curriculum and courses

Economics

COURSES

108 QUANTITATIVE THINKING FOR POLICY ANALYSIS (Same as Mathematics 108)

Students will learn related approaches to collecting, interpreting, and presenting quantitative information in the context of specific public policy issues such as immigration, globalization, discrimination, health care, and environmental issues. The course will build on familiar numerical, statistical, and logical skills. No prerequisites. Every semester. (4 credits)

110 INVESTMENTS

The primary goal of this course is to enable students to become informed and intelligent investors in the area of stocks, bonds, and mutual funds. We will also attempt to answer the question: Is it possible to predict changes in stock prices or are they determined only by random events? Other topics covered include ethical investing, international investing, and green investing. Emphasis will be on group learning, oral presentations, and the case study approach. This course is intended for non-economics majors and does not count for credit toward an economics major. Offered every year. (4 credits)

113 FINANCIAL ACCOUNTING

Accounting is the language of business. One of the objectives of this course is to learn that “language.” The emphasis will be on understanding financial statements both for profit and non-profit organizations. International accounting, ethics and investment decisions are also covered. This course is designed for students who desire an understanding of the elements of accounting as a component of a liberal arts education as well as for those who would like to study further in accounting or business. No prerequisite. Every semester. (4 credits)

119 PRINCIPLES OF ECONOMICS

A one-semester introduction to the basic tools of micro- and macroeconomic analysis. Microeconomics deals with consumers, firms, markets and income distribution. Macroeconomics deals with national income, employment, inflation and money. No prerequisite. Every semester. (4 credits)

221 INTRODUCTION TO INTERNATIONAL ECONOMICS

This course explores the theoretical foundations and empirical realities of international trade flows, commercial policies (tariffs, quotas, etc.) and international finance. The course emphasizes the welfare implications of international trade and commercial policies and links these to discussion of disputes over international trade agreements. The international finance portion of the course covers the foreign exchange market, balance of payments analysis and an introduction to open economy macroeconomics. Recommended for students majoring in international studies. Prerequisite: Economics 119. Every year. (4 credits)

225 COMPARATIVE ECONOMIC SYSTEMS (Same as International Studies 225)

This course examines the workings of economic systems from the perspective of the incentives facing the firm and consumer. The course provides an introduction to the economics of information and organization which is used to evaluate resource allocation under the specific institutional environment of different economic systems. Our understanding of the incentive system is then used to evaluate the overall economic system. The focus of the course is primarily on the U.S. economy, Japan and the former Soviet Union/Russia. As time permits the course may examine China, Germany and Central Europe. Prerequisite: Economics 119. Offered every year. (4 credits)

227 ADAM SMITH AND KARL MARX

The objective of this course is to study the lives and the original writings of two of the most important scholars in the history of economic thought. Adam Smith, the patron saint of laissez-faire capitalism, was the founding father of modern economics, as well as the intellectual predecessor of Marx. Marx’s historical and political vision embraced an equally large panorama. Prerequisite: Economics 119. Offered alternate years. (4 credits)

231 ENVIRONMENTAL ECONOMICS AND POLICY (Same as Environmental Studies 231)

This course analyzes the economics of public policy toward the environment. It examines the problem of market failure in the presence of externalities and public goods, and considers policy responses to these market failures, including command-and-control regulations, tax and subsidy incentives, and marketable pollution permits. These policies are examined in the context of, for example, urban air pollution, ozone depletion and global warming, water pollution, municipal and hazardous waste, threats to biodiversity, and economic development. Particular attention is paid to methods of quantifying the benefits and costs of environmental protection. Prerequisite: Economics 119. Offered every year. (4 credits)

242 ECONOMICS OF GENDER (Same as Women’s, Gender, and Sexuality Studies 242)

This course uses economic theory to explore how gender differences lead to different economic outcomes for men and women, both within families and in the marketplace. Topics include applications of economic theory to 1) aspects of family life including marriage, cohabitation, fertility, and divorce, and 2) the interactions of men and women in firms and in markets. The course will combine theory, empirical work, and analysis of economic policies that affect men and women differently. Prerequisite: Economics 119. Offered every year. (4 credits)

