kila's changes

Economics

Directors of the Undergraduate Program: Robert E. Lucas, Jr., SS 410,

702-8179; D. Gale Johnson, SS 421, 702-8251

Associate Director of the Undergraduate Program: Grace Tsiang, SS 508, 702-3410

Administrative Assistant: Julie Less, SS 412, 702-8254

Program of Study

The Bachelor of Arts program in economics is intended to equip students with the basic tools required to understand the operation of a modern economy: the origin and role of prices and markets, the allocation of goods and services, and the factors that enter into the determination of income, employment, and the price level.

Bachelor of Arts Program Requirements

The Bachelor of Arts concentration in economics requires thirteen courses. These must include the core curriculum, which consists of price theory (Economics 200, 201) and macroeconomics (Economics 202 and 203). One course in economic history (Economics 221, 222, 223, 225, or 228) and two courses in econometrics are also required; the latter requirement is normally met by Statistics 220 and Economics 210.

Some students decide after taking Economics 198-199 (Introduction to Micro and Macroeconomics for Nonmajors) that they would like to concentrate in economics. These students must take Economics 200, 201, and 202. The directors of the undergraduate program will consider petitions to waive the requirement of Economics 203 for students who have taken Economics 198-199 before all the Economics 200-201-202 courses. Petitions by students taking Economics 198-199 after any of the other Economics 200-202 courses will not be considered.

Students concentrating in economics must also take three mathematics courses beyond the Common Core requirement. These consist of the third quarter of calculus (Mathematics 133, 153, or 163) and either Mathematics 195-196 or Mathematics 203-204.

In addition to the ten courses listed in the previous paragraphs, students concentrating in economics are required to take three elective courses, two of which must be in economics. The third elective also may be in economics, or it may be chosen from Mathematics 203, 204, 205, 207, 208, 209, and 273 (or other courses in mathematics as may be approved by the directors of the undergraduate economics program); Computer Science 105 and 115; or an additional course in statistics (other than Statistics 200). Only one reading course (Economics 298) may be used as an elective (unless the student is in the honors program).

NOTE: Students wishing to substitute other courses for those listed in the previous paragraphs must obtain written permission from one of the directors of the undergraduate economics program before registering for the course.

As college calculus is a prerequisite for the core curriculum (Economics 200-201-202-203), it is strongly recommended that students complete the calculus sequence during their first year in the College. It is further recommended that students complete their remaining mathematics requirements during their second year, and the econometrics requirement in the third year. Registration in graduate 300-level courses is by invitation only.

Summary of Requirements

General College calculus sequence (Math 131-132,

Education 151-152, or 161-162)

Concentration 1 Math 133, 153, or 163

4 Econ 200-201-202-203

1 economic history (Econ 221, 222, 223, 225, 228)

2 Stat 220 and Econ 210

2 Math 195-196 or 203-204

3 electives: These must include two additional courses in economics. The third course may also be a course in economics or may be chosen from Math 203, 204, 205, 207, 208, 209, and 273; ComSci 105 and 115; or any course in statistics or econometrics other than Stat 200.

Grading. A maximum of two grades of Pass is permitted in the thirteen courses required for the concentration in economics; the other eleven grades must be quality grades. Only quality grades are acceptable for Economics 200, 201, 202, 203, and 210; and Statistics 220.

Honors. Students with grade point averages of at least 3.0 overall and 3.25 in economics are eligible for the honors program. Students who wish to qualify for honors are required to participate in the Undergraduate Honors Workshop (Economics 297) for a full academic year; Economics 297 may replace up to two elective courses. While participating in that workshop, students write an honors thesis under faculty guidance; to graduate with honors, students must receive a grade of at least A- on the honors thesis. Students interested in the honors program should contact one of the directors of the undergraduate economics program no later than the second quarter of their third year in the College; they should also have completed their econometrics courses before participation in the Undergraduate Honors Workshop.

