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Economics

Chair: Jonathan S. Skinner

Vice Chair: Bruce I. Sacerdote

Professors P. M. Anderson, D. G. Blanchflower, W. A. Fischel, A. L. Gustman, D. A. Irwin, M. G. Kohn, N. P. Marion, B. I. Sacerdote, A. A. Samwick, J. T. Scott, J. S. Skinner, C. M. Snyder, D. O. Staiger, S. F. Venti; Associate Professors E. V. Edmonds, A. Lusardi, N. Pavcnik; Assistant Professors D. Bhattacharya, M. De Santis, J. D. Feyrer, J. C. Shambaugh, J. Zinman; Visiting Professor A. Bar-Ilan; Visiting Associate Professor M. Das, W. H. Gick; Visiting Assistant Professors A. Bentz, S. E. Carrell, M. Chang, P. Chaudhury, E. Gick, J. M. Giummo, K. V. Simons; Visiting Senior Lecturer M. B. Rose.

REQUIREMENTS FOR THE MAJOR

Prerequisites: Economics 1 and 10, with an average grade no lower than C, and Mathematics 3. (A student who fails to achieve the minimum grade average for the prerequisites may, with the permission of the Vice Chair, substitute grades in Economics 21 and 20 for those in Economics 1 and 10, respectively. Another statistics course may be substituted for Economics 10 with permission of the Vice Chair.)

Requirements: Nine courses in addition to the prerequisites, with a GPA for these nine courses of no less than 2.0. The nine courses must include the following:

1. Economics 20, 21, and 22

2. Any two of the following sequences (depending on the sequences chosen, one or two additional courses may be needed): 25-45 or 25-35 or 25-35-45; 26-36 or 26-36-46; 27-47 or 27-74 or 27-74-47; 28-38 or 28-48 or 28-38-48 (72 or 56 can be substituted for 38); 29-39 or 29-39-49; 55-74; 80-81 or 80-82 or 81-82 or 80-81-82. At least one of the sequences must include a 40 or an 80-level course in which a major paper is required. This requirement will serve as the culminating experience in the major. With the permission of the Vice Chair, a student may substitute other courses to fulfill these requirements.

Notes: Economics 2 and 7 may not be counted toward fulfillment of the major requirement.

REQUIREMENTS FOR THE MODIFIED MAJOR

The modified major is intended to fit the needs of students who have a definite interest in economics but are interested also in studying some specific problem or topic that falls partly in the field of economics, the study of which depends also upon courses in related fields, e.g., mathematics or other social sciences. Each student’s program must be approved by the Vice Chair of the Department, and this program of courses constitutes the major.

Prerequisites: Economics 1 and 10, with an average grade no lower than C, and Mathematics 3. (A student who fails to achieve the minimum grade average for the prerequisites may, with permission of the Vice Chair, substitute grades in Economics 21 and 20 for those in Economics 1 and 10, respectively. Another statistics course may, in certain instances, be substituted for Economics 10 with permission of the Vice Chair.)

Requirements:

1. A unified, coherent program of at least ten courses is required, of which at least six courses must be in economics (in addition to Economics 1, 10 and Mathematics 3) and four courses in a field or fields related to the special topic approved by the Department Vice Chair. The GPA for the six courses in Economics must be no less than 2.0. The additional courses in a field outside of economics must be chosen from those satisfying the major of the department offering the course.

2. The six courses in economics shall include:

a) Economics 20, 21, and 22.

b) Any one of the following sequences (depending on the sequence chosen, one additional courses may be needed): 25-45 or 25-35-45; 26-36-46; 27-47 or 27-74-47; 28-48 or 28-38-48 (72 or 56 can be substituted for 38); 29-39-49; 80-81 or 80-82 or 81-82 or 80-81-82. With the permission of the Vice Chair, a student may substitute a sequence of courses involving an alternative culminating experience.

REQUIREMENTS FOR ANOTHER MAJOR MODIFIED WITH ECONOMICS

Prerequisites: Economics 1 and 10, with an average grade no lower than C, and Mathematics 3. (A student who fails to achieve the minimum grade average for the prerequisites may, with the permission of the Vice Chair, substitute grades in Economics 21 and 20 for those in Economics 1 and 10, respectively. Another statistics course may, in certain instances, be substituted for Economics 10 with permission of the Vice Chair.)