252 ECONOMICS OF NOT-FOR-PROFIT

This course focuses on the economics of not-for-profit institutions. The course will deal with both underlying theoretical concepts and their applicability to Macalester College. Indeed, the college will provide the framework for the course. Using the tools of economic analysis acquired in the Principles course, we will examine the mission/purpose/aims of the college and how they relate to governance (the interplay between the Board of Trustees, the President and his/her staff, the various faculty/staff committees, students, and other constituencies); planning and goal setting; resource allocation (both operating and capital budgets); the interplay between human capital, financial capital, and physical capital; agency matters and incentives; and the issues that must be confronted in deciding whether to spend more from the endowment now vs later. We will also study how not-for-profits tend to self-evaluate their progress and how external evaluating methodologies (eg U.S.News) might influence all of the above. Offered alternate years. (4 credits)

256 INTRODUCTION TO INVESTMENT BANKING

This course will provide a one semester overview of investment banks. The role of equity capital markets, debt capital markets, research, sales and trading, and investment banking will be covered. Basic corporate finance techniques will be introduced. Current financial issues in the business world will be reviewed. Classroom work, case studies, and outside speakers will be utilized. The key objectives of this course are for students to obtain a solid understanding of the various disciplines within the investment banking field and to prepare themselves for interviews and internships. The course is well suited for students who are contemplating a career in investment banking, banking, or corporate finance. Prerequisites: Economics 113 and Economics 119. Offered every fall. (4 credits)

265 ECONOMICS OF INTERNATIONAL MIGRATION (Same as Latin American Studies 265)

This course will examine the global movement of people through an economic lens. This course studies the impact that emigration has on the economy of the home country, such as brain drain and population change, the historic role that migration has played in economic development, and finally the effect that immigration has on immigrant-receiving countries. The various economic issues in the current immigration debate in the United States will be analyzed including the economic assimilation of immigrants, and the impact of immigration on native born workers. Prerequisites: Economics 119. Offered every other year. (4 credits)

323 ECONOMIC RESTRUCTURING IN LATIN AMERICA (Same as International Studies 323 and Latin American Studies 323)

This course uses economic principles to examine the transition from Import Substitution Industrialization to trade liberalization in Latin America. The goal of the course is to understand the economic antecedents to free trade as well as the resulting impact on workers and resource allocation. The course also addresses peripheral aspects of economic restructuring, such as the drug trade, migration, and the maquiladora industry. Requires an Economics 200 level course, Economics 221 preferred. Offered every year. (4 credits)

325 CHINA, RUSSIA AND CENTRAL EUROPE IN TRANSITION (Same as International Studies 325)

This course surveys the theoretic and empirical literature on Soviet-style central planning and the transition to a market economy. The economic history of central planning is examined with emphasis on the experience of the Soviet Union and its variants in Eastern Europe and China. The tool of analysis is the branch of economics known as the economics of organization and information, which will be used to analyze the operation, strengths, and limitations of central planning. The legacy of central planning forms the backdrop for an examination of the transition to a market economy. Prerequisites: Economics 119 and one 200s level Economics course; Economics 221 or 225 are recommended. Offered alternate years.(4 credits)

342 ECONOMICS OF POVERTY IN THE US

This course focuses on the economic aspects of poverty and inequality in the United States. The course utilizes economic theory and empirical research to analyze the determinants of, and potential strategies to overcome poverty and inequality. Topics include measurement and trends of poverty and inequality, labor markets, education, discrimination, residential segregation, and immigration. The course also investigates the role of public policy in fighting poverty and inequality. Prerequisites: Economics 119, and one Economics 200 level course. Offered alternate years. (4 credits)

353 MANAGERIAL ACCOUNTING

Planning is the key to business success. How do firms plan for the future? Setting objectives and budgets. Evaluating and rewarding employee performance. Controlling inventory, cash budgeting, and capital budgeting. Extensive use of case studies and group work. Prerequisite: Economics 113 or permission of instructor. Offered every year. (4 credits)

356 CAPITAL MARKETS

The structure, operation, regulation and economic role of financial markets and institutions; fundamental security analysis and present-value techniques; forecasts of earnings and analysis of yields on stocks and bonds; the portfolio theory and characteristic lines, betas and mutual-fund ratings; futures and options markets. Prerequisites: Economics 113 and 119. Offered every year. (4 credits)