Joint B.A./M.A. Program Requirements

The joint B.A./M.A. program is available to students who, in the economics core curriculum and mathematics courses, have demonstrated exceptional promise for advanced work. The program requires preparedness for graduate study after the third year; therefore, the department is extremely selective of students applying to this program. In the joint B.A./M.A. program, students can substitute up to five graduate courses in economics for required B.A. concentration courses, except for the four core courses (Economics 200-201-202-203).

Eligibility and Admission. Interested students should consult with one of the directors of the undergraduate economics program during their second year in the College and subsequently meet with one of the directors to determine if the joint B.A./M.A. program is appropriate for them. As careful planning of their programs is essential, students should apply for admission to the program early in their third year in the College. Applicants are required to complete the standard application for admission to graduate study in the Division of the Social Sciences; submission of a transcript and letters of recommendation is also required. Graduate Record Examination scores are not required. If admitted, students have joint residency in the College and the Division of Social Sciences during the last three quarters of the program.

Requirements and Suggested Course Programs. All specific requirements for the B.A. program in economics must be met; in addition, all students in the joint B.A./M.A. program must register as graduate-degree candidates for no less than nine graduate economics courses, no more than three of which may be taken in any given quarter. Normally, these courses are taken after the student has been admitted to the joint B.A./M.A. program. The requirements for the M.A. degree in economics are summarized below:

1. Registration in nine graduate-level courses in economics, which must include Economics 300, 310, and 330. At least five of the nine graduate course grades must be B or better.

2. Two courses in a field described in "Fields of Economics for the M.A. and Ph.D. Degrees" to be found in the brochure Department of Economics, The University of Chicago.

3. Passing one preliminary examination at the M.A. level (or higher). Normally, this examination is in the field referred to in item (2), but it also can be an M.A. Pass on the Ph.D. core examination.

Faculty

FERNANDO ALVAREZ, Assistant Professor, Department of Economics and the College

GARY S. BECKER, University Professor, Departments of Economics and Sociology; Research Associate, Economics Research Center at the National Opinion Research Center

XIAOHONG CHEN, Assistant Professor, Department of Economics and the College

PIERRE ANDRE CHIAPPORI, Professor, Department of Economics and the College

MICHAEL CHWE, Assistant Professor, Department of Economics and the College

ROBERT W. FOGEL, Charles R. Walgreen Professor, Department of Economics and Graduate School of Business; Director, Center for Population Economics

DAVID GALENSON, Professor, Department of Economics and the College

MAITREESH GHATAK, Assistant Professor, Department of Economics and the College

LARS PETER HANSEN, Homer J. Livingston Professor, Department of Economics and the College

JAMES J. HECKMAN, Henry Schultz Professor, Department of Economics, Irving B. Harris Graduate School of Public Policy Studies, and the College; Research Associate, Economics Research Center at the National Opinion Research Center

D. GALE JOHNSON, Eliakim Hastings Moore Distinguished Service Professor Emeritus, Department of Economics and the College

EKATERINI KYRIAZIDOU, Assistant Professor, Department of Economics and the College

STEVEN LEVITT, Assistant Professor, Department of Economics and the College

ROBERT E. LUCAS, JR., John Dewey Distinguished Service Professor, Department of Economics and the College

HOWARD MARGOLIS, Professor, Irving B. Harris Graduate School of Public Policy Studies and the College

DAVID MELTZER, M.D., Assistant Professor, Department of Economics, Irving B. Harris Graduate School of Public Policy Studies, Department of Medicine

DEREK NEAL, Associate Professor, Department of Economics and the College

JOSEF PERKTOLD, Assistant Professor, Department of Economics and the College

TOMAS PHILIPSON, Associate Professor, Department of Economics and the College

SHERWIN ROSEN, Edwin A. and Betty L. Bergman Professor, Department of Economics and the College; Research Associate, Economics Research Center at the National Opinion Research Center

ALLEN SANDERSON, Senior Lecturer in the College

THOMAS SARGENT, David Rockefeller Professor, Department of Economics and the College

JOS&EACUTE; SCHEINKMAN, Alvin H. Baum Professor, Department of Economics and the College; Chairman, Department of Economics