Requirements: A unified, coherent program of at least four courses in economics in addition to the prerequisites, with a GPA of no less than 2.0. The four courses must either: contain both 21 and 22, or contain a sequence of at least 2 courses and one of either 21 or 22. Thus, there are three ways to complete the modification with economics:

1. Economics 21 and 22, plus any two other Economics courses.

2. Economics 21, plus any of the following sequences: 25-45 or 25-35 or 25-35-45; 26-36 or 26-36-46; 27-47 or 27-74 or 27-74-47; 28-48 or 28-38 or 28-38-48 (72 or 56 can be substituted for 38); 29-39 or 29-39-49; 55-74; 80-81 or 80-82 or 81-82 or 80-81-82, plus any other course if necessary to achieve the total of four Economics courses.

3. Economics 22, plus any of the following sequences: 25-45 or 25-35 or 25-35-45; 26-36 or 26-36-46; 27-47 or 27-74 or 27-74-47; 28-48 or 28-38 or 28-38-48 (72 or 56 can be substituted for 38); 29-39 or 29-39-49; 55-74; 80-81 or 80-82 or 81-82 or 80-81-82, plus any other Economics course if necessary to achieve the total of four Economics courses. With the permission of the Vice Chair, a student may substitute other courses to fulfill these requirements.

ECONOMICS MINOR

Prerequisites: Economics 1 and 10, with an average grade no lower than C, and Mathematics 3. (A student who fails to achieve the minimum grade average for the prerequisites may, with the permission of the Vice Chair, substitute grades in Economics 21 and 20 for those in Economics 1 and 10, respectively. Another statistics course may be substituted for Economics 10 with permission of the Vice Chair.)

Requirements: Six courses in addition to the prerequisites, with a GPA for these six courses of no less than 2.0. No courses can be counted toward both a major and a minor. The six courses must include the following:

1. Economics 20, 21, and 22

2. Any one of the following sequences (depending on the sequence chosen, one additional course may be needed): 25-45 or 25-35-45; 26-36-46; 27-47 or 27-74-47; 28-48 or 28-38-48 (72 or 56 can be substituted for 38); 29-39-49; 80-81 or 80-82 or 81-82 or 80-81-82. With the permission of the Vice Chair, a student may substitute a sequence of courses involving an alternative culminating experience.

No courses can be counted toward both a major and a minor. With the permission of the Vice Chair, a student may substitute other courses to fulfill these requirements.

TRANSFER CREDIT

Normally, no more than three courses transferred for Dartmouth credit from other institutions will be credited toward fulfillment of a regular or modified major in economics, including both prerequisites and courses counting for the major. Students are discouraged from transferring the equivalents of Economics 20, 21, and 22. No transfer credit is possible for a 40-level or an 80-level course to satisfy the culminating experience.

ECONOMICS HONORS PROGRAM

The Honors Program in Economics provides qualified students with the opportunity of doing research in economics, either initiated during their 40-level course or in Economics 85, and then writing an Honors thesis (Economics 87) in the senior year.

To be eligible for the Program, a student must have a grade point average of at 3.3 in courses counting toward the major (excluding Economics 1, 10, and Mathematics 3), and an overall grade point average of at least 3.0 for courses taken through the term immediately preceding enrollment in Economics 85 or, in the case where the research is begun in the 40-level course, preceding enrollment in Economics 87. Ten courses instead of the normal nine are required to receive honors. The economics courses must include Economics 20, 21, and 22. Students whose major paper in their 40-level course are considered worthy of developing into a thesis and who meet all other requirements will be invited to enroll in Economics 87. Prior to enrolling in Economics 85 or Economics 87, the student must have the written approval of the Vice Chair and a faculty member in the Economics Department who is willing to act as an adviser. Additionally, those students who do not take Economics 85 must have the written approval of the faculty member who taught the 40-level course in which the thesis topic and research were developed. The adviser may be the teacher of the 40-level course and would usually be a professor whose own research interests lie in the area in which the student wants to work.

