# Economics

28 Hillhouse Avenue, 203.432.3575

http://economics.yale.edu

M.A., M.Phil., Ph.D.

**Chair**

Dirk Bergemann (28 Hillhouse, 203.432.3571)

**Director of Graduate Studies**

Truman Bewley (30 Hillhouse, Rm. 30, 203.432.3719, truman.bewley@yale.edu)

**Professors** Joseph Altonji, Donald Andrews, Dirk Bergemann, Steven Berry, Truman Bewley, Xiaohong Chen, Zhiwu Chen (*Management*), Ray Fair, Howard Forman (*Public Health*), John Geanakoplos, Pinelope Goldberg, Timothy Guinnane, Philip Haile, Johannes Hörner, Jonathan Ingersoll (*Management*), Gerald Jaynes, Dean Karlan, Yuichi Kitamura, Alvin Klevorick, Samuel Kortum, Naomi Lamoreaux, Giovanni Maggi, Costas Meghir, Robert Mendelsohn (*Forestry & Environmental Studies*), Giuseppe Moscarini, William Nordhaus, Peter Phillips, Benjamin Polak, Mark Rosenzweig, Larry Samuelson, Robert Shiller, Anthony Smith, Aleh Tsyvinski, Edward Vytlacil, Ebonya Washington, Fabrizio Zilibotti

**Associate Professors** Konstantinos Arkolakis, Eduardo Faingold, Amanda Kowalski

**Assistant Professors** Timothy Armstrong, José-Antonio Espín-Sánchez, Mira Frick, Zhen Huo, Mitsuru Igami, Ryota Iijima, Daniel Keniston, Ilse Lindenlaub, Yusuke Narita, Michael Peters, Nicholas Ryan, Joseph Shapiro

## Fields of Study

Fields include economic theory, including microeconomics, macroeconomics, mathematical economics; econometrics; economic history; labor economics; industrial organization; financial economics; behavioral finance; public economics; public finance; international trade; international finance; economic development; behavioral economics; law and economics.

## Special Admissions Requirements

Please see http://economics.yale.edu/graduate/application-info.

## Special Requirements for the Ph.D. Degree

Exceptions to the requirements described below may be obtained only by vote of the Economics faculty and will be granted only in recognition of extenuating circumstances.

### Prior to Registration for the Second Year

(1.1) Students must have taken for credit and passed at least six economics graduate courses. (Courses in the International and Development Economics master’s program do not satisfy this requirement.) (1.2) Students must pass written comprehensive examinations in microeconomics and macroeconomics. These are given in May and late August each year. One or both may be taken in the August just prior to the first year of study with permission of the director of graduate studies (DGS). Examinations not passed prior to the first year of study must be taken in the spring term of the first year. In the event of failure, the failed exam must be retaken the next time it is offered. Students may take each comprehensive exam no more than two times. Students who have not passed both examinations prior to the second year of study may register as master’s candidates for the following fall term for the purpose of completing enough courses to be eligible for the M.A. degree. The microeconomics and macroeconomics comprehensive exams will be given on two different days for at least three hours. The examinations scheduled in the spring term will occur approximately a week after the end of course exams. The questions on the comprehensive exams will be on topics taught in the first-year microeconomic and macroeconomic courses of the immediately preceding year. Each exam will be graded separately. In the event of failure, students will retake only the exam they did not pass. Comprehensive exams taken by students prior to their first year will be graded as a pass only if they are a “solid” pass rather than a “minimal” pass.

### Prior to Registration for the Third Year

(2.1) Students must have met the Graduate School’s requirement of Honors in two courses. (2.2) Students must have taken at least fourteen term courses in economics and have received a grade of at least a P- in each of them. With the permission of the DGS, courses in related fields and independent reading courses can be used to fulfill this requirement. Workshops may not be used to satisfy it. (2.3) Students must have received an average of at least HP in the courses they have taken. The admissibility of courses for this requirement is the same as for the fourteen-course requirement, (2.2). Grades within the Economics department include pluses and minuses. The grade average is computed as follows. A failure counts as a zero, a P- as a 1, a P as a 2, a P+ as a 3, an HP- as a 4, and so on up to a 9 for an H+. The arithmetic average of these numbers must be at least 4.5. (2.4) All students must have submitted a draft of their applied econometrics paper, discussed under (3.3) below. (2.5) All students must make their first attempt at each of two oral qualifying examinations by June 30 of their second year in the program. The examinations test a student’s general analytic ability in economics and knowledge of two fields chosen by the student. At least one of the fields must have substantial empirical and institutional content. Such applied fields are drawn from a departmental list that includes labor economics, market organization, macroeconomics, financial economics, behavioral economics, economics of the public sector and of the environment, international trade and finance, economic development, economic history, and comparative economic systems. Students may also choose as one of their fields mathematical economics, advanced micro- or macroeconomic theory, or econometric theory. Students may request examination in a special field designed in consultation with Economics department faculty. The choice of fields must be approved by the DGS. Students may take the oral examination in one field no more than twice. An oral examination that was failed on the first attempt must be retaken in the fall of the third year, and the retake must be in the same field. Students may list two preferred examiners in each field. The DGS’s office strives to satisfy these preferences subject to faculty availability and the number of students making similar requests. Students are required to provide field sheets for each exam which list the literature and topics or subfields on which they wish to be examined. Students should consult faculty members as they prepare this list. Students are expected both to have command of the general field of the exam and to know in depth the material in the areas they specify. The examinations are normally question-and-answer on this material, but examiners are not required to restrict questioning to it. The broader the topics listed, the more likely examiners are to confine questioning to them.