LARRY A. SJAASTAD, Professor, Department of Economics and the College

NANCY STOKEY, Frederick H. Prince Professor, Department of Economics and the College

LESTER G. TELSER, Professor, Department of Economics and the College

GEORGE S. TOLLEY, Professor, Department of Economics

ROBERT M. TOWNSEND, Charles E. Merriam Professor, Department of Economics and the College

GRACE TSIANG, Senior Lecturer in the College; Associate Director, Undergraduate Program

DAVID WEIR, Visiting Associate Professor, Department of Economics and the College

YORAM WEISS, Visiting Professor, Department of Economics and the College

MEHMET YORUKOGLU, Assistant Professor, Department of Economics and the College

Courses

198. Introduction to Microeconomics (for Nonmajors). By way of economic theory, applications, and contemporary issues, the course treats (1) the behavior and decision making on the part of individuals, business firms, and governments; and (2) the function of costs, prices, incentives, and markets in the American economy. A. Sanderson. Autumn.

199. Introduction to Macroeconomics (for Nonmajors). Via theory, public policy applications, and basic economic reasoning, the course covers current major domestic and international macroeconomic issues in the U.S. economy, including the determination of income and output, inflation, unemployment, and economic growth; money and banking; federal spending, taxation, and deficits; and international trade, exchange rates, and the balance of payments. A. Sanderson. Winter.

200. The Elements of Economic Analysis I. PQ: One year of calculus. This course develops the economic theory of consumer choice. This theory characterizes optimal choices for consumers given their incomes, their preferences, and the relative prices of different goods. The course develops tools for analyzing how these optimal choices change when relative prices and consumer incomes change. Finally, the course presents several measures of consumer welfare. Students learn how to evaluate the impact of taxes and subsidies using these measures. If time permits, the course examines the determination of market prices and quantities, given primitive assumptions concerning the supply of goods. M. Ghatak, D. Neal, Autumn; T. Philipson, Staff, Spring.

201. The Elements of Economic Analysis II. PQ: Econ 200. This course is a continuation of Econ 200. The first part discusses markets with one or a few suppliers. The second part focuses on demand and supply for factors of production and the distribution of income in the economy. The course also includes some elementary general equilibrium theory and welfare economics. Staff, Autumn; J. Perktold, Staff, Winter.

202. The Elements of Economic Analysis III. PQ: Econ 200. As an introduction to macroeconomic theory and policy, this course covers the determination of aggregate demand (consumption, investment, and the demand for money), aggregate supply, and the interaction between aggregate demand and supply. The course also discusses activist and monetarist views of fiscal and monetary policy. R. Lucas, M. Yorukoglu, Staff, Winter; M. Yorukoglu, Staff, Spring.

203. The Elements of Economic Analysis IV. PQ: Econ 202 or equivalent. This is a course in money and banking, monetary theories, the determinants of the supply and demand for money, the operation of the banking system, monetary policies, financial markets, and portfolio choice. Staff, Autumn; F. Alvarez, Staff, Spring.

206. Topics in Mathematical Economics. PQ: Econ 200 and 201, and Math 196. This course focuses on three topics in economic theory: signaling models, auction theory, and poverty traps in models of economic growth. N. Stokey. Winter.

209. Introduction to Econometrics: Honors. PQ: Stat 220 or 245. This is a foundations course in econometrics for students planning to continue their study at the graduate level. Students wanting to continue with Econ 211 are strongly encouraged to take Econ 209. G. Tsiang. Autumn.

210. Econometrics A. PQ: Econ 201 and 202, Stat 220, and Math 196 or 250. Econometrics A covers the single and multiple linear regression model, the associated distribution theory and testing procedures; corrections for heteroskedasticity, autocorrelation, and simultaneous equations; and other extensions as time permits. Students also apply the techniques to a variety of data sets using PCs. Staff, Autumn; X. Chen, Winter; G. Tsiang, Spring.

