ECON207: Microeconomic Analysis

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Introductory Micro and Macroeconomics

Course Description

This module covers aspects of microeconomics relevant to general management. Techniques and tools of analysis are emphasised alongside relevant theory. Topics covered include:

• demand analysis,
• production and costs,
• general equilibrium analysis,
• pricing,
• competitive behaviour and the theory of games,
• the internal organisation of the firm, incentives, and mechanisms for reconciliation of the interests of a firm's owners and its managers.

Educational Aims

This course is designed to introduce students to those aspects of the firm and its environment which are of particular relevance to management. The topics selected aim to bridge the gap between the traditional approach to managerial economics and the more modern study of the organization. By the end of the module students should have the ability to understand, interpret and extend both traditional and modern approaches to the theory of the firm.

Outline Syllabus

Consumer Behaviour

• Preferences
• Indifference curves and the budget constraint
• Comparative statics of changes in income and price
• Income and substitution effects

Production Costs

• Short and long-run decisions
• Measuring productivity
• The production function
• Isoquants and isocost lines
• Short and long run costs
• Economies of scale and scope

Monopoly

• Sources of monopoly power
• Pricing under monopoly
• Multi-plant monopoly
• Entry barriers
• Deadweight loss

Monopolistic Competition Advertising

• Conditions for monopolistic competition
• Profit maximization and long-run equilibrium
• Product differentiation
• Advertising

Oligopoly

• Strategic interaction
• The kinked demand curve
• Sweezy, Cournot, Stackelberg and Bertrand models of oligopoly
• Commitment and incentives to cheat
• Contestable markets

Game Theory

• Definitions
• Dominant Strategy Equilibrium Prisoners Dilemma
• Backwards Induction
• Nash Equilibrium
• Subgame Perfect Nash-Equilibrium
• Mixed Strategies

Information Economics (2 lectures)

• Asymmetric/Incomplete Information
• Adverse Selection
• Moral Hazard
• Signalling
• Screening

Auctions

• Major types of Auction
• Optimal Bidding Strategy
• Expected Revenues

Business Strategy

• Limit Pricing
• Predatory Pricing
• Raising Rivals' Costs
• Network Effects

Externalities, Public Goods and Rent Seeking

• Externalities
• Public Goods
• Incomplete Information
• Rent Seeking
• Government Policy and International Markets

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON208: Macroeconomic Analysis

• Terms Taught: Lent / Summer Terms only  
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS credits
• Pre-requisites: Introductory Micro and Macroeconomics

Course Description

The objective of this module is to show how a real-world phenomenon can be understood by using macroeconomic models. The module will familiarise students with the interpretation of macroeconomic data and will study the implications of economic policies in both a closed and an open economic environment. At the end of the module, students are expected to be able to interpret macroeconomic events and address macroeconomic questions by using the concepts and methodology conveyed in lectures and tutorials. The module will put emphasis on major important issues related to economic growth, the causes of economic fluctuations and the effectiveness of the economic policy.

Educational Aims

Business activities are affected by national economic policies through their influence on inflation, interest rates, exchange rates and aggregate demand. This course examines the main channels of influence from the international business perspective.

The object of the course is therefore to develop an understanding of the workings of macroeconomic policy and to familiarise participants with the interpretation of macroeconomic and monetary data. Students are encouraged to use their knowledge of macroeconomic theory to gain a better understanding of current macroeconomic events and issues. Weekly classes will consolidate the understanding and interpretation of macroeconomic data.

Outline Syllabus

• National accounting and the macroeconomic balances. International financial flows, Asian saving, Western consumption and the global credit crisis.
• Productivity and the sources of economic growth in the long run.
• Equilibrium in the goods and money markets.
• Aggregate demand and aggregate supply.
• Unemployment, inflation and monetary policy.
• The balance of payments and exchange rates. The IS-LM-BP model.
• The IS-LM-BP model.
• Time and aggregate demand. Policy implications of optimisation in consumption and business investment decisions.
• The governments budget constraint and public debt accumulation with emphasis on the world credit crisis. When are fiscal deficits justified?
• Transmission mechanisms of monetary policy. Inflation targeting, asset markets and the yield curve. Crisis management and unconventional monetary measures.

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON212: Introduction to Econometrics

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Introductory statistics
  • courses equivalent to ECON224 & ECON225

Course Description

This module provides an introduction to the theoretical concepts and applications of econometrics. Econometrics techniques taught include bivariation regression, multiple regression and two stage least squares. The importance and relevance of statistical and diagnostic testing is emphasised in the context of econometrics applications. Students are introduced to the statistical package Stata, the understanding of which is an integral part of the module.