Majors enrolled in a 40-level course or in Economics 80, 81, or 82 (“80-level”) whose research papers for the course are deemed of exceptional merit by the instructor shall be granted honors in economics without necessarily enrolling in Economics 87. No more than two students per section may be granted honors in this way without a vote of the department. Students who achieve honors by this method must still complete ten major courses (beyond prerequisites) to receive honors. Students may subsequently enroll in Economics 87 and extend their research from the 40-level or 80-level course in order to be eligible for high honors. Failure to enroll in or to complete Economics 87 will not forfeit the original honors designation unless the course is necessary to obtain a count of ten major courses.

A fourth method of obtaining honors is to complete the Economics 80-81-82 sequence with an average of B+, with a total of at least ten courses in the major, and having received a grade of A- or better in each of the prerequisite classes (i.e. Economics 20, 21 and 22). The instructors of this sequence may recommend that students who have done outstanding work in these courses be granted, by a vote of the department, high honors.

Both regular majors and modified majors who wish to undertake the Honors Program will normally be expected to have taken all the courses relevant to their topic prior to enrollment in Economics 85, or Economics 87 if the student writes the Honors thesis directly after the 40-level course. An average grade of B+ (3.33) or better in Economics 85 and 87, or a 40-level course and 87 for the alternative approach to developing the Honors thesis, will entitle the student to graduate with ‘Honors in Economics.’ A vote of the Department is necessary to achieve ‘High Honors in Economics.’ The Department will take into account the student’s performance on the thesis and his or her record in Economics courses in awarding Honors.’

COURSE OFFERINGS

1. The Price System: Analysis, Problems, and Policies

05F, 06W, 06S, 06F, 07W, 07S: 9, 10, 11, 12

Emphasis will be placed on problems and policies of current interest as they relate to resource use and the distribution of income and output. Students will receive an introduction to the theory of supply and demand in both product and factor markets in order to examine selected topics drawn from such areas as industrial organization and antitrust policy, labor economics, international trade, economic development, agriculture, urban problems, poverty and discrimination, public sector economics, and environmental problems. Dist: SOC. The staff.

2. Introduction to Economic Policy Issues

06S, 06F, 07S: 10

This course is an introduction to economic policy issues. No previous training in economics is assumed. Elementary microeconomic and macroeconomic concepts are developed to analyze such issues as minimum wages, health insurance, housing, agriculture, energy, taxes, government spending, financial institutions, unemployment, inflation, budget deficits, GATT, NAFTA, and other aspects of international trade. The content of the course at any given time will depend on individual instructors’ assessments of what are relevant current issues.

This is a survey course intended for students who do not plan to take other economic courses. It is not a prerequisite for Economics 1 nor a substitute for it, but it does not preclude students from taking Economics 1 afterwards. Students who have previously taken Economics 1, however, may enroll in Economics 2, but only with the permission of the Vice Chair. Economics 2 is the only Department course, except for Economics 87, that may be taken under the Non-Recording Option (NRO). Economics 2 does not count towards the major. Dist: SOC. Fischel, Thorson.

7. First-Year Seminars in Economics

Consult special listings

10. Introduction to Statistical Methods

05F: 10, 11, 1206W: 9, 1006S: 9, 10, 11

06F: 9, 10, 1107W: 9, 1007S: 9, 10, 11

This course introduces the student to the basic concepts and methods of statistics. It covers descriptive statistics and inference (estimation and hypothesis testing) for a single variable and for two variables. The probability theory required for these topics will be developed.

Prerequisites: Economics 1 and Mathematics 3 (or 2), or permission of the instructor. Economics 10 is a prerequisite to the major in Economics. This course should be taken early in the student’s major program. Because of the large overlap in material covered, no student may receive credit for more than one of the courses Economics 10, Government 10, Mathematics 10, Psychology 10, Social Sciences 10, or Sociology 10 except by special petition.

Dist: QDS. Blanchflower, Chaudhury, Giummo.

20. Econometrics

05F, 06W, 06S, 06F, 07W, 07S: 9, 10

Econometrics is the statistical analysis of economic data. This course focuses on regression analysis (specification, estimation, and hypothesis testing) and problems and pitfalls in its application in economics. The course involves extensive use of the statistical program STATA and will enable students to implement their own empirical research projects in preparation for the culminating experience in the economics major.