211. Econometrics B. PQ: Econ 209 or 210. This course covers topics in econometrics, such as generalized least squares, hypothesis testing, errors in variables, prediction, simultaneous equation models, time-series models, and discrete choice models. E. Kyriazidou. Spring.

221/321. Colonization, Servitude, and Slavery: The Early American Experience. PQ: Econ 200. This course considers economic analysis of the early American labor market, drawing on new research on the economic and social history of the colonies. Topics include the English background and economic stimulus to colonization, economics of the Jamestown experiment, mortality in the early colonies, the economics of white indentured servitude, opportunities for immigrants, the economics of the transatlantic slave trade, the growth of black slavery, and the wealth of the colonies. D. Galenson. Winter.

222/320. Topics in American Economic History. PQ: Econ 200. Economic analysis is applied to important issues in American economic history. Specific topics vary, but typically include the economics of colonization, the transatlantic slave trade, the role of indentured servitude and slavery in the colonial labor market, the record and sources of nineteenth-century economic growth, economic causes and effects of nineteenth-century immigration, the expansion of education, the economics of westward migration, determinants of long-run trends in the distribution of income and wealth, the quantitative analysis of social mobility, and the economics of racial discrimination in the twentieth-century South. D. Galenson. Autumn, Spring.

223/323. Business Ethics in Historical Perspective. This course examines the way that religious and political movements affect the ethics of business, focusing on such current issues as the conflict between technical efficiency and morality, the ethical status of property rights, the politics of retirement and intergenerational equity, comparable worth and other conflicts between ethical and economic standards for compensation, the ethics of international trade and finance, and ex post redefinitions of the legal status of de facto business practices. These issues are put into historical perspective by relating them to long cycles in religiosity in the United States, to the long-term factors influencing political images of business, and to the factors influencing domestic conceptions of the proper economic relationships between the United States and the rest of the world. R. Fogel. Winter.

225/322. Population and the Economy. PQ: Bus 300 or consent of instructor. This course deals with the effects of swings in population on the stability of the economy and opportunities for business. In both the short run and the medium run, shifts in the demographic rates probably have been more destabilizing than unwise macroeconomic policy or abrupt political realignments. Population change is thus a major challenge to policy makers in business and in government. Topics include the effects of demographic changes on markets for labor and capital, on savings rates and the structure of investment, on taxes and government expenditures, and on household behavior. Problems of planning for the consequences of population changes, including methods of forecasting, are also considered. R. Fogel. Autumn.

227/324. Economics and Demography of Marketing. PQ: Econ 200 and 201 or equivalent. This course examines the factors that influence long-term, intermediate-term, and short-term variations in the demand for both consumer and producer commodities and services: the evolution of markets and methods of distribution in America since 1800, variations in the life cycles of products, the role of demographic factors in analysis of product demand, and the influence of business cycles on product demand. Much attention is given to the use of existing on-line databases for the estimation of a variety of forecasting models. NOTE: This course does not satisfy the economics history requirement. R. Fogel. Spring.

228. European Economic History. PQ: Econ 200. This course is an introduction to major themes in the economic history of Western Europe, emphasizing the economic analysis of institutions and institutional change, population, technology, and political economy. Specific topics include the economics of feudalism; the Black Death; monetary policy and public finance in the formation of national states; the development of markets; revolutions (demographic, agricultural, industrial, and political); international trade; the gold standard; convergence, divergence, and rivalry in economic growth; and economic instability in the interwar period. D. Weir. Winter.

231. Topics in Macroeconomics and Finance. PQ: Econ 201 and 203 required. Econ 210 and 211 recommended. The goal of the course is for students to use and analyze data to verify or refute an economic hypothesis. Lecture topics include the formulation of an economic hypothesis; the translation of an economic hypothesis into a statistical hypothesis; the gathering of data from the Internet and other sources; and the analysis of counterarguments using regression, instrumental variable, and dummy variable techniques. Examples are drawn mainly from macroeconomics. Writing the term paper can be an excellent start on a senior honors paper. C. Mulligan. Not offered 1997-98; will be offered 1998-99.

