as cognates are listed below. No application is necessary for these courses.COS 445 Networks, Economics and ComputingECO 470/COS 470 Principles of BlockchainsECE 473/COS 473 Elements of Decentralized FinanceENE 422/MAE 422 Introduction to Electricity: Engineering, Economics, and RegulationMAT 378 Theory of GamesORF 307/EGR 307 OptimizationORF 309/EGR 309/MAT 380 Probability and Stochastic SystemsORF 311 Optimization under UncertaintyORF 350 Analysis of Big DataORF 363/COS 323 Computing and Optimization for Physical & Social SciencesORF 405 Regression and Applied Time SeriesORF 445/ORF 474 High-Frequency Markets: Models and Data AnalysisORF 473 Special Topics in Operations Research and Financial Engineering: Financial Technology and Data-Driven InnovationORF 531/FIN 531 Computational Finance in C++POL 335 The Political Economy of the United StatesPOL 349 Political EconomyPOL 385 International Political EconomyPOL 434 The Political Economy of China, Past and PresentPOL 492 Political Economy and DevelopmentPOL 505 Experimental Methods in Political ScienceSOC 306/SML 306 Machine Learning with Social Data: Opportunities and ChallengesSPI 329/POL 350 Comparative Political Economy for Policy MakingSPI 340/PSY 321 Psychology of Decision Making and JudgmentSPI 373/CHV 373 Welfare, Economics, and Climate Change Mitigation PolicySPI 466/HIS 467 Financial HistorySPI 522 Microeconomics for Policy AnalysisSPI 524 Political Economy of Central BankingSPI 582C Topics in Applied Economics: Growth, International Finance, and CrisesSPI 582F Topics in Economics – House of Debt: Understanding Macro & Financial PolicyNOTE: ELE 491 is NOT approved as a cognate.If you would like us to consider a course that is not on the preceding, routinely approved list, please complete a cognate approval form and submit it, along with a copy of the course syllabus, to Gina Holland, undergraduate program manager, at [email protected]. To be approved as a cognate, a course must have substantial content in theoretical or empirical economic analysis. Permission should be obtained before the semester's deadline for the grading option change (usually in week eight or nine of each term). Departmental Tracks Program in Political Economy TrackThe department offers a Program in Political Economy for economics majors interested in studying issues at the intersection of these two fields. Program participants meet all the general requirements of economics majors, and, in addition: (1) complete two politics courses at any level before entering the program; (2) complete three 300-level (or higher) politics courses during junior and senior years; and (3) conduct junior independent work with a political economy component. Politics courses approved as economics cognates may also count toward the program’s requirements. Admission to the program takes place at the beginning of junior year, in consultation with the political economy adviser in economics. A student who participates in this program is an economics major and is subject to all the requirements of the economics department. Majors who successfully complete the program’s requirements will receive a departmental attestation.RequirementsTo enter the program, the student should satisfy the prerequisites for majoring in both the politics and the economics departments by the end of sophomore year. This means students entering the program must have completed ECO 100 and 101, MAT 175 or MAT 201, ECO 202 (statistics) and two politics courses (at any level) on a graded basis. In addition to the two politics prerequisites, a student in the PPE must complete three politics departmentals, i.e., politics courses in the 300 level or higher, on a graded basis. One of these, upon approval of the political economy adviser, can be a politics-related course from a department other than politics or economics. Politics courses are not included in the student's departmental average (unless a course has been approved as an economics cognate). Because of these additional requirements, a PPE student may want to count one or two of the politics departmentals as economics cognates. Approval of cognates is subject to the same rules as for other economics majors. Economics cognates are approved by Professor Smita Brunnermeier and under no circumstances is approval given retroactively. POL 347, POL 349, POL 352 and POL 385 are automatically approved as economics cognates and do not need a separate application/approval. Infrequently, and only with advance approval, an economics course can be counted toward the politics course requirement of the PPE; contact the political economy adviser, Professor Silvia Weyerbrock, at [email