361 INTERMEDIATE MICROECONOMIC ANALYSIS

Methodology of economic science; theory of consumer behavior; theory of the firm; market structure and price determination; factor markets and income distribution; general equilibrium analysis. Prerequisites: Economics 119, one Economics 200 level course, and Math 135 or 137. Not open to first-year students except by permission of the instructor. Every semester. (4 credits)

371 INTERMEDIATE MACROECONOMIC ANALYSIS

This course develops in detail theories of the determination of national income, employment and the price level. The foundations and mechanics of neo-classical and Keynesian models of the aggregate economy are studied and modern syntheses of these approaches are explored. Considerable attention will be paid to current behavior of the national economy. Prerequisites: Economics 119, 361 (or permission of the instructor), and Math 135 or 137. Every semester. (4 credits)

381 INTRODUCTION TO ECONOMETRICS

This course investigates the methods economists use to test theories and conduct economic forecasts. This course will provide the student with the ability to design, conduct, and evaluate empirical work in economics and other social sciences. The primary focus of the course is on the final project that consists of a research paper that will integrate library research, economic theory, and econometric analysis. The course will take a “hands on” approach as much as possible with weekly use of the microcomputer in class. Prerequisites: Economics 119, any Economics course in the 200s, Math 135 or 137 and Math 153 or 154 or 155. Every semester. (4 credits)

422 INTERNATIONAL FINANCE IN HISTORICAL PERSPECTIVE

This is a course in open economy macroeconomics and international finance. Special emphasis is placed on the causes and consequences of the international financial system’s evolution. The four major international monetary regimes of the twentieth century—the classical gold standard, the interwar gold-exchange standard, the Bretton Woods System, and the floating-rate dollar standard—are explored in chronological order as well as attempts at monetary union in Europe. Topics examined include: 1) exchange rate determination, 2) balance of payments, 3) macroeconomic adjustment, and 4) international monetary institutions. Case studies are used extensively. Prerequisites: Economics 361 and 371. This course will count towards the capstone. Offered alternate years. (4 credits).

424 EFFECTS OF INTERNATIONAL COMPETITION

This course provides an in-depth look at current issues in international trade. The course begins with a more rigorous examination of both classical and “new” trade theories. Then, we explore empirical tests of trade theories, models of outsourcing and production fragmentation, and the literature relating trade and the environment. We also examine the debates over the effect of trade on wages, multilateral versus bilateral trade negotiations, and the relationship between trade and growth. Prerequisites: Economics 361, 371, and 381. This course will count towards the capstone. Offered alternate years. (4 credits)

426 INTERNATIONAL ECONOMIC DEVELOPMENT

This course will apply the tools of economic analysis to gain an understanding of economic development problems and their solutions. Patterns of economic development in an historical and dynamic context will be examined. The central role of agriculture and the problem of technological change in agriculture will also be examined. Other topics will include neo-classical growth models, domestic and international economic policies, international trade, foreign aid, external debt, technology transfer, rural-urban migration and income distribution. Prerequisites: Economics 361, 371, and 381. This course will count towards the capstone. Offered every year. (4 credits)

431 PUBLIC FINANCE

This course examines the economics of government policy, focusing on taxation and expenditures. It relies on theoretical and empirical research to explore how government affects the allocation of resources and the distribution of income and to characterize optimal government policy. The first portion of the course considers government policy in the presence of public goods or externalities (such as pollution or spillovers from public education) and analyzes the effect of social security and social welfare programs on labor supply, savings, income distribution, and government revenue. The second portion focuses on the distributional burdens of taxation, optimal commodity and income taxation, and current tax debates. Prerequisites: Economics 361, 371, and 381. This course will count towards the capstone. Offered every year. (4 credits)

442 LABOR ECONOMICS

This course uses theoretical and empirical research to examine the economics of work from both the point of view of the firm and the worker. Economic tools will be used to analyze some of the important issues relevant to labor economics, such as labor force participation, the division of labor within the household, occupational choice, investments in education, minimum wage legislation, wage elasticities, employment-hours tradeoff, labor market discrimination, unions, and job search. Prerequisites: Economics 361 and 381. This course will count towards the capstone. Offered alternate years. (4 credits)