232. The Economics of Crime (=Econ 232, PubPol 232). PQ: Econ 199 or 201 required; Stat 220 or Econ 210 recommended. This course uses theoretical and empirical economic tools to analyze a wide range of issues related to criminal behavior. Among the topics discussed are the police, prisons, gang behavior, guns, drugs, capital punishment, labor markets and the macroeconomy, income inequality and poverty, and the role of communities. Special emphasis is devoted to analyzing the optimal role for public policy. S. Leavitt. Autumn.

240. Introduction to Labor Economics. PQ: Econ 201. Course topics include labor supply and the allocation of time, the demand for labor, labor market equilibrium, human capital, discrimination, unemployment, and unions. Y. Weiss. Winter.

250. Topics in Finance and Uncertainty. PQ: Econ 201. This course describes the foundations of decision theory under uncertainty; the notion of expected utility, the definition and measure of risk aversion, and the formalization of demand for insurance. It analyzes the role of markets in the efficient allocation of risk within an economy, with special emphasis on financial assets. Finally, a brief introduction to the literature on asymmetric information is provided. Staff. Autumn, Spring.

251. Introduction to Finance. PQ: Econ 201. This course describes the foundations of decision theory under uncertainty: the notion of expected utility, the definition and measure of risk aversion, and the formalization of demand for insurance. It analyzes the role of markets in the efficient allocation of risk within an economy with a special emphasis on financial assets. Finally, a brief introduction to the literature on asymmetric information is provided. P. Chiappori. Winter.

255. Topics in Economic Growth and Development. PQ: Econ 200, 201, 202, 203, and 210. This class examines international disparities in economic growth and explores a variety of underlying factors, such as trade, agriculture, and resource endowments. Models of aggregate growth and of microeconomic behavior in developing nations are examined. G. Tsiang. Autumn.

256. Problems of Economic Policy in Developing Countries (=Econ 256, PubPol 286/375). PQ: Econ 201 and 202, or consent of instructor. This course focuses on the application of economic analysis to economic policy issues frequently encountered in developing countries. Topics include sources of economic growth, commercial policy, regional economic integration, inflation and stabilization, fiscal deficits, the choice of an exchange rate regime, and the international debt problem. L. Sjaastad. Winter.

257. Topics in Chinese Economy. PQ: Knowledge of basic microeconomics, macroeconomics, and econometrics. In this course, students learn to modify standard economic theory to study the Chinese economy. First, we briefly review the economic situation from 1949 to 1976. Next, we study the evolutionary process of Chinese economic reform since 1978. Last, we point out the difficulties preventing further reforms. Students apply simple econometric techniques to analyze certain aspects of the reform. X. Chen, D. G. Johnson. Spring.

258. Korean Economy. PQ: Econ 201 and 203, or consent of instructor. This course is concerned with understanding the nature of the Korean economy by studying five of its aspects: (1) its current status, (2) its patterns of transformation since the Korean War, (3) its current problems, (4) its projected evolution, and (5) its relevance to the understanding of other economies. Staff. Spring.

260. Introduction to Public Finance. PQ: Econ 201. This course examines the theory of taxation and the application of this theory to the U.S. tax system, with an emphasis on recent research and on the entire economy, not just on individual markets. Staff. Autumn.

261. Economic Analysis and Public Policy. PQ: Econ 201. This course investigates the political economy of public policies designed to solve a selected group of problems. Policy or program objectives are related to the problems that generated the policy action. Both intended and unintended effects of policy actions are considered. Among the effects that are analyzed are the supply of a good or service, the distribution of benefits and gains, and the distribution of costs. Problems are chosen from topics such as housing, education, transportation, pollution, zoning, and health. D. G. Johnson. Spring.

264. Urban Development and Public Policy (=Econ 264, PubPol 249). PQ: Econ 200 and Stat 220, or consent of instructor. This course builds a broad understanding of the economic forces that impact cities and the major determinants of urban development. The location decisions of both firms and households and the key factors determining metropolitan growth are examined. Policy topics include incentives for economic development, housing market discrimination, housing assistance, land use regulation, competition among local governments, and the problems of central cities. D. DiPasquale. Winter.