### Admission to Candidacy

The Economics department adheres strictly to the Graduate School requirement that students be admitted to candidacy prior to registration for the fourth year of study. Students are recommended to the Graduate School for admission to candidacy by vote of the Department of Economics faculty after having completed requirements (2.1), (2.2), and (2.3) above, the Graduate School’s prospectus requirement, and the following additional requirements. (3.1) Students must have completed two one-term prospectus workshops, one in each term of the third year. All prospectus workshops have the word “prospectus” in their title. If students can find no prospectus workshop corresponding to their interests, they may substitute other workshops to meet this requirement. In order for two workshops to count toward the prospectus requirement, students must make a presentation in each workshop and present original work in one of them. This stipulation applies even if a workshop is not labeled as a prospectus workshop. If students can find no workshop whatsoever in their area of interest, they may substitute an independent study course guided by a faculty member, provided the independent study leads to a dissertation prospectus that is accepted. (3.2) Students must receive a grade of HP- or better in ECON 551 (Econometrics II) or ECON 552 (Econometrics III). More advanced courses may be substituted for these with permission of the DGS. (3.3) Students must receive a grade of Satisfactory on an applied econometrics paper, which is evaluated by a faculty adviser of the paper and another faculty member. In the paper, the student should (a) specify an economic model useful for the investigation of an interesting economic problem, (b) select data and econometric methods appropriate to the question, (c) conduct proper statistical analysis, and (d) interpret the results in an intelligent way. The department’s posted description of the Applied Econometrics Paper Requirement should answer any questions about it. The paper may be written in the course ECON 556 or independently with the help of a faculty adviser, the standards for a satisfactory paper being the same in both cases. The paper is not expected to be of publishable or nearly publishable quality, but should demonstrate facility in the application of econometric methods to an economic question. *Note: *Jointly authored papers will not be accepted. (3.4) Students must complete with a grade of at least HP- a term of economic history, drawn from a list of courses approved by the DGS and the economic history instructors. (3.5) Students must pass two oral qualifying examinations given by committees of faculty members. These exams are discussed under (2.5) above.

### Additional Requirements

(1) All students must give a dissertation prospectus to their advisory committee by the second Friday in May of their third year. (2) Students must provide the names of their advisory committee to the DGS’s office by February 1 of the third year. (3) In each academic year after the second, all students must regularly attend at least two workshops. At least one of them must be an “informal” prospectus workshop lunch or reading group, and at least one must be a “formal” research workshop. Each student must present at least once a year in one or other of the workshops that they regularly attend. (4) Third-year students who have not yet satisfied the econometrics paper requirement must submit an econometrics paper by February 1.

### The Dissertation

The dissertation should make an original contribution to economics that demonstrates the student’s mastery of relevant resources and methods. Although the dissertation may cover several related topics, it should have a unifying theme. The dissertation may consist of one or more than one essay. The dissertation is guided by a committee of two advisers, at least one of whom must be a member of the Economics department. The second adviser need not be from the Economics department or even from Yale University. Second advisers from outside the Yale Economics department must be approved by the DGS. The two advisers serve as readers. After the student has completed a first draft of the dissertation, the DGS appoints a third reader. The student and the committee may recommend third readers, but the choice remains with the DGS, since the third reader serves as an independent referee.

### Collaborative Work on the Dissertation

The Economic department’s objective regarding collaboration is to achieve a reasonable compromise between two goals. While the department wishes to encourage collaborative research among students and between students and faculty, a dissertation should demonstrate the student’s ability to do independent research. A substantial part of a dissertation must present work done and written solely by the student. The dissertation committee and the DGS must approve the inclusion of collaborative work in the dissertation, and students must acknowledge and describe any collaboration in the preface to the dissertation.