Prerequisites: Economics 10 and Mathematics 3. Dist: QDS. Bhattacharya, Das.

21. Microeconomics

05F, 06W: 9, 1006S: 10A, 2A06X, 06F, 07W, 07S: 9, 10

This course is a study of the pricing and allocation process in the private economy. Topics include the theories of demand and production, and the determination of prices and quantities for commodities and factors of production in competitive and noncompetitive markets. Applications of the theory and its implications for empirical analysis are also considered.

Prerequisites: Economics 1 and Mathematics 3. Dist: SOC. Edmonds, Gick, Gustman.

22. Macroeconomics

05F: 10, 1106W: 906S, 06X, 06F, 07W: 9, 1007S: 9

This course is concerned with the behavior of the economy as a whole, particularly fluctuations in economic activity. General equilibrium models are developed to analyze the determinants of GNP, unemployment, the rate of inflation, and the growth of output. The micro foundations of macro aggregates are developed, with special emphasis on the role of expectations. The analytic tools are used to evaluate monetary and fiscal policies and to understand current macroeconomic controversies.

Prerequisites: Mathematics 3 and Economics 1. Dist: SOC. De Santis, Feyrer, Rose.

25. Industrial Organization and Public Policy

06W, 06S, 07W, 07S: 11

This course examines competition and monopoly in American industry from both theoretical and empirical viewpoints. Further, the course analyzes specific aspects of antitrust policy (e.g., the treatment of monopoly, of collusion among firms, and of mergers), including an appraisal of present policies and of alternative antitrust approaches.

Prerequisite: Economics 1, or permission of the instructor. Dist: SOC. Scott.

26. The Economics of Financial Intermediaries and Markets

05F: 1206W: 12, 206S: 11,1206X: 12, 206F: 1107W: 12, 207S: 11, 12

This course examines the nature and function of financial intermediaries (e.g., banks, mutual funds, and insurance companies) and of securities markets (e.g., the money and capital markets and the market for derivatives). It analyzes liquidity and risk management and studies the efficiency, stability, and regulation of the financial system.

Prerequisite: Economics 1. Dist: SOC. Kohn, Simons, Zinman.

27. Labor Economics

06S, 07S: 9

This course studies the economic behavior of employers and employees as they interact in the labor market. The class will move beyond the basics of labor supply and demand to cover such topics as human capital investment, the structure and determinants of financial compensation and benefits packages, contract negotiations and arbitration. Additionally, since many of the pressing problems facing the United States are labor market issues, this course will provide a basis for better understanding of nationally-debated issues such as reforms of the welfare system, the income tax system, immigration policy, and affirmative action programs.

Prerequisite: Economics 1. Dist: SOC. Anderson.

28. Public Economics

06F, 07F: 10A, 2A

This course consists of the study of the public economy of the United States at the national, state, and local levels. The course is divided into the microeconomic topics of resource allocation and income distribution. The macroeconomic impact of selected tax and expenditure policies is also studied. Particular topics may include the rationale for government activity, theories of collective decision-making, cost-benefit analysis, and the efficiency and incidence of various tax structures.

Prerequisites: Economics 1 and Economics 21, or permission of the instructor. Dist: SOC. Gick.

29. International Finance and Open-Economy Macroeconomics

05F, 06W, 06F, 07W: 9, 10

This course covers introductory material in the area of international monetary theory and policy. It examines the behavior of international financial markets, the balance of payments and exchange rates, interactions between the balance of payments, the exchange rate and domestic economic activity and ways of organizing the international monetary system.

Prerequisite: Economics 22 or permission of the instructor. Dist: SOC. Shambaugh.

35. Games and Economic Behavior

06S, 07S: 10

Game theory is the study of strategic behavior in situations in which the decision makers are aware of the interdependence of their actions. This course introduces the basic notions of game theory with an emphasis on economic applications. The topics covered are static and dynamic games with complete information; static and dynamic games with incomplete information; and the refinements of equilibrium concepts. The main applications will be in industrial organization: examples include competition and cooperation in the Cournot and Bertrand oligopoly, durable goods monopolist, entry deterrence, predation, price discrimination, and commitment. Applications to other fields, such as job market signaling, efficiency wages, bargaining, provision of public goods, and monetary policy, will be discussed as well.