265. Environmental Economics (=Econ 265, EnvStd 265). PQ: Econ 201 or consent of instructor. The course applies price theory to the following environmental issues: externalities, distorted incentives, and the market's failure to yield optimal outcomes. Topics include taxes, subsidies, and quotas as solutions to these problems; welfare and efficiency implications; property rights and fisheries; exhaustible and renewable resources; evaluating environmental regulation; government as an autonomous maximizing agent; and divergence between social and governmental interests. Staff. Spring.

266. Urban Economics (=Econ 266, Geog 266/366, PubPol 245). PQ: Econ 201. This course deals with the economics of spatial processes and structures within the city: residential location, employment location, and spatial-temporal change. The following topics are also considered: spatial aspects of the public economic activity within a city and relationships between central cities and their suburbs; externalities in cities; and the geographical structure of Third World cities. G. Tolley. Winter.

267. Introductory Game Theory. PQ: Econ 201 and Math 195 or Math 250. This course introduces the key ideas of game theory and explores their applications in economics and the other social sciences. The goal is for students to both understand basic game-theoretic models and also be able to build models of their own. No previous experience with game theory is necessary. M. Chwe. Autumn.

269. Public Choice (=Econ 269, PolSci 235, PubPol 258). PQ: Knowledge of microeconomics. This course is an introduction to major ideas in the literature that seeks to apply the economic notion of rational choice to the context of politics and social choice. Some of the authors covered are Samuelson, Arrow, Buchanan, Olson, and Downs. H. Margolis. Winter.

270. Introduction to International Economics (=Econ 270, PubPol 270). PQ: Econ 201 and 202, or consent of instructor. This course deals with the pure theory of international trade: the real side of international economics. Topics include the basis for and gains from trade; the theory of comparative advantage; effects of international trade on the distribution of income, tariffs, and other barriers to trade; and the role of exchange rates. L. Sjaastad. Autumn.

277. Health Economics and Public Policy (=Econ 277, PubPol 283/383). PQ: Econ 201 or higher and consent of instructor. This course analyzes the economics of health care in the United States with particular attention paid to the role of government. The first part of the course examines the demand for health care and the structure and consequences of public and private health insurance. The second part of the course examines the supply of health care, including professional training, licensure, specialization and compensation, hospital competition and finance, and the determinants and consequences of technical change in medicine. The course concludes with an examination of recent proposals and initiatives for health care reform. D. Meltzer. Spring.

278. Public Policy Analysis (=Econ 278, PubPol 222). PQ: Econ 200. PubPol 221-222-223 may be taken in sequence or individually. This course extends the analytic tools developed in Econ 200. Emphasis is placed on the limitations of economic analysis, as well as the interplay between economic and political issues. D. DiPasquale. Winter.

280. Introduction to Industrial Organization. PQ: Econ 201. This course deals with the organization of economic activity. Topics include the economics of property rights, the theory of regulation, economics and the law, and antitrust policy. Applied problems are stressed. Staff. Spring.

281. The Economics of Sports. PQ: Econ 201. This is a course in microeconomics that applies traditional product and factor market theory and analysis to contemporary economic issues in professional and college athletics, including: the sports business; market structures and outcomes; the market for franchises; barriers to entry, rival leagues, and expansion; cooperative, competitive, and collusive behavior among participants; player productivity and compensation; racial discrimination; antitrust legislation; and financing of and subsidies for stadiums. A. Sanderson. Not offered 1997-98; will be offered 1998-99. Spring.

297. Undergraduate Reading and Research. PQ: Consent of directors of the undergraduate program. Students are required to submit the College Reading and Research Course Form. Available for either Pass or letter grading. D. G. Johnson, R. Lucas. Autumn, Winter, Spring.

298. Undergraduate Honors Workshop. PQ: Consent of instructor. Must be taken for a letter grade. D. G. Johnson. Autumn, Winter, Spring.