protected].A student in the political-economic track has the same junior and senior independent work requirements as other economics majors, with one exception. Political Economy majors are required to write a junior paper with sufficient political economy content, as judged by the adviser. Students are also encouraged but are not required to write a senior thesis that is related to political economy.More information is available by contacting the political economy adviser, Professor Silvia Weyerbrock, at [email protected]. Independent Work Junior Independent Work and Senior ThesisIndependent work is designed to afford majors the opportunity to identify and explore their research interests in depth. Students are expected to develop a carefully reasoned exposition that critically analyzes a problem using basic principles of economics. Juniors complete a year-long research project, which consists of a research prospectus submitted in December and a final paper submitted in April. The senior thesis is expected to be more extensive, with a topic of greater scope and correspondingly broader analysis and interpretation. Further details, from the assignment of advisers to the final deadlines, are available in the junior independent work and senior thesis sections of the department's website. Senior Departmental Examination The senior comprehensive examination is a written exam that covers the department's required courses (intermediate microeconomics, macroeconomics and econometrics). The senior comprehensive exam grade will appear on the student's transcript. Study Abroad Potential economics majors who expect to study abroad for one or two semesters must plan well ahead. Because the department only rarely permits core courses to be taken abroad, and because core courses may not be postponed to senior year, potential economics majors planning study abroad must complete the appropriate core courses in their sophomore year. It is almost never feasible to spend a semester abroad in the senior year.Economics courses taken abroad may be preapproved as departmentals by the director of undergraduate studies, ordinarily up to one per semester. Plans for junior independent work must also be approved in advance. Preparation for Graduate Study Graduate study in economics requires special preparation and advance planning, starting as early as the first year. Students contemplating graduate study in economics should see the director of undergraduate studies as early as possible. Preparation for graduate school should include the following: the more mathematical versions of the core courses (ECO 310, ECO 311 and ECO 312); two years of calculus (up through MAT 202, MAT 204 or MAT 218); an upper-level mathematics course such as MAT 320; operations research courses such as ORF 309, ORF 311 or ORF 405; and advanced econometrics or economic theory courses such as ECO 313, ECO 317 or ECO 418. Students may find the Program in Applied and Computational Mathematics or the Program in Optimization and Quantitative Decision Science an interesting option. It is not necessary to be an economics major to enter a graduate economics program, but the economics courses listed above are highly recommended. Graduate courses in economics (500-level) are open to qualified undergraduates. These courses are very demanding and must be started in the fall term. Taking one of these courses can be useful for students who intend to enter an economics graduate program, because it begins the student's advanced training, gives the student a taste of graduate school and provides evidence during the admissions process of the student's ability to do advanced work in economics. Faculty Chair Mark A. Aguiar (acting) Wolfgang Pesendorfer Associate Chair Alessandro S. Lizzeri (interim) Director of Undergraduate Studies Smita B. Brunnermeier Director of Graduate Studies Kate Ho (co-director) Jakub Kastl (co-director) Professor Mark A. Aguiar Yacine Aït-Sahalia Roland J. Benabou Alan S. Blinder Leah P. Boustan Markus K. Brunnermeier Sylvain Chassang Janet M. Currie Pascaline Dupas Mira Frick Gene M. Grossman Faruk R. Gul Kate Ho Bo E. Honoré Ryota Iijima Seema Jayachandran Jakub Kastl Nobuhiro Kiyotaki Henrik J. Kleven Michal Kolesár Ilyana Kuziemko David S. Lee Alessandro S. Lizzeri Atif R. Mian Eduardo Morales Ulrich K. Mueller Pietro Ortoleva Wolfgang Pesendorfer Mikkel Plagborg-Moller Stephen J. Redding Richard Rogerson Cecilia E. Rouse Aysegül Sahin Giovanni L. Violante Mark W. Watson Wei Xiong Leeat Yariv Motohiro Yogo Owen M. Zidar Associate Professor Thomas Fujiwara Ernest Liu Xiaosheng Mu Assistant Professor Zachary Bleemer Nicholas W. Buchholz