Prerequisites: Economics 10, 21 and Mathematics 3, or permission of the instructor. Dist: SOC. Snyder.

36. of Finance

05F, 06W, 06F, 07W: 9, 10

This course studies decision making under risk and uncertainty, capital budgeting and investment decisions, portfolio theory and the valuation of risky assets, efficiency of capital markets, option pricing, and problems of asymmetric information.

Prerequisites: Economics 10, 21, and 26, or permission of the instructor. Dist: SOC. De Santis, Samwick, Venti.

38. Urban and Land Use Economics

06S, 07S: 11

This course is about the location of economic activities. The central focus is on urban areas and attendant problems in public economics, but some attention is given to agricultural, natural resource, and environmental issues. Topics include housing markets, transportation, local government structure, property taxes, resource depletion, and zoning and land use controls. Economics 72 may be substituted for Economics 38 in the Economics 28-38 sequence.

Prerequisite: Economics 1. Dist: SOC. Fischel, Thorson.

39. International Trade

05F, 06W, 06F, 07W: 9, 10

This course deals with the causes and consequences of international trade and factor movements. Topics covered include theories of why nations trade, the consequences of trade for economic welfare and the distribution of income, the determinants of trade patterns, the tariff and other forms of commercial policy, trade policies of selected countries, and the formation of the multinational corporation.

Prerequisite: Economics 1. Dist: SOC. Chaudhury, Irwin.

45. Topics in Industrial Organization

06W, 07W: 10A

This course deals with selected topics in industrial organization and with public policies designed to deal with problems of monopoly and competition. Students are required to write a major paper. The topic for the student paper changes regularly, but an econometric analysis is always required. Examples of the student papers include time-series analysis of stock prices to evaluate the competitive consequences of horizontal mergers challenged under Section 7 of the Clayton Act and Probit analysis to explore the determinants of university participation in research joint ventures filed under the National Cooperative Research and Production Act.

Prerequisites: Economics 20, 21 and 25. Dist: SOC. Scott.

46. Topics in Money and Finance

06W: 9, 1006S: 10, 11, 1207W: 9, 1007S: 10, 11, 12

A seminar course covering in depth such selected topics as the following: the theory of financial institutions; banking panics; the excess variability of asset prices; finance constraints and capital market imperfections; the theory of monetary policy; inflation and financial markets; debt and deficits. Will require writing a major paper.

Prerequisites: Economics 20, 22, and 36. Dist: SOC. Lusardi, Sacerdote.

47. Topics in Labor Economics

06S, 07S: 10

This course will, through the use of theoretical and statistical tools, explore major policy problems such as minimum wage and hours standards; pension regulation; public employment and training programs; and unemployment insurance. Topics will vary from year to year. Will require writing a major paper.

Prerequisites: Economics 20 and 27. Dist: SOC. Gustman.

48. Topics in Public Economics

06W, 07W: 2A

This seminar provides an in-depth examination of selected topics in public economics. Topics vary from year to year, but may include the analyses of the economic effects of social insurance programs, such as Social Security, Medicare, Medicaid, and other public assistance; the economics of health and aging; the effects of taxation on household and corporate financial behavior; the effects of taxation on labor supply, saving, and investment decisions; the economics of public goods and externalities; optimal taxation; and, theories of government structure and decision making at the federal, state, and local levels. Will require writing a major paper.

Prerequisites: Economics 20, 21 and 28. Dist: SOC. Skinner.

49. Topics in International Economics

06W: 10A, 2A06S, 07W, 07S: 9, 10

This seminar will cover selected topics in international trade and finance beyond those covered in Economics 29 and 39. Offerings in the next few years are expected to include current research on (1) financial crises in emerging markets, (2) the role of trade, open capital markets, and financial development on growth in developing countries, (3) the determinants and consequences of foreign direct investment, (4) the impact of the multilateral trade agreements on world trade, and (5) issues related to globalization. Will require writing a major paper.

Prerequisites: Economics 20, 21, 22, 29 and 39. Dist: SOC. Marion, Pavcnik.