### Expiration of Admission to Candidacy

Advancement to candidacy expires ten years after the date it is granted, if no dissertation has been submitted and approved in the intervening period.

### Normal Sequence of Courses

The following are recommendations, *not* requirements.

During the fall term of the first year, students usually take ECON 500 (General Economic Theory: Microeconomics), ECON 510 (General Economic Theory: Macroeconomics), ECON 550 (Econometrics I), and an economic history class that would satisfy the economic history requirement, (3.4) above, if a grade of at least HP- were obtained. In the following spring, they usually take ECON 501 (General Economic Theory: Microeconomics), ECON 511 (General Economic Theory: Macroeconomics), ECON 551 (Econometrics II), and a fourth course in economics or related subjects, such as probability theory, mathematics, finance, or political science. Students who are well prepared in econometrics may take an advanced econometrics course instead of ECON 550 in the fall of the first year after consulting the DGS and an appropriate econometrics faculty member.

During the second year, students normally take economics courses in specialized fields, such as industrial organization, mathematical economics, international trade, or public finance. These courses serve as preparation for the oral qualifying examinations. Students may also take courses related to economics from other departments. It is a good idea to satisfy the econometrics paper requirement in the second year and to locate a faculty adviser to advise them about their studies.

The third year is normally devoted to finding a dissertation topic and to beginning research on it. In this year, students are expected to make the transition from being a taker of classes to a participant in research. Important elements in achieving this transition are thinking critically about material learned, reading widely, choosing research topics that are feasible and of interest to the student, and gaining contact with faculty. Students can expect to take the initiative in making such contact.

## Master’s Degrees

**M.Phil.** The M.Phil. degree is awarded to students in the Ph.D. program upon completion of all the requirements for advancement to candidacy for a doctorate in economics except the prospectus and prospectus workshop requirements.

**M.A. (en route to the Ph.D.)** The M.A. degree is awarded upon completion of at least eight term graduate courses listed or cross-listed by the Department of Economics. At least six of these courses must be Ph.D. courses in the Department of Economics (not courses from the International and Development Economics master’s program). The average grade of all the graduate courses taken that are listed or cross-listed by the Department of Economics must be at least a High Pass, and at least two of these grades must be an Honors. Students must complete at least two of the three first-year two-course sequences in microeconomics, macroeconomics, or econometrics. In computing the grade average, the relevant grades are those reported to the registrar and so do not include pluses or minuses. A Fail counts as a zero, a Pass counts as a 1, a High Pass counts as a 2, and an Honors counts as a 3. To say that the average grade must be High Pass means that the arithmetic average of these numbers must be at least 2.

Students in doctoral programs other than Economics may earn an M.A. in Economics under the conditions listed in the previous paragraph. Such students automatically earn an M.A. in their own department when awarded a Ph.D., and Yale allows students to earn only one M.A. degree. Consequently, students must apply to have the M.A. in their own department replaced by the Economics M.A. This application must be made to the DGS of Economics and to the DGS of the student’s own department. Prior to this application, the student must have taken the first one-term course in at least one of the three first-year two-course sequences in microeconomics, macroeconomics, or econometrics and obtained a grade of at least High Pass. As part of the application, the student must submit a proposed list of economics courses, and this list must be approved by the two DGSs and by the appropriate dean of the Graduate School. The DGS of Economics must approve any deviation from this list, and this approval should be obtained before taking courses not on the list.

**Terminal Master’s Degree Program **Students working toward a J.D. in the Law School may earn an M.A. degree in Economics. The degree requirements that apply to these students are the same as those described above for the M.A. degree en route to Ph.D. for students in doctoral programs other than Economics. Students wishing to join this J.D./M.A. joint-degree program must apply for separate admission to the Economics graduate program. Students admitted to this program pay three years of tuition to the Law School and one year of tuition to the Graduate School. The Graduate School does not offer fellowship support to J.D./M.A. candidates.

The M.A. in International and Development Economics is described under International and Development Economics.

## Courses

**ECON 500a, General Economic Theory: Microeconomics** Truman Bewley and Mira Frick

Introduction to optimization methods and partial equilibrium. Theories of utility and consumer behavior production and firm behavior. Introduction to uncertainty and the economics of information, and to noncompetitive market structures.

MW 10am-11:20am

**ECON 501b, General Economic Theory: Microeconomics** Dirk Bergemann, Juuso Valimaki, and Ryota Iijima

General equilibrium and welfare economics. Allocation involving time. Public sector economics. Uncertainty and the economics of information. Introduction to social choice.