Educational Aims

This half unit course aims to provide an introduction to the fundamental theoretical concepts and applications of econometrics. On successful completion of this course the student should carry the following transferable skills:

• Computer literacy (the use of computer, Word, SPSS and internet)
• Data manipulation and analysis
• Analytical skills
• Problem solving
• Planning
• Independent thinking

Outline Syllabus

• Introduction to regression analysis: Simple linear regression; multiple regression; least squares estimation; explanatory power
• Least squares assumptions; Gauss-Markov Theorem; Hypotheses testing: t-test, p-value, confidence interval
• Hypotheses testing: F test; Multicollinearity
• Introduction to time series analysis. LMSC test; Granger Causality; Dickey-Fuller Test; Cointegration
• Specification, omitted and irrelevant variables, Ramsey's RESET test, Akaike Information Criterion, Schwarz Criterion, Jarque-Bera test
• Specification, choosing a functional form, log forms, dummy variables
• Consequences of Serial Correlation, Durbin Watson test, Remedies for Serial Correlation
• Consequences of Heteroscedastic errors; White test; Remedies for Heteroscedasticity
• Simultaneous equation models; structural and reduced-form equations; identification; two stage least squares

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON220: Intermediate Microeconomics I

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Introductory Microeconomics and Mathematics
  • NB: This course cannot be taken with ECON 207.

Course Description

This module introduces students to the fundamental theoretical tools required to study microeconomics. The module requires algebra, elementary calculus, logical thinking, and problem solving ability. The topics it covers include utility maximization, profit maximization, cost minimization, and introduction to market structures.

Educational Aims

By the end of this course, students should have a knowledge and understanding of:

• Analytical methods, both theory and model based
• The relevance of different theoretical approaches to public policy and business problems

Outline Syllabus

• Theory of Demand: The axioms of choice and rational behaviour; the concept of a utility function; the relationship between utility and preference; the preference map and the indifference curve; income and substitution effects; derivation of demand from the indifference curve; revealed preference.
• Risk and Uncertainty: Expected utility; risk aversion; adverse selection and moral hazard; the market for lemons; the demand for insurance.
• Theory of Production and the Demand for Factors of Production: the short and long run production function; total, marginal and average concepts; output elasticity; concepts of marginal revenue product and the link with the demand for factors of production; demand for factors under perfect and imperfect competition.
• Cost Theory: Derivation of cost curves from short and long run production functions; the relationship between output and cost elasticity; the implications of returns to scale for the firm's cost curves; the supply curve of the firm.
• Introduction to market structure: The short run and long run; Perfect Competition; Monopoly; introduction to Oligopoly
• Information economics: Asymmetric Information; Adverse Selection; Signalling; Screening; Pooling and Separating Equilibria; Principal-Agent problem; Moral Hazard

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON221: Intermediate Microeconomics II

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • ECON 220 or equivalent.
  • NB: this course cannot be taken with ECON 207.

Course Description

This module continues the development of intermediate microeconomic analysis from ECON220. The topics it covers include market structures, externalities, information economics, public goods, general equilibrium and welfare economics.

Educational Aims

This course is designed to extend the knowledge of the principles of microeconomics which students acquired in their first year. Although the main focus of the course is on microeconomic theory, this is taught within the context of applications and policy analysis.

Outline Syllabus

• Inter-temporal Consumption and Production. Preferences and the budget constraint; inflation and present value.
• Game Theory and Oligopoly: noncooperative oligopoly; Cournot, Bertrand and Stackelberg; normal and extensive form games; dominated strategies; Nash equilibrium and applications.
• Game Theory and Oligopoly: cooperative oligopoly; cartels and tacit collusion; stability.
• Introduction to welfare economics: general equilibrium theory and resource allocation; the Edgeworth Box; Pareto efficiency; aggregation of preferences; social welfare functions
• Market failures: social and private costs; social and private benefits; externalities, public goods and welfare maximisation.
• Natural monopoly; consumer surplus; producer surplus; price discrimination; regulation

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON222: Intermediate Macroeconomics I

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Introductory Macroeconomics and Mathematics.
  • NB: this course cannot be taken with ECON 208.