55. Natural Resource and Ecological Economics (Identical to, and described under, Environmental Studies 55)

06W, 07W: 10

56. Environmental Economics, Policy and Management (Identical to, and described under, Environmental Studies 56)

06S, 07S: 2

70-79. Advanced Topics in Economics

From time to time special seminars or experimental courses will be offered in the 70-79 series. Examples of titles of courses that might be offered are: Economic History of the United States; Economics of Education; Mathematical Economics; History of Economic Thought.

72. Law and Economics

05F, 06F: 11

Economic analysis of property and land-use law, including zoning and environmental law. Covers such topics as the Coase theorem, property rules versus liability rules, eminent domain, regulatory takings, the efficiency of compensation, and the comparative advantage of the judiciary over legislatures. A paper based on case materials is required. Economics 72 may be substituted for Economics 38 in the Economics 28-38 sequence.

Prerequisite: Economics 1. Dist: SOC. Fischel, Snyder.

74. Applied Economics in Developing Countries

06W, 07W: 11, 12

This course uses economic analysis to understand contemporary issues in low-income countries. We consider why extreme poverty and hunger, child mortality, low-levels of education, gender inequality, environmental degradation, high fertility, and child labor are pervasive in the developing world. We also examine the economic consequences of globalization and infectious diseases such as malaria and HIV/AIDS. For each topic, we seek to understand the factors and constraints influencing decision-making in developing countries. We use this understanding to discuss the role of markets, civil organizations, government policy, and international institutions.

Prerequisites: Economics 1 and 10 or equivalent. Dist: SOC or INT; WCult: NW. Edmonds.

80. Advanced Topics in Econometrics

05F, 06F: 11

This course has two goals: (1) To further develop techniques that test for and remedy common problems associated with linear and non-linear regression analysis, and (2) to develop a practical understanding of how regression analysis can be used to examine the empirical relevance of economic theory.

Prerequisites: Economics 20 and 21 and 22 with a grade of A- or better or permission of instructor. Dist: SOC. Staiger.

81. Advanced Topics in Microeconomics

06S, 07S: 11

This is an advanced course on the economics of information. The focus of the course is a rigorous mathematical treatment of the value of information, moral hazard, learning, adverse selection, and signaling. Applications to labor markets, corporate governance, financial markets, and insurance will be discussed.

Prerequisites: Economics 20, 21 and 22 with a grade of A- or better and Mathematics 8 or permission of instructor. Dist: SOC. Gick.

82. Advanced Topics in Macroeconomics

06W, 07W: 10

The purpose of this course is to study in depth selected topics in Macroeconomics. Topics will include consumption, savings and investment; dynamic inconsistency and the design of monetary and fiscal policies, multiple equilibria, bubbles and cycles, and economic growth.

Prerequisites:

Economics 20, 21 and 22 with a grade of A- or better or permission of instructor. Dist: SOC. Feyrer.

85. Independent Study in Economics

All terms: Arrange

This course offers an opportunity for a student to do independent work under the direction of a member of the Department. It is required of all majors in the Honors Program who do not initiate their honors work in their 40-level course; they will be expected to do the preliminary work on their Honors theses in this course

For students who take this course in order to engage in independent study of a topic of interest rather than as a part of honors work, the prerequisite background will consist of all the regularly offered courses in the chosen field of study. Such a student will normally be expected to prepare, prior to the taking of Economics 85, a prospectus and a list of reading pertaining to the study he or she wishes to pursue.

Prerequisite: permission of the Vice Chair and of the Department faculty member who will be advising the student.

87. Senior Thesis

Arrange

As explained above under ‘Economics Honors Program’, selected students will be invited to enroll in Economics 87 after they have completed their 40-level course. Alternatively, a student can initiate honors work in Economics 85 and then enroll in Economics 87 with the approval of the student’s adviser and the Vice Chair. Honors students will normally take Economics 87 in the term following their enrollment in Economics 85, or alternatively, following their enrollment in a 40-level course in which a thesis has been started. Other majors who wish to write a non-Honors thesis for single course credit will be required to have as prerequisite background all regularly offered courses in the chosen field of study and may take the course in either the first or second terms of the senior year.

Prerequisite: permission of the Vice Chair, permission of the Department faculty member who will be advising the student, and, in the case that the research was begun in a 40-level course, the permission of the faculty member who taught the 40-level course in which the thesis topic and the research were developed.