Pauline Carry Daniel T. Chen Natalie Cox Ellora Derenoncourt John R. Grigsby Adam Kapor Moritz F. Lenel Jonathan E. Payne Karthik A. Sastry Maria Micaela Sviatschi Can Urgun Senior Lecturer Smita B. Brunnermeier Caio Ibsen Rodrigues de Almeida Kelly Noonan Lecturer Hadar Avivi John Sturm Becko Swati Bhatt Olivia Bordeu Gazmuri Hope Corman Thomas C. Leonard Jin Liu Bernardo Ribeiro Roman G. Rivera Fedor Sandomirskiy Henry Shim Silvia Weyerbrock Andrea Wilson Iqbal Zaidi JC de Swaan Visiting Professor Lin Peng Nancy Reichman Visiting Assistant Professor Emilie A. Jackson Ruonan Xu Visiting Lecturer Joseph Abadi Pedro Acosta Valenzuela Martin Almuzara Salvador Danial Lashkari For a full list of faculty members and fellows please visit the department or program website. Courses ECO 100 - Introduction to Microeconomics Fall/Spring SA Economics is the study of the allocation of scarce resources. The subject of this course is microeconomics, which examines the decision making of individuals and firms with regard to consumption, production, and allocation of good and services in a market system. We examine the benchmark "perfectly competitive" market setting as well as market settings that are not perfectly competitive. We discuss the appropriate role of government in addressing these "market failures". Two one-hour lectures, and one precept. K. Noonan, H. Shim ECO 101 - Introduction to Macroeconomics Fall/Spring SA The theory, and some of the evidence, of how and why national economies fluctuate, with periods of boom and bust, and periods of high and low inflation. Substantial emphasis is given to fiscal policy and monetary policy and the ensuing recessions in the US and abroad. Attention is also paid to international economic issues and to problems of economic growth. Special attention will be paid to the effects and implications of the pandemic and its aftermath for the economy and for policy. Two lectures, one precept. A. Blinder, R. Rogerson ECO 202 - Statistics and Data Analysis for Economics Fall/Spring QCR An introduction to probability and statistical methods for empirical work in economics. Descriptive statistics, probability, random variables, sampling, estimation, confidence intervals, hypothesis testing, introduction to the regression model. The class uses STATA as statistical software package. Prerequisite: MAT 103. Two 90-minute classes, one precept. F. Sandomirskiy, U. Mueller ECO 300 - Microeconomic Theory Fall/Spring SA This course builds on your knowledge of microeconomics from ECO 100. The general themes are (1) choices made by individual consumers and firms, (2) equilibrium from the interaction of these choices in markets or similar institutions, and (3) the role of government policy in improving economic outcomes. In each case, the analysis will be more in depth than it was in ECO 100. Some new concepts and techniques will be developed, especially for studying behavior under uncertainty, and strategic interactions (game theory).Prerequisites: 100, MAT 175 or equivalent. Two 90-minute lectures, and one precept. A. Wilson, S. Chassang ECO 301 - Macroeconomics Fall/Spring SA The determinants of national income, unemployment, inflation, interest rates and exchange rates. Includes analyses of business cycles, monetary and fiscal policies, consumption, investment, economic growth, and issues in international monetary macroeconomics. Two lectures, one precept. Prerequisites: ECO100 and ECO101. I. Zaidi ECO 302 - Econometrics Fall/Spring QCR The objective of this course is to prepare students for basic empirical work in economics. In particular, topics will include basic data analysis, regression analysis, testing, and forecasting. Students will be provided with the opportunity to use actual economic data to test economic theories. Prerequisites: 100 or 101, and 202, or ORF 245; MAT 103 or equivalent. Two 90-minute classes and one precept. B. Honoré, M. Plagborg-Moller ECO 310 - Microeconomic Theory: A Mathematical Approach Fall/Spring SA Topics include consumer and firm behavior, market equilibrium, efficiency, an introduction to game theory, and information economics. Uses multivariable calculus and linear algebra to treat the topics in greater depth and to better prepare for advanced courses. Prerequisites: MAT 201 or ECO 201, or instructor permission. Two lectures, one precept. C. Urgun, A. Wilson ECO 311 - Macroeconomics: A Mathematical Approach Spring SA This course examines the determinants of economic growth, business cycle fluctuations, and the conduct of monetary and fiscal policy. The first part of the course develops a framework for the analysis of households' consumption and savings