Course Description

This module is designed to extend the knowledge of the principles of macroeconomics which students acquired in their first year. Although the main focus of the module is on macroeconomic theory, this is taught within the context of current events in the international macroeconomic environment. Students are encouraged to use their knowledge of macroeconomic theory to gain a better understanding of current macroeconomic events and issues. Topics include:

• Classical and Keynesian views
• The role of money
• Real balance and wealth effects
• The government budget constraint
• Monetary policy in the UK
• Models of exchange rate determination

Educational Aims

By the end of this course, students should have a knowledge and understanding of:

• Analytical methods, both theory and model based
• The relevance of different theoretical approaches to public policy and business problems
• The international economic environment in the UK and the impact of external factors on macro economic performance and policy with particular reference to the UK economy

Outline Syllabus

• The economy in the long run: the classical model of the macro-economy
• The macro-economy in the short run. Flexible wages and prices, and the Aggregate demand/Aggregate Supply
• The budget constraint and the effectiveness of macro-policy
• Monetary policy with special reference to the UK
• The Open Economy. Theories of exchange rate determination

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON223: Intermediate Macroeconomics II

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Prerequisites: ECON 222 or equivalent.
  • NB: this course cannot be taken with ECON 208.

Course Description

This module emphasises the application of macroeconomic theory to current policy issues. Considerable emphasis is placed on the use of analytical tools for gaining a better understanding of the workings of the macro-economy and the ways in which policy makers respond to macroeconomic problems. Topics include:

• Unemployment and inflation
• Adaptive and rational expectations
• Policy effectiveness under rational expectations
• The economics of independent central bank
• Growth theory.

This module is normally taken in conjunction with ECON222.

Educational Aims

By the end of this course, students should have a knowledge and understanding of:

• Analytical methods, both theory and model based.
• The relevance of different theoretical approaches to public policy and business problems.
• The international economic environment in the UK and the impact of external factors on macro economic performance and policy with particular reference to the UK economy.

Outline Syllabus

• Expectation Formation and Unemployment and Inflation. The Phillips curve.
• An Introduction to dynamic Analysis: Solving First and Second Order linear. Difference Equations.
• The Economics of Independent Central Banks.
• The economy in the long run: the neoclassical theory of economic growth and endogenous growth theory.

Assessment Proportions

• Coursework: 40%
• Exam: 60%

ECON224: Introduction to Economics for Managers

• Terms Taught: Michaelmas Term only
• US Credits: 8 Semester Credits
• ECTS Credits: 15 ECTS
• Pre-requisites:
  • High school mathematics.
  • NB: this course is only available to students with no prior background in Economics.

Course Description

The module provides an introduction to microeconomics and macroeconomics for students majoring in business related degrees and covers a range of important topics for understanding the economic foundations of business and the business applications of economics. The module covers the principal elements necessary to understand consumer and firm behaviour, and aggregate dynamics. The topics include:

• Choice and resource allocation
• Consumer behaviour and the determinants of demand
• Firm production decisions, cost curves and the determinants of supply
• The concept of market equilibrium, efficiency and the objectives and impacts of taxes and subsides
• The analysis of key types of market structure – competition, oligopoly and monopoly –, their implications for efficiency – prices, consumption and profits and an introduction to strategic behaviour
• Market 'failure' and why not all markets are efficient – covering 'externalities' such as pollution and education
• Measuring the overall performance of the economy and understanding their significance for policymakers and businesses -macroeconomic indicators, GDP and Aggregate Demand-
• Analyzing the fluctuations in economic activity over the business cycle and assessing methods for measuring inflation and changes in the cost of living.
• Insights into the labor market dynamics and unemployment: Examining the determinants of labor market outcomes, including labor force participation, and the causes and consequences of unemployment.
• Role of financial markets and Central Banks: Understanding the functions of financial markets in allocating capital and the role of central banks in monetary policy implementation
• Understanding of general equilibrium and the influence of demand-side and supply-side policies
• Investigating the interactions between domestic and international markets, including the determination of exchange rates and the implications of trade openness for economic welfare.

Educational Aims

• Course objectives: To provide an introduction to the analysis of economic issues from a business perspective, primarily for business major students. The course demonstrates the relevance of economic concepts and principles to business issues through teaching and application of introductory economic theory to a range of issues affecting economic aspects of the business environment.
• Key skills: To provide appropriate theoretical and analytical tools to facilitate a broad understanding of Microeconomics and Macroeconomics, with particular emphasis on interpreting the economic behaviour of individuals and firms.