MW 9:30am-10:50am

**ECON 510a, General Economic Theory: Macroeconomics** Anthony Smith and Zhen Huo

Analysis of short-run determination of aggregate employment, income, prices, and interest rates in closed and open economies. Stabilization policies.

TTh 10:30am-11:50am

**ECON 511b, General Economic Theory: Macroeconomics** Giuseppe Moscarini

Theories of saving, investment, portfolio choice, and financial markets. Longer-run developments; economic growth, capital accumulation, income distribution.

TTh 10:30am-11:50am

**ECON 520a, Advanced Microeconomic Theory I** Mira Frick and Dov Samet

A formal introduction to game theory and information economics. Alternative non-cooperative solution concepts are studied and applied to problems in oligopoly, bargaining, auctions, strategic social choice, and repeated games.

M 4pm-7pm

**ECON 521b, Advanced Microeconomic Theory II** Juuso Valimaki, Stephen Morris, and Marina Halac

Contracts and the economics of organization. Topics may include dynamic contracts (both explicit and implicit), career concerns, hierarchies, Bayesian mechanism design, renegotiation, and corporate control.

MW 10:30am-11:50am

**ECON 522a and ECON 523b, Microeconomic Theory Lunch** Staff

A forum for advanced students to critically examine recent papers in the literature and present their own work.

T 12pm-1pm

**ECON 525a, Advanced Macroeconomics I** Anthony Smith and Zhen Huo

Heterogeneous agent economics, investment, scrapping and firing, nonquadratic adjustment costs, financial constraints, financial intermediation, psychology of decision making under risk, optimal risk management, financial markets, consumption behavior, monetary policy, term structure of interest rates.

F 9am-12pm

**ECON 526b, Advanced Macroeconomics II** Michael Peters and Fabrizio Zilibotti

Macroeconomic equilibrium in the presence of uninsurable labor income risk. Implications for savings, asset prices, unemployment.

MW 9am-10:20am

**ECON 530a, General Equilibrium Foundations of Finance and Macroeconomics** John Geanakoplos

The course gives a careful mathematical description of the general equilibrium underpinnings of the main models of finance and the new macroeconomics of collateral and default. Part I is a review of Walrasian general equilibrium, including the mathematical techniques of fixed points and genericity, both taught from an elementary point of view. Part II covers general equilibrium with incomplete markets (GEI). Part III focuses on the special case of the capital asset pricing model (CAPM), including extensions to multi-commodity CAPM and multifactor CAPM. Part IV focuses on the Modigliani-Miller theorem and generic constrained inefficiency. Part V describes collateral equilibrium and the leverage cycle. Part VI covers default and punishment and adverse selection and moral hazard in general equilibrium. Part VII describes monetary equilibrium.

W 4pm-7pm

**ECON 531b, Mathematical Economics II** Ana Fostel

This course examines the foundations of money and finance from the perspective of general equilibrium with incomplete markets. The relevant mathematical tools from elementary stochastic processes to differential topology are developed in the course. Topics include asset pricing, variations of the capital asset pricing model, the "Hahn paradox" on the value of flat money, default and bankruptcy, collateral equilibrium, market crashes, adverse selection and moral hazard with perfect competition, credit card equilibrium, and general equilibrium with asymmetric information.

T 4pm-7pm

**ECON 540a and ECON 541b, Student Workshop in Macroeconomics** Staff

A course that gives third- and fourth-year students doing research in macroeconomics an opportunity to prepare their prospectuses and to present their dissertation work. Each student is required to make at least two presentations per term. For third-year students and beyond, at least one of the presentations in the first term should be a mock job talk.

Th 12pm-1pm

**ECON 545a, Microeconomics** Michael Boozer

A survey of the main features of current economic analysis and of the application of the theory to a number of important economic questions, covering microeconomics and demand theory, the theory of the firm, and market structures. For IDE students.

MW 2:30pm-3:45pm

**ECON 546a, Growth and Macroeconomics** Fabrizio Zilibotti

This course presents a basic framework to understand macroeconomic behavior and the effects of macroeconomic policies. Topics include consumption and investment, labor market, short-run income determinations, unemployment, inflation, growth, and the effects of monetary and fiscal policies. The emphasis is on the relation between the underlying assumptions of macroeconomic framework and policy implications derived from it.

MW 9am-10:15am

**ECON 550a, Econometrics I** Donald Andrews

Probability: concepts and axiomatic development. Data: tools of descriptive statistics and data reduction. Random variables and probability distributions; univariate distributions (continuous and discrete); multivariate distributions; functions of random variables and transformations; the notion of statistical inference; sampling concepts and distributions; asymptotic theory; point and interval estimation; hypothesis testing.