behavior and firms' production decisions, and uses that to analyze long-run growth and financial crises. The second part of the course extends that analysis to examine business cycle fluctuations, including inflation, unemployment. Current issues in macroeconomic and financial policy are discussed throughout. Prerequisites: MAT 201 or ECO 201, or instructor permission. Two lectures, one precept. G. Violante ECO 312 - Econometrics: A Mathematical Approach Fall/Spring QCR Statistical analysis of economic data. The two-variable regression model, multiple regression. Techniques for dealing with violations of the regression model's assumptions, including autocorrelation, heteroscedasticity, specification error, and measurement error. Dummy variables, discrete-choice models, time series models, and forecasting. Introduction to simultaneous equations. Estimation and testing of economic models will be an important part of the course. Prerequisites: MAT 201 or equivalent and ECO 202 or equivalent or instructor permission. MAT 202 is recommended. Two 90-minute lectures, one precept. R. Xu, M. Kolesár ECO 313 - Econometric Applications Spring QCR This course provides hands-on experience in econometric analysis designed to help students to acquire the skills necessary to carry out their own empirical analyses in economics. Various aspects of empirical research in economics will be covered, including development of testable economic models, appropriate use of data, identification and causal inference, and specification and techniques for estimation of econometric models. Prerequisites: 302 or 312; and calculus. Two lectures, one precept. Z. Bleemer ECO 315 - Topics in Macroeconomics Spring SA By extending ECO 300-level macroeconomics, we develop alternative macroeconomic frameworks with financial frictions to understand business cycles, financial crises and public policy. The lecture begins with a historical overview of financial crises and basic financial accelerator models which emphasizes the interaction between borrowing constraint, asset prices and aggregate production. We then introduce financial intermediaries and government to study banking crisis, credit policy and macro prudential policy. Two 90-minute lectures, one precept. N. Kiyotaki ECO 317 - The Economics of Uncertainty Fall SA The microeconomic theory of individual decision making under uncertainty and economic interaction under asymmetric information. Topics include expected utility, value of information, risk-sharing in insurance and asset markets, contracting with moral hazard and adverse selection, and auctions. Applications include health insurance and finance. Prerequisites: 300, MAT 175 or equivalent, and basic probability. Two lectures, one precept. L. Yariv ECO 321 - Firm Competition and Strategy Fall SA An economic analysis of the structure of markets and of corporate behavior. The development and interpretation of public policies, including antitrust legislation and direct regulation related to market structure, corporate mergers, restrictive and discriminatory practices, advertising, and research and development. Two lectures, one class. Prerequisites: 300 or 310, and MAT 175 or equivalent. N. Buchholz ECO 324 - Law and Economics Fall SA An introduction to the economics of law. Application of price theory and welfare analysis to problems and actual cases in the common law - property, contracts, torts - and to criminal and constitutional law. Topics include the Coase Theorem, intellectual property, product liability, deterring crime, incarceration as punishment, and social choice. Prerequisite: ECO 100. Two 90-minute lectures. T. Leonard ECO 326 - Economics of the Internet and Artificial Intelligence: The Digital Revolution Fall SA Using applied microeconomic theory and case studies, this course examines the impact of digital technology on markets. In a connected market, information is freely and instantly available to all participants. We ask how these features affect the way markets function. Topics include the economics of platform markets and multisided markets, the impact of the internet on the news media, education, health care and new industries, such as big-data driven industries, social networks, technological innovation and intellectual property, internet security, privacy and other regulatory issues. S. Bhatt ECO 327 - Firm Competition and Strategy: A Mathematical Approach Spring SA This course considers firms, markets and competition. We will study the theory of industrial organization, focusing on models of the way firms make decisions and compete and the impact of those decisions on market outcomes such as