Outline Syllabus

• Choice & Resource Allocation & the Determinants of Demand
• Demand Elasticities; Supply & the Theory of the Firm
• Equilibrium & Surplus; Market Failure; Taxes & Subsidies
• Firm Costs, Revenue & Profit; Firms in Competitive Markets
• Imperfectly Competitive Markets, Monopoly & Oligopoly
• Macroeconomic Indicators, Business Cycle, and Inflation
• Unemployment & Financial Market
• General Equilibrium & Demand-Side Policy
• Phillips Curve, Supply-Side Policies, Open Economy

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON228: Games and Strategic Behaviour

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Introductory Economics
  • There may be limited places available

Course Description

This module aims to familiarise students with strategic decision-making and develop analytical skills which can be used in different strategic situations. Students will be provided with the knowledge, understanding and skills required to set up and solve models as a means of analysing economic problems using game theoretical tools. By the end of this module, students should be able to engage in abstract thinking by extracting the essential features of complex systems to facilitate problem-solving and decision-making. As well as being able to apply appropriate mathematical techniques to the analysis of both micro and macro-economic phenomena.

Educational Aims

On successful completion of this module, students should have a knowledge and understanding of how to:

• Model different games
• Apply game theoretic solution concepts to find appropriate predictions in games
• Address economic problems using relevant techniques
• Apply game theory methods to analyse the behaviour of economic agents and the interactions within the economic system
• Interpret the results of the modelling process in the context of economic problems

Outline Syllabus

• Overview and Introduction to Game Theory
• Basic Models (Simultaneously played games)
• Basic Models (Sequentially played games)
• Pure Strategy Nash Equilibrium
• Mixed Strategy Nash Equilibrium
• Refinements (Trembling hand perfect equilibrium, Rollback equilibrium)
• Repeated Games
• Bayesian games and simple applications
• Correlation
• Introduction to Bargaining and Auctions

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON321: Sports Economics

• Terms Taught: Michaelmas term only
• US Credits: 4 semester credits
• ECTS Credits: 8 ECTS
• Pre-requisites: Intermediate Microeconomics.

Course Description

This course aims to provide students with detailed understanding of the application of theoretical and empirical models to the field of sports, to explore policy issues impinging on the competitive balance, and uncertainty of outcome in professional team sports leagues. The course requires the knowledge of basic analytical tools including graphs, calculus, basic algebraic manipulation and appreciation of econometric and other evidence. By the end of this module, students will have enhanced their knowledge of applied microeconomics as applied to the sports sector. The module aims to enhance student ability to undertake logical and structured problem-based analysis, to present clearly technical materials relevant to the sector and to appreciate actual economic problems facing stakeholders and policy makers.

Educational Aims

On successful completion of this module students will be able to:

• Critically evaluate the theoretical literature relating to economics of sport;
• Demonstrate an awareness of the distinctive characteristics of labour and product markets in professional sports, and their implications for economic analysis;
• Demonstrate an appreciation of the role of the empirical work in testing the various theories;
• Understand the implications of theoretical and empirical work in the economics of sport for policy issues including competitive structures in sport leagues, free agency and player mobility, and the financing of professional sport;
• Understand why people gamble on sports and how betting markets function

Outline Syllabus

• Principles of sporting competitions: what do clubs maximise, wins or profits? Open and closed leagues. Uncertainty of outcome.
• Attendance demand: roles of prices, income and market size. The travel cost method of estimating price elasticity.
• Ticket pricing: price discrimination, season tickets, dynamic ticket pricing, secondary markets.
• Broadcast markets: the supply of broadcasting, is Sky a monopolist? Audience demand. Consumer surplus in the broadcast market. Collective versus individual selling of TV rights.
• Betting markets (1): why do people gamble on sports events?
• Betting markets (2): the favourite-longshot bias: evidence and rationales
• Betting markets (3): testing for market inefficiencies, the roles of insider trading and sentiment, do inefficiencies persist? Anomalies in sports betting
• Player labour markets: salary determination, pay and performance in sports, team production, superstar effects.
• The market for head coaches: do head coaches make a difference to team performance? Does firing a head coach raise team performance?
• Stadium economics: assessing the value of a new stadium, private and public funding of stadia; rent-seeking behaviour.

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON322: Health Economics

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Microeconomics

Course Description

The purpose of this module is to introduce students to the economics of heath and health care. The module provides a comprehensive set of economic tools to critically appraise fundamental issues in the economics of health while offering a broad overview of the UK National Health Service and other health care systems around the world. The emphasis is on the use and interpretation of microeconomic models and the most current empirical evidence.