444 HONORS SEMINAR

An honors seminar to enhance the senior capstone requirement. Prerequisite: Permission of instructor required. Offered every fall. (4 credits)

457 FINANCE

This course concentrates on developing and applying economic principles to the decision making process of the firm. Typically the course is taught from the viewpoint of the financial manager of a firm (profit or non-profit). Traditional corporate finance topics will be covered, including: cash flow management, sources of capital, capital budgeting, cost of capital, and financial structure. Recent theoretical developments in the capital asset pricing model and portfolio theory also will be examined. Actual case studies of financial decision making often are included in the course. Prerequisites: Economics 113, 361 and 381. This course does not count towards the capstone. Offered every year. (4 credits)

461 SELECTED TOPICS IN MICROECONOMICS

This course will extend the subject matter of Intermediate Microeconomics, considering both theory and selected applications in four broad areas: (1) Extensions of the theory of choice to considerations of risk and uncertainty, the expected utility hypothesis, and the economics of information; (2) Extensions of the competitive market model to examine the supply of exhaustible resources, airline regulation and deregulation, and rent controls; (3) Extensions of simple, undifferentiated oligopoly theory to examine product differentiation, game theory, and contestable markets; and (4) Extensions of the theory of factor markets to study discrimination in the labor market, the negative income tax, and the incidence of the social security payroll tax. Prerequisites: Economics 361, 371 and 381. This course will count towards the capstone. Offered alternate years. (4 credits)

481 ADVANCED ECONOMETRICS

This course will introduce advanced topics in applied econometrics. Among other topics, it will examine limited dependent variable models, vector autoregression and advanced time series techniques, simultaneous equations models and the econometrics of panel data estimation. Although the emphasis will be on applied work, the course will also examine the underlying mathematical structure of these estimation methods. Prerequisites: Economics 361, 371, 381 and Math 135 or 137 and Math 236, or consent of instructor. This course will count towards the capstone. Offered alternate years. (4 credits)

485 EMPIRICAL FINANCE

This course concentrates on applying econometric techniques and computer programming to empirically test major financial theories. The econometric techniques used in the class include but are not restricted to OLS, GLS, GMM, Maximum Likelihood method, Nonparametric method, panel data models (random effect model, fixed effect model, pooled regression etc.), time series models (VAR, ARMA, ARMAX, GARCH etc.). Main programming language used in the class is Matlab, while R and STATA may also be used occasionally. Major finance topics tested in the class include market efficiency, portfolio theory, stock selection models, market microstructure, anomalies in the financial markets, calendar effects etc. Prerequisites: Economics 381, Math 135 or 137 and Math 236. Offered alternate years. (4 credits)

490 BEHAVIORAL ECONOMICS and EXPERIMENTAL ECONOMICS

This course surveys recent developments in behavioral economics and considers applications in labor economics, macroeconomics, finance, public finance, consumer choice, and other areas. Our goal is to draw on recent work in cognitive and evolutionary psychology to better understand human behavior and incorporate these insights into neoclassical reasoning and modeling. Prerequisites: Economics 361 and 371. Offered alternate years. (4 credits)

614 INDEPENDENT PROJECT

Further study in fields of special interest. Readings, conferences, field work, reports. Prerequisites: Economics 361, 371, and permission of the instructor. Every semester. (4 credits)

624 INTERNSHIP

Work that involves the student in practical off-campus experiences with business, government, and non-profit organizations. S/NC grading only. Prerequisites: two courses in economics, plus permission of the instructor. While the department encourages students to undertake meaningful off-campus experiences, internship credits do not count among the eight minimum courses for the major. (Internships are considered like a ninth or tenth course.) Every semester. (1–4 credits)

634 PRECEPTORSHIP

Work in assisting faculty in the planning and teaching of a course and/or tutoring individual students. S/NC grading only. Prerequisites: Economics 361, 371 and permission of the instructor. Every semester. (4 credits)

644 HONORS INDEPENDENT

Independent research, writing, or other preparation leading to the culmination of the senior honors project. Offered every semester. (1–4 credits)