prices, quantities, the type of products offered and social welfare. This is a more math-focused version of ECO 321. For most topics considered, we will write down and solve a model of firm behavior, before considering real-world examples of the phenomenon the model seeks to analyze. We will use the examples to assess the model's ability to capture real-world outcomes. K. Ho ECO 331 - Economics of the Labor Market Not offered this year SA Applies microeconomic analysis to the demand for labor, labor supply, and the determination of wages. Examines investments in human capital, unemployment, discrimination, unions, government intervention in the labor market. Empirical findings as well as theoretical models are studied. Prerequisites: 100, 302, and MAT 175 or equivalent. Two lectures, one precept. Staff ECO 332 - Economics of Health and Health Care (also GHP 332) Spring SA This course will provide an opportunity to apply the concepts and methods studied in economics core courses to analyze selected topics in health economics. Topics will change from year to year. Prerequisites depend on topic. Two 90-minute lectures and one precept. K. Noonan ECO 341 - Public Finance Not offered this year SA This course develops a conceptual framework for examining government taxing and spending, and uses this framework to analyze current public policy issues. We focus on both the efficiency and equity aspects of the government. Staff ECO 342 - Money and Banking Fall SA This course explores the role that money, financial markets and institutions, and monetary policy play in shaping the economic environment. The class investigates why these markets and institutions arise and may lubricate the resource allocation analytically (rather than descriptively), using tolls of economic theory. Two lectures, one class. M. Brunnermeier ECO 351 - Economics of Development Not offered this year SA Surveys development economics including current issues, historical background, growth theories, trade and development, markets and planning, strategies for poverty alleviation, agriculture, technology, employment, industry, population, education, health, and internal and external finance. Selective attention to particular countries and regimes. Prerequisites: 101 and 300 or 310, or instructor's permission. Two lectures, one precept. Staff ECO 353 - International Monetary Economics Spring SA Foreign exchange markets and balance-of-payments accounts. Effects of incomes, prices, interest rates, and exchange rates on trade and capital flows. Effects of exchange rate arrangements and capital mobility on macroeconomic policies. Current policy issues: exchange rate management, macroeconomic policy coordination, managing currency crises, the roles of international institutions. I. Zaidi ECO 361 - Financial Accounting Spring SA The course deals with the judgments required to analyze and communicate information about economic events of a firm through financial accounting. The first several classes deal with concepts of asset, liability, owners' equity, revenue, expense and the accounting processes that lead to the financial statements. Next follows an analysis of the components of financial statements: long-term liabilities, revenue recognition and income management, inventories, long-term assets, impairment and leasing chaos, off-balance sheet financing, and current controversies such as income tax inversions. Rudiments of financial analysis and valuation. D. Byard ECO 362 - Financial Investments Fall SA A survey of the field of investments with special emphasis on the valuation of financial assets. Issues studied include how portfolios of assets should be formed, how to measure and control risk, how to evaluate investment performance, and how to test alternative investment strategies and asset pricing models. Prerequisites: ECO 202, ECO 310 and MAT 175 or equivalent. ECO 202 or equivalent may be taken concurrently, but students would remain responsible for statistical concepts as they arise in this course. Two lectures, one precept. M. Yogo ECO 363 - Corporate Finance and Financial Institutions Spring SA Investigates the financing decisions of companies and financial institutions in the wider context of the workings of financial markets. Topics include capital budgeting, capital structure choice, risk management, liquidity, corporate governance, and the interactions between corporate finance and the workings of financial institutions and markets. Prerequisite: ECO 362. Two lectures, one precept. D. Chen ECO 371 - Topics in Country and Regional Economics (also LAS 346) Not offered this year SA These courses will provide an opportunity to apply the concepts