Educational Aims

On the successful completion of this module students will:

• Have a comprehensive knowledge of the major theories and evidence in the field of health economics
• Have an overview and understanding of the main policy issues in health and health care
• Have gained further experience of how to apply basic microeconomic principles to address issues of resource allocation,
• Be able to argue coherently about the efficiency of allocation mechanisms,
• Have developed their awareness of methodological issues surrounding the effectiveness of policies

Outline Syllabus

• Health economics: a global overview
• Production of health
• Demand for health capital
• Health insurance
• Market and market failures
• Cost-benefit analysis principles in health
• Statistical tools for Health Economics
• Equity in health and health care
• Doctors and the health workforce
• Population health and public health interventions

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON323: Public Policy Analysis

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Microeconomics

Course Description

The objective of this module is to study the role of the public sector in the economy.

One part of the module is the study of government policy: Public Economics. This includes topics such as the provision of public goods, the design of taxation, tax competition, and healthcare and pension system.

The other part studies the government itself: Political Economy. This includes topics such as the properties of different electoral systems, the role of politicians, and the impact of decentralization.

Most of the lectures are dedicated to the study of the major theoretical models, while the tutorials are used to review empirical evidence and critically assess the models.

Educational Aims

• Identifying the characteristics of public goods, and their optimal and efficient provision
• Explaining the basic characteristics of a tax system, both under classical hypotheses and under a richer political economy approach
• Understanding the effects of globalisation and international mobility of capital and labour on modern tax systems
• Being able to understand the theoretical and practical implication of a federal institutional setup on taxation and public good provision
• Engage with the most recent research literature and the current affairs pieces of news in order to criticize and assess how the economic models help us to understand reality
• Understand and present the policy implication deriving from the economic models, and critically analyse how these implication depend on the modeling techniques
• Synthesize effectively the current literature in a topic so to explain succinctly and clearly to a class or in an exam. Confidently possess the basic concepts of both classical and contemporary public economics, engaging with economic models and econometric findings.

Outline Syllabus

• Why the Public Sector, what's the role of bureaucracy ? Some statistics.
• Public good provision: Samuelson, Lindahl, Groves-Clark
• Asymmetric Information in the Public Sector
• Voting
• Optimal Commodity Taxation
• Optimal Income Taxation
• Tax Evasion
• Fiscal Federalism
• Tax Competition and Intergovernmental Grants
• Social Security

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON324: Advanced Macroeconomics

• Terms Taught: Michaelmas Term Only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Intermediate Macroeconomics
  • Intermediate Quantitative Methods

Course Description

The course introduces state-of-the-art methods used in current macroeconomics research to understand short-run business cycle dynamics and economic stabilization policies. We will develop a broad and deep knowledge of modern Dynamic Stochastic General Equilibrium (DSGE) macroeconomic models that employ microeconomic foundations and rational expectations. We will learn how to solve these models by using advanced analytical and numerical approaches.

In particular, we will develop and understand the workings of the Neoclassical Real Business Cycle (RBC) and the New Keynesian (NK) models that have become the bedrock of modern business cycle analysis. We will use these frameworks to understand the different sources of aggregate economic fluctuations, and to examine the positive and normative roles of fiscal and monetary policies. In addition, we will study contemporary issues such as financial frictions, government debt financing through distortionary taxation, and optimal (un)conventional monetary and fiscal policies in a liquidity trap. The emphasis of the module is on the application of theory to these issues. At a more hands-on level, computer programs involving Dynare and Matlab will be jointly studied and used to calibrate, estimate, simulate, and solve macroeconomic models. Learning macroeconomics as a quantitative science with computational techniques provides an additional skillset to apply the theoretical knowledge. ECON 324 provides a solid foundation for a macroeconomics dissertation, a postgraduate degree in Economics, and advanced research projects in academia, economic think-tanks, policy institutions, and central banks.

This module requires a proficient level of algebra and calculus at a level of 2^nd year undergraduate economics. We will make an extensive use of basic equation solving, differentiation, dynamic constrained-optimization problems using Lagrangian methods, and log-linear techniques. While some of these methods will be covered in class, it is vital you refresh and revise your mathematical knowledge from previous studies before the beginning of the course. It is also assumed that you are already familiar with basic macroeconomic analysis – especially with the standard IS-LM model and aggregate demand – aggregate supply determination

Educational Aims

Upon successful completion of this module, students should be able to:

• Analyse problems by identifying appropriate economic models and select the relevant techniques to solve those problems.
• Understand the importance of micro-foundations and rational expectations in explaining business cycle dynamics.
• Understand the different sources and shocks that trigger the business cycle.
• Understand the positive and normative roles of central banks and governments in periods of economic uncertainty and liquidity traps.
• Use programming techniques to simulate and analyse DSGE models. See Dynare for the programming software that runs on Matlab and that is used to simulate DSGE models.
• Use rigorous economic arguments to justify policy conclusions.

