Course Descriptions

Course Descriptions 2017-09-07T14:10:44+00:00

ECO 501 Microeconomic Theory I First term of a two-term sequence in microeconomic theory. Topics include consumer and producer theory, choice under uncertainty and an introduction to game theory.

ECO 503 Macroeconomic Theory I First term of a two-term sequence in macroeconomics. Topics include consumption, saving, and investment; real interest rates and asset prices; long-term economic growth; money and inflation; and econometric methods for macroeconomics.

ECO 506 Directed Research Under the supervision of a faculty member, students carryout research on a directed topic and present results. Students must identify a supervising faculty member and submit a written plan for research and evaluation which must be approved by the supervising faculty member and director of graduate studies.

ECO 511 Advanced Economic Theory I Topics vary from year to year reflecting, among other things, current developments and the instructor’s interests. Topics covered in past years have included expected and nonexpected utility theory, intertemporal general equilibrium theory, evolutionary game theory, dynamic games, contract theory, theory of organizations, and bounded rationality.

ECO 513A dvanced Econometrics: Time Series Models Concepts and methods of time series analysis and their applications to economics. Time series models to be studied include simultaneous stochastic equations, VAR, ARIMA, and state-space models. Methods to analyze trends, second-moment properties via the auto covariance function and the spectral density function, methods of estimation and hypothesis testing and of model selection will be presented. Kalman filter and applications as well as unit roots, cointegration, ARCH, and structural breaks models are also studied.

ECO 515 Econometric Modeling The construction, estimation, and testing of econometric models as a process, from theory to model formulation to estimation and testing and back to theory. Bridging the gap between theory and applied work. A series of topics in macroeconomics time series and microeconomic cross-sectional analysis: consumption at the household and aggregate level, commodity prices, nonparametric and parametrics estimation.

ECO 516 Behavioral Economics This course covers a variety of topics and models that incorporate findings and concepts from psychology into economic analysis. The course addresses both experimental evidence and formal modeling. Themes studied may include social preferences (fairness, reciprocity), intrinsic vs. extrinsic motivation, self-control, motivated beliefs (overoptimism, wishful thinking), reference-dependent preferences (loss aversion, prospect theory), imperfect memory and attention, and bounded rationality (cognitive limitations, choice overload, satisficing).

ECO 517 Econometric Theory I A first-year course in the first-year econometrics sequence: it is divided into two parts. The first gives students the necessary background in probability theory and statistics. Topics include definitions and axioms of probability, moments, some univariate distributions, the multivariate normal distribution, sampling distributions, introduction to asymptotic theory, estimation and testing. The second part introduces the linear regression model and develops associated tools. Properties of the ordinary least squares estimator will be studied in detail and a number of tests developed.

ECO 520/POL 577 Economics and Politics Focused on analytical models of political institutions, this course is organized around canonical models and their applications. These include: voting models, menu auctions, models of reputation and cheap talk games. These models are used to explain patterns of participation in elections, institutions of congress, lobbying, payments to special interest groups and other observed phenomena.

ECO 521 Advanced Macroeconomic Theory I Topics vary from year to year, reflecting current developments and the instructor’s interests. Topics covered in past years have included methods of numerical analysis and econometric testing of equilibrium business cycle models, the role of monetary and fiscal policy in inflation determination, the nature of optimal monetary policy, dynamic games and time consistency in macroeconomic policy formation, central banking, and the theories of price stickiness.

ECO 523 Public Finance I This course provides a microeconomic examination of the role of government in the economy. Topics will include the theory and measurement of excess burden, optimal tax theory, the analysis of tax incidence, and an examination of the effects of taxation on behavior.

ECO 525/FIN 525 Asset Pricing Introduction to asset pricing covering theory in both continuous and discrete time to study dynamic portfolio choice; derivative pricing; the term structure of interest rates; and intertemporal asset-pricing and consumption-based models. Pre-requisites: All required courses in micro, macro and econometrics at the first-year PhD level.