and methods studied in economics core courses and electives to analyze the economic problems confronting particular countries or groups of countries. The choice of the country or region, and of the economic problem, will change from year to year. Prerequisites depend on topic. Two 90-minute lectures. Staff ECO 372 - Economics of Europe (also EPS 342) Fall SA Europe is at a crossroads. Political and economic integration in the European Union (EU) exceeds levels reached in the rest of the world. Economic integration affects trade, migration, agriculture, competition, regions, energy and money. Most euro area economies have been struggling with interlocking crises involving debt, banking and growth, which challenge the viability of monetary union. The EU is now facing a migration crisis. This course studies economic integration in Europe, the ongoing crises, and economic challenges facing EU member countries. It uses economic analysis to study policy issues. Two 90-minute lectures. S. Weyerbrock ECO 379 - The Chinese Economy (also EAS 346) Not offered this year SA Economic analysis of the Chinese economy after 1949. Economic planning, economic reform, economic growth and fluctuations, consumption, environmental problems, population and human capital, banking and financial systems, foreign trade and investment, legal and political systems and current issues. Prerequisites: 100 and 101. Two 90-minute lectures one preceptorial. Staff ECO 385 - Ethics and Economics (also CHV 345) Spring EM An introduction to the ethics of market exchange and of economic regulation intended to promote ethical goals. We ask how ethical commitments evolve, and how they influence competition and cooperation. We consider the moral dimension of outsourcing, sweatshops, wage gaps, price gouging, price discrimination, time-inconsistent preferences and policies that exploit them ("nudging"), trade in repugnant goods (such as human organs), poverty, and the inequality of income and health. Prerequisite: ECO 100. Two 90-minute lectures. T. Leonard ECO 386 - History of Economic Thought Not offered this year HA A survey of the history of economics, with emphasis on the origins, nature, and evolution of leading economic ideas. This course will situate economic ideas in their historical context, from Aristotle to early 20th century writers, to provide a deeper understanding of economic life and theories of it, emphasizing foundational issues such as the nature of human action and the social good; the role of the state in the economy; and the social and economic consequences of property, prices, money, production, trade and other defining attributes of commercial society. Two 90-minute lectures. Prerequisite: ECO 100. Staff ECO 416 - Fintech Fall This course studies the impact of recent technological innovations in the financial sector. We will first study the microeconomic principles of using big data to design credit rating systems, financial platforms, digital tokens, and smart contracts. We will then study a range of applications such as peer-to-peer lending, cryptocurrency valuation, crowdsourcing, micro-credit, green contracting and central bank digital tokens. Finally, we will study the macroeconomic impact of fintech on the broader economy. J. Payne ECO 418 - Strategy and Information Fall SA Explores basic themes in modern game theory and information economics. Non-cooperative solution concepts for games will be developed and applied to the study of repeated games and dynamic interaction in oligopolistic industries, reputation formation, auctions, and bargaining. Prerequisites: MAT 175 or MAT 201, or equivalent. Some basic knowledge of probability theory is assumed. Two lectures, one precept. F. Gul ECO 448 - Economics and Politics Not offered this year SA Questions at the intersection of politics and economics will be analyzed using economic methods. Particular emphasis will be placed on mathematical and game theoretic methods. The course will cover economic models of political institutions, such as elections or political parties. Topics include lobbying and interest groups, political business cycles, economic reform, and the size of government. Two 90-minute lectures. Prerequisite: MAT 203 or equivalent, or permission of instructor. Staff ECO 461 - Entrepreneurial Finance, Private Equity and Venture Capital Spring This course will explore how technology-based start-up ventures are founded, managed and financed. Specific emphasis will be put on the early stages of development. The goal is to offer perspectives on the "two sides of the coin": the entrepreneur's perspective and the financier's perspective and in particular the