Outline Syllabus

• Part I: The Real Business Cycle Model
• Part II: Policy Analysis in the Real Business Cycle Model
• Part III: The New Keynesian Model
• Part IV: Optimal Policy in the New Keynesian Model

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON325: Advanced Microeconomics

• Terms Taught: Lent Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Intermediate Microeconomics
  • Intermediate Quantitative Methods

Course Description

The module develops advanced topics in the field of microeconomic analysis, with an emphasis on formal mastery as well as intuitive interpretation and understanding. Topics include: General equilibrium, the core, the Robinson Crusoe economy, prices and decentralisation, decision making under risk and uncertainty, intertemporal choice, game theory, and information economics.

Educational Aims

By the end of this course, students should have knowledge and understanding of the nature and importance of the logical underpinnings of economics as a discipline, and of the value of microeconomic theory in explaining a wide range of observed phenomena.

Outline Syllabus

• General Equilibrium Theory
• Information
• Introduction to Choice Theory
• Game Theory

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON326: Monetary Macroeconomics

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Macroeconomics

Course Description

The module covers the foundations of monetary economics. Starting from an overview of the evolution of the study of monetary policy, the course introduces students to the analysis of simple models in which knowledge of microeconomic and macroeconomic theory are combined in order to understand the role of monetary policy.

In the second part of this course students will focus on applications of monetary theory to central banks problems and the recent objectives of the Bank of England Monetary Policy Committee. Topics include: The Real Business Cycle model and the money neutrality, the New Keynesian approach to monetary policy analysis, monetary policy in a monetary union, the role of the central bank, the instrument choice problem and the need of independency and the macro-prudential policy and the financial crisis.

Educational Aims

This module aims to enable students to:

• Understand the conduct of monetary policy; rational expectations; stabilisation policy; the role of central banks and their interactions with financial markets.
• Use theory to evaluate monetary policy and to interpret events

Outline Syllabus

• Empirical Evidence on Money, Prices, and Output and a Macro Theory Review
• DSGE Models for Monetary policy
• Nominal Rigidities, Monopolistic Competition and the New Keynesian Model
• Monetary Policy Analysis in New Keynesian Models Directions. (Here)
• Open Economy and Monetary Unions
• The Instrument Choice Problem
• Inflation Targeting
• Independent Central Banks The Barro Gordon Model
• The Financial Crisis and Macro prudential Policy
• Monetary- Policy Operating Procedures
• Term Structure and Financial Markets

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON327: Labour Economics

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Intermediate Microeconomics
  • Intermediate Quantitative Methods.

Course Description

This module focuses on the microeconomics of labour. It begins with a consideration of the demand for and supply of labour, and explores situations in which the market operates to equate these. In many situations, there are however institutions that might prevent the labour market from clearing. Jobs reflect long term relationships between those who supply labour and those who demand it, and so the labour market cannot be expected to operate like a spot market. The module covers topics such as education and skills, migration, unemployment, discrimination, firms’ monopsony power and unions’ monopoly power, minimum wages, and inequality. The final topic explored falls within the area of personnel economics with a particular emphasis on principal agent problems in human resources and the design of incentives within firms.

Educational Aims

Upon completion of this course, you should be able to:

• Understand the methods of applied and theoretical economics in the context of the economics of labour and human resources
• Use methods of economic analysis when confronted by previously unseen labour market problems
• Engage in abstract thinking by extracting the essential features of complex systems to facilitate problem solving and decision-making
• Engage in deductive and inductive reasoning to enhance problem solving and decision-making skills
• Apply theoretical, historical and quantitative methods to the analyses of HR issues and problems
• Plan and manage your time effectively in relation to deadlines whilst displaying individual initiative and enterprise
• Conduct individual assignments and perform effectively in a group environment by demonstrating leadership and team-building qualities
• Demonstrate a logical argument, analyse and interpret data and evaluate alternative perspectives on the basis of objective reasoning
• Communicate and present complex arguments in oral and written form with clarity and succinctness
• Understand the nature of incentives and opportunity costs in decision-making
• Think in marginal terms about the trade-offs involved in public policy and business decision-making
• Work effectively both individually and within a team environment

Outline Syllabus

• Introduction, Labour Supply and Demand
• Labour Market Equilibrium, Wage Determination and Policy
• Human Capital and Training
• Wage gap and labour market discrimination
• Earnings inequality and wage structure
• Unemployment and job search
• Unions and employment protection legislation
• Principal agent problems, incentive pay and CEO pay

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON328: Behavioural and Experimental Economics