ECO 529 Financial and Monetary Economics The recent Great Recession led to a transformational rethinking of Monetary Economics. While prior to the Great Recession the key frictions were price stickiness and wage rigidities, the great recession highlighted the importance of financial frictions. Similarly, financial regulation shifted course. Whereas prior to the crisis the focus was on micro-prudential regulation, measuring the soundness and risks of individual banks in isolation, current thinking stresses the importance of macro-prudential regulation with its focus on spillover risks. Several new systemic risk measures were proposed. The course would also cover interaction between monetary policy and macro-prudential policy as well as spillover analysis and the implications for the international financial architecture. Given this fundamental rethinking and Princeton’s leading role in developing the new conceptual framework, this course would (i) expose students to these new research trends and also (ii) contrasts it with the established New Keynesian framework.

In terms of economic methodology, the course would teach students new advanced tools, including formal modeling, economic dynamical systems in continuous time, strategic interactions, asymmetric information, and modern welfare analysis. The empirical component would range from model estimation, calibration to reduced form analysis. There is strong interest from many Ph.D. students, and expect that advanced undergraduate and possibly for Master students will also take this course.

ECO 531 Economics of Labor An examination of the economics of the labor market, especially the forces determining the supply of and demand for labor, the level of unemployment, labor mobility, the structure of relative wages, and the general level of wages.

ECO 541 Industrial Organization and Public Policy Methods for empirical and theoretical analysis of markets composed of productive enterprises and their customers are studied. Analyses are applied to modern market structures and practices, and public policy towards them. Topics include the roles of technology and information, the structure of firms, modes of interfirm competition, determination of price, quality, and R & D investment, and criteria for government intervention.

ECO 551 International Trade I The determinants of foreign trade: (1) inter-country differences of factor endowments and technologies and (2) scale economics and imperfect competition are studied. Dynamic comparative advantage; innovation and growth; factor movements and multinational corporations; gains from trade; tariffs and quantitative restrictions on trade and their role in dealing with market failures and oligopolies; the political economy of trade policy; international negotiations on trade policy; and economic integration are studied as well.

ECO 553 International Monetary Theory and Policy I This sequence (with ECO 554) develops core models of international finance and open-economy macroeconomics, and surveys selected current research topics in the field. Topics treated in the first semester include: the intertemporal approach to the current account; the determination of real exchange rates, and purchasing power parity; international CAPM and uncovered interest rate parity; sovereign debt crisis; speculative attacks and liquidity crises; international risk sharing and capital flows, home bias, and the stability of the international financial system.

ECO 562 Economic Development I An examination of those areas in the economic analysis of development where there have been recent analytical or empirical advances. Emphasis is given to the formulation of theoretical models and econometric analysis and testing. Topics covered include models of household/farm behavior, savings behavior, equity and efficiency in pricing policy, project evaluation, measurement of poverty and inequality, and the analysis of commodity prices.

ECO 565 Health Economics I Examines health issues in both developed and developing countries. Specific topics include the evolution of health over the life course; the fetal origins hypothesis; the two-way links between socioeconomic status and health; the impact of social safety nets on health outcomes; environmental threats to children’s health and development; health insurance and its effects on health; the industrial organization of health care delivery; and the relationship between health and economic growth.

ECO 581A Microeconomics Theory Workshop Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581B Microeconomic Policy Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581 C Macroeconomics/International Finance Workshop Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581D Labor Economics/Industrial Relations Seminar Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581E Research Program in Development Studies Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581F Trade Workshop Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581G Econometric Research Seminar Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581H Civitas Foundation Finance Seminar Drafts of papers, articles, and chapters of dissertations or books, prepared by graduate students, faculty members, or visiting scholars, are exposed to critical analysis by a series of seminars organized by field. The chief objectives are for the writers to receive the benefit of critical suggestions, for all participants to gain experience in criticism and uninhibited oral discussion, and for students and faculty members to become acquainted with the research work going on in the department. Third- and fourth-year graduate students are expected to attend; first-and second-year students and faculty members are invited to attend.

ECO 581J Behavioral Economics Workshop Seminar led by different guest professors each week to discuss their current research in the field of Behavioral Economics.

ECO 581K Political Economy Workshop Seminar led by different guest professors each week to discuss their current research in the field of Political Economy. Third and fourth year graduate students are expected to attend; first and second year graduate students and faculty members are invited to attend.

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