venture capitalist. G. Schwed, P. Chamberlain ECO 462 - Portfolio Theory and Asset Management Fall SA This course studies the asset allocation decisions and overall management of the risk and return characteristics of portfolios. It focuses on quantitative approaches to portfolio optimization, including dynamic strategies to control risks and to achieve investment goals; empirical studies of asset returns; and the money management industry. Prerequisites: ECO 202 or ORF 245; ECO 310; ECO 362 (no exceptions). Two 90-minute lectures, one precept. Staff ECO 463 - International Financial Markets Not offered this year SA A study of the assets and institutions of international financial markets. A key difference between these markets and others is the role of exchange rates relating the value of two or more national currencies. The course studies the market-making institutions, the market conventions and market practices as well as the interrelationships between different assets, their pricing, their trading and their use by corporations. Prerequisites: MAT 175 and ECO 202 or equivalent. Two 90-minute lectures. Staff ECO 464 - Corporate Restructuring Spring SA This course concerns the motives and methods of corporate actions such as dividend payments, share repurchases, recapitalizations, acquisitions, divestitures, joint ventures, with a focus on the implications of such actions for the prices of a corporation's publicly traded securities. The course should be of particular interest to students considering a career in financial services. Introductory courses in micro economics, investments, and probability and statistics are prerequisites. One 3-hour seminar. Staff ECO 466 - Fixed Income, Options and Derivatives: Models and Applications Spring SA A study of models for the term structure of interest rates, bond prices and other contracts such as forwards and futures, swaps and options. The course develops the theory of arbitrage-free pricing of financial assets in continuous time, as well as special models that can be used to price and hedge fixed income securities. Prerequisites: ECO 362 (or FIN 501) and ECO 465. One three-hour lecture, one precept. Y. Aït-Sahalia, C. Ibsen Rodrigues de Almeida ECO 467 - Institutional Finance, Trading, and Markets Spring The way in which financial markets work and securities are traded can often not be reconciled with the notion of a frictionless and self-equilibrating market. In this course, we try to account for this fact and cover important theoretical concepts and recent developments in market microstructure, asset pricing under asymmetric information, financial intermediation, and behavioral finance. Topics include market efficiency, market making, financial regulation, asset price bubbles, herding, and liquidity crises. Prerequisites: 300 or 310. M. Lee ECO 468 - Behavioral Finance Spring This course discusses how inefficiencies arise due to psychology and limits to arbitrage. The psychology of investors shapes their preferences and may impair judgment. Whether these psychological factors have an impact on financial markets ultimately depends on arbitrageurs' ability to fight against mispricing. These issues will be covered through lectures and exercises that will foster discussions about cognitive illusions and speculative bubbles. Prerequisite: 300 or 310. 362 recommended. Staff ECO 491 - Financial Risk Management Fall This course will teach students about financial risk management through the lens of the financial crisis that began in August 2007. Topics covered will include market risk, credit risk, liquidity risk, and systemic risk. Students will draw on their background in economics, finance, probability theory and statistics. The class will be in seminar format and active participation in the discussion is encouraged. Prerequisites: 362 and 465. C. Ibsen Rodrigues de Almeida ECO 492 - Asian Capital Markets Spring SA The course explores the increasing weight of Asia in global financial markets. It frames the discussion in the context of the globalization of financial markets, with emphasis on concepts of economic development, institutional reform of markets, and public and private market investments. Discussions combine analysis of historical trends and recent events with insights from practical experience in Asian markets. Particular focus is devoted to China and Japan. The course explicitly considers China's gradual shift toward a capital market-based financial system and prospects for the development of the renminbi into an international currency. J. de Swaan ECO 493 - Financial Crises Spring This course will use economic theory and empirical evidence