• Terms Taught: Michaelmas Term
• US Credits: 4 US Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: ECON228 Games and Strategic Behaviour AND ECON207 Microeconomic Analysis OR ECON220 Intermediate Microeconomic 1

Course Description

Course aims and objectives, key skills and learning outcomes

The aim of the course is to familiarise students with the field of Behavioural and Experimental Economics. The traditional economic theory is based on the assumption of perfectly rational economic agents. Students will obtain an overview of how experimentation can be exploited in economics to test theories, will be introduced to theoretical models that use insights from other social sciences (e.g. psychology, sociology) to extend standard economic models in order to account for behavioural biases and will get introduced on how to analyse and interpret experimental data. Prior to enrolment to the module, students must have successfully completed: ECON220 or ECON207; and ECON228

Educational Aims

Course aims and objectives, key skills and learning outcomes

On successful completion of this module students will be able to:

• Critically approach and assess the assumptions of standard economic theory and perfect rationality
• Have a general understanding of the usefulness and the limits of the standard economic theory
• Consider alternative explanations when deviations from the optimal predicted behaviour are observed

Outline Syllabus

This course will introduce students to the field of Behavioural and Experimental Economics. The course provides the necessary skills to study how the standard rationality assumptions can be relaxed in order to account for psychological and cognitive biases as well as social preferences. In addition, it introduces students to the tool of experimentation in economics as a means of collecting data to test the various economic theories. Some of the topics include behavioural finance rational emotions, nudging, choice under risk, time preferences, social preferences and behavioural game theory.

Assessment Proportions

Subject to final approval:

• 67% Exam
• 33% Coursework

Coursework assessment and deadlines

The coursework takes the form of a 15-minute group presentation.

Final marking information

This course is assessed by means of formal examination and coursework. The assessment will be based on 2 items: a final exam and a 15-minute group presentation. The final exam for the course takes place in May/June of the current academic year and accounts for 67% of the final mark. The coursework, which accounts for 33% of the final mark, requires students to prepare a 15-minute group presentation for a research proposal. This presentation should contain a short introduction, a research question, (at least) one hypothesis, and an innovative experimental design. The presentation is a group project and will be assessed during tutorials in Weeks 9 and 10.

ECON330: Econometrics

• Terms Taught: Michaelmas Term only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites:
  • Introductory Econometrics
  • NB: This course is only available to students who are spending a full academic year at Lancaster

Course Description

This module provides up-to-date theoretical and quantitative econometric methods necessary to conduct applied research in economics/policy analysis. Relevant mathematical and statistical techniques of key topics in econometrics will be emphasised. Topics include linear regression, instrumental variables, causal inferences, binary choice models, panel data, time series modeling, and forecasting. Applied work is carried using econometrics software, Stata.

Educational Aims

This course aims to equip students with the tools necessary to conduct applied econometrics. While students will be given an analytical and intuitive understanding of the classical linear regression model, they will also be studying newer topics such as specification tests, binary choice models, Tobit analysis, sample selection bias, non-stationary time series, and unit root tests and basic cointegration.

Outline Syllabus

Topic 1: Introduction and Linear Regression

• Basic Statistics Review
• Simple and Multiple Linear Regression Models
• Ordinary Least Squares (OLS) Estimation and Large Sample Properties
• Heteroscedasticity and Autocorrelation
• Hypothesis Testing and Inference
• Causal Inference and Potential Outcome Framework

Topic 2: Simultaneous Equation Models and Casual Inferences

• Endogeneity
• Instrumental Variables (IV) Estimation and Two Stage Least Squares (2SLS)
• Regression Discontinuity Designs

Topic 3: Limited Dependent Variables

• Linear Probability Model
• Probit and Logit models

Topic 4: Panel Data Models

• Basic Panel Data Analysis
• Fixed Effects (FE) and Random Effects (RE) Models
• Differences-in-Differences

Topic 5: Time Series Econometrics

• Definitions and Concepts
• Autoregressive (AR) and Autoregressive-Distributed Lag (ADL) models
• Unit Roots and Unit Roots Tests; Spurious Regression
• Co-integration Analysis; Error Correction Models
• Structural breaks
• Forecasting

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON331: Industrial Organisation

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Microeconomics

Course Description

This module focuses on firm behaviour and competition, using theoretical (especially game theoretic) models. The relationship between industry structure and firm conduct is explored, together with aspects of firm behaviour such as advertising, R&D mergers, barriers to entry and regulation.