to study the causes of financial crises and the effectiveness of policy responses to these crises. Particular attention will be given to some of the major economic and financial crises in the past century and to the crisis that began in August 2007. Prerequisite: 202 or equivalent, and 310. C. Wilkins ECO 494 - Chinese Financial and Monetary Systems Fall SA With its rapid economic growth in the past three decades, China already has the world's second largest economy. Meanwhile its financial markets are also being quickly liberalized and integrated with the rest of the world. As the current trend continues, there are growing interests to learn and understand the workings of China's financial and monetary systems. This course aims to serve this objective with a particular emphasis on understanding the role provided by the financial system in facilitating China's economic development, in addition to the investment opportunities and risk presented by the system to the outside world. W. Xiong ENV 304 - Disease Ecology, Economics, and Policy (also ECO 328/EEB 304/SPI 455) Fall SEN The dynamics of the emergence and spread of disease arise from a complex interplay among disease ecology, economics, and human behavior. Lectures will provide an introduction to complementarities between economic and epidemiological approaches to understanding the emergence, spread, and control of infectious diseases. The course will cover topics such as drug-resistance in bacterial and parasitic infections, individual incentives to vaccinate, the role of information in the transmission of infectious diseases, and the evolution of social norms in healthcare practices. One three-hour lecture, one preceptorial. C. Metcalf ORF 335 - Introduction to Financial Mathematics (also ECO 364) Spring QCR Financial Mathematics is concerned with designing and analyzing products that improve the efficiency of markets, and create mechanisms for reducing risk. This course develops quantitative methods for these goals: the notions of arbitrage and risk-neutral pricing in discrete time, specific models such as Black-Scholes and Heston in continuous time, and calibration to market data. Credit derivatives, the term structure of interest rates, and robust techniques in the context of volatility options will be discussed, as well as lessons from the financial crisis. Prerequisites: ORF 309, ECO 100, and MAT 104. Two lectures, one precept. Staff POL 347 - Game Theory in Politics (also ECO 347) Spring QCR An introduction to the use of mathematical models and, especially, game theory in the study of politics. The basics of game theory are presented through applications to a broad range of political phenomena: voting, legislative politics, political campaigns, comparison of electoral systems, the evolution of cooperation, and international relations. Two lectures, one preceptorial. M. Iaryczower SPI 306 - Environmental Economics (also ECO 329/ENV 319) Fall SA An introduction to the use of economics in thinking about and dealing with environmental issues. Stress on economic externalities and the problem of dealing with them as instances of organizing gains from trade. Applications to a wide variety of problems, among them air pollution (including, importantly, global climate change), water pollution, solid waste and hazardous substances management, species preservation, and population policy. S. Brunnermeier SPI 309 - International Trade (also ECO 352) Not offered this year SA Examination of the causes and economic consequences of international trade in goods and services, investment and migration. Stress on the possibility of aggregate national gains from trade, and the distributional conflicts generated by trade. Analysis of policies regarding these issues from the perspective of economics and political economy. Two lectures, one preceptorial. Prerequisites: WWS 100 or ECO 300 or ECO 310. Staff SPI 406 - Issues in Environmental and Natural Resource Economics (also ECO 429) Not offered this year SA Course introduces use of economics in understanding both the sources of and the remedies to environmental and resource allocation problems. It emphasizes the reoccurrence of economic phenomenon like public goods, externalities, market failure and imperfect information. Students learn about the design and evaluation of environmental policy instruments, the political economy of environmental policy, and the valuation of environmental and natural resource services. These concepts are illustrated in a variety of applications from domestic pollution of air, water and land to international issues such as global warming and sustainable development. S. Brunnermeier