Educational Aims

Course Aims and Objectives:

• To understand the crucial role of strategic thinking in firm decision making
• To apply theoretical micro-economics methods to understand firms and regulators decisions
• To use empirical economics research methods to understand the behaviour and development of firms, markets and industries
• To understand current themes in the industrial economics literature

Outline Syllabus

• Introduction to Industrial Economics and The Nature of The Firm
• Measures Structure, Conduct and Performance
• The Structure Conduct Performance Debate
• Product Differentiation and Advertising
• Research and Development
• Firm Ownership: Privatisation and Regulation
• Barriers to Entry and Strategic Entry Deterrence
• Horizontal Mergers
• Vertical Integration
• Cartels and Competition Policies

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON332: Development Economics

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Micro and Macroeconomics

Course Description

This module provides an introduction to the theories and problems of economic development – it focuses on economics of growth and development, both from a theoretical and empirical perspective. The module would provide appropriate theoretical and analytical tools to facilitate a broad understanding of economic development, with particular emphasis on developing and emerging economies. Specifically, it begins with focusing on theoretical aspects such as Solow growth models, Endogenous growth models, theories of informal credit markets and then continue to empirical issues such as education, health, infrastructure, institutions, conflicts, etc.

Educational Aims

By the end of this course students should have an understanding of:

• Basic economic theories of growth and development.
• The application of relevant theories to the growth experience of several economies.
• The range of alternative growth policies that may be used to achieve development.
• The inter-disciplinary nature of the subject of development economics.
• Themes in micro- and macro-economics on the basis of specialist knowledge and understanding.

Outline Syllabus

• Introduction to Economic Growth Development
• Economic Growth, Convergence and Endogenous Growth Theory
• Inequality and development
• Internal migration
• India as an Emerging Economy
• Topics in micro-development: Labour Markets
• Topics in micro-development: Land tenure and contracts
• Topics in Development: Financial Markets Micro-Credit
• Trade and Development

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON333: International Trade

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Micro and Macroeconomics

Course Description

The focus of this module is in developing models which explain why countries trade with each other, and the implications of such trade. It develops understanding of concepts and theories of international trade and factor flows, including government policies on international trade. Topics covered include trade theories under perfect and imperfect competition, and trade policies under perfect and imperfect competition.

Educational Aims

This course aims to:

• Introduce students to the basic concepts and theories of international trade
• Train students in the application of trade theories to the analysis of policy issues relating to international trade
• Train students in methods of economic analysis and problem solving.

Outline Syllabus

• Introduction. The Ricardian Model of Trade
• The specific factors model of trade
• The Heckscher-Ohlin Model of Trade
• International factor mobility
• Imperfect Competition, Economies of Scale and International Trade
• Offshoring of goods and services
• Further topics in trade theory
• Trade policies under perfect competition
• Trade policies under imperfect competition
• Further topics in trade policy

Assessment Proportions

• Coursework: 33%
• Exam: 67%

ECON334: International Business

• Terms Taught: Lent / Summer Terms only
• US Credits: 4 Semester Credits
• ECTS Credits: 7.5 ECTS
• Pre-requisites: Intermediate Micro and Macroeconomics

Course Description

This module is concerned with the role of international business in globalisation and its impacts through the analysis of the growth and evolution of established and internationalising firms and their role in the ‘global factory’.

The module covers core topics in international business: explaining globalisation –the first and second waves; key drivers of globalisation – the liberalisation of trade, capital and foreign direct investment (FDI); global trends in R&D and innovation; competitive advantage, and the role of international division of labour in international production. Applied topics covered include: strategic interaction between international firms; the evolving ‘global factory’ – the growth of ‘out-sourcing’ and networks; home and host country impacts of the global factory – employment, technology transfer, trade and inequality; risk and risk management in international business; transfer pricing issues; and the cost of capital in international business.

Educational Aims

This module aims to provide an introduction to the economic analysis of International Business and Finance though the teaching and application of core theory to critical issues in the subject. This permits an improved understanding of the activities of, and interaction between, multinational enterprises (MNEs) in the international economy together with international financial management. The course critically examines the evolution of theories of MNEs, International Business and exchange rate determination.

Outline Syllabus

• International Business & Globalisation.
• The Market Imperfections Approach to International Business.
• Technology & Competitive Advantage in International Business.
• The Internationalisation of International Business.
• International Market Entry, Competition & Strategic Interaction.
• Risk in International Business.
• Foreign Exchange Risk Management.
• Foreign Exchange Derivative Contracts.
• Financing FDI I: the Cost of Debt.
• Financing FDI II: Equity & Portfolio Diversification.

Assessment Proportions

• Coursework: 33%
• Exam: 67%