MW 1pm-2:15pm

**ECON 551b, Econometrics II** Timothy Armstrong

Provides a basic knowledge of econometric theory, and an ability to carry out empirical work in economics. Topics include linear regression and extensions, including regression diagnostics, generalized least squares, statistical inference, dynamic models, instrumental variables and maximum likelihood procedures, simultaneous equations, nonlinear and qualitative-choice models. Examples from cross-section, time series, and panel data applications.

MW 1pm-2:15pm

**ECON 552b, Econometrics III** Yuichi Kitamura

The treatment of the subject is rigorous, attentive to modern developments, and proceeds to research level in several areas. Linear models from core curriculum. Topics include linear estimation theory, multiple and multivariate regressions, Kruskal's theorem and its applications, classical statistical testing by likelihood ratio, Lagrange multiplier and Wald procedures, bootstrap methods, specification tests, Stein-like estimation, instrumental variables, and an introduction to inferential methods in simultaneous stochastic equations.

M 5pm-6:20pm

**ECON 553a, Econometrics IV: Time Series Econometrics** Peter Phillips and Xiaoxia Shi

A sequel to ECON 552, the course proceeds to research level in time series econometrics. Topics include an introduction to ergodic theory, Wold decomposition, spectral theory, martingales, martingale convergence theory, mixing processes, strong laws, and central limit theory for weak dependent sequences with applications to econometric models and model determination.

F 1pm-4pm

**ECON 554b, Econometrics V** Xiaohong Chen

The first half of this course is about nonlinear parametric models. Specification, estimation, and testing within the Likelihood and Generalized Method of Moments frameworks. First-order asymptotics for both smooth and non-smooth objective functions. Efficiency and robustness. A short account of high-order asymptotics for smooth problems. The second part is on nonparametric and semiparametric methods. Nonparametric estimation by kernels, series, splines, and other methods. Bias reduction and bandwidth selection. The course of dimensionality and additive models. Specification and estimation of semiparametric models. U-statistics and asymptotic properties. Efficiency and adaptation.

Th 6pm-8:30pm

**ECON 556a, Topics in Empirical Economics and Public Policy** Yuichi Kitamura, Timothy Armstrong, and Yusuke Narita

Methods and approaches to empirical economic analysis are reviewed, illustrated, and discussed with reference to specific empirical studies. The emphasis is on learning to use methods and on understanding how specific empirical questions determine the empirical approach to be used. We review a broad range of approaches including program evaluation methods and structural modeling, including estimation approaches, computational issues, and problems with inference. Open only to doctoral students in the Department of Economics. Exceptionally, doctoral students from other departments may take the course for credit if a faculty member, normally from their department, can supervise and grade their term paper.

MW 10:30am-11:50am

**ECON 558a, Econometrics** Michael Boozer

Application of statistical analysis to economic data. Basic probability theory, linear regression, specification and estimation of economic models, time series analysis, and forecasting. The computer is used. For IDE students.

TTh 2:30pm-3:45pm

**ECON 559b, Development Econometrics (IDE)** Michael Boozer

TTh 2:30pm-3:45pm

**ECON 561b, Computational Methods in Economics** Anthony Smith

How to use computational methods to solve and analyze dynamic economic models. The first part of the course covers standard tools of numerical analysis that are useful in economics (minimization of functions, root-finding, interpolation, approximation of functions, integration, simulation). The second shows how to use these tools to study dynamic economic problems in macroeconomics, finance, labor economics, public finance, and industrial organization, paying special attention to methods for solving stochastic dynamic programming problems and for computing equilibria in economic models with heterogeneous actors.

MF 4pm-5:15pm

**ECON 562a / CPSC 512a, Designing the Digital Economy** Eric Weyl

Information technology is transforming how almost every market works: finance has been transformed by algorithmic trading and bitcoin, ridesharing is changing the nature of public transportation, Amazon is revolutionizing logistics, and Airbnb is now the most valuable accommodation provider in the world. This transformation, which has been led by start-ups and newly dominant technology companies, inherently combines technical and economic aspects, as entrepreneurs take advantage of the potential of technology to facilitate exchanges that were previously infeasible. This crash course in the key tools from economics and computer science that are being used to design digital markets exposes students to a range of concrete and topical practical problems in the area.

T 3:30pm-5:30pm

**ECON 570a and ECON 571b, Prospectus Workshop in Econometrics** Timothy Armstrong

A course for third- and fourth-year students doing research in econometrics to prepare their prospectus and present dissertation work.

M 12pm-1pm

**ECON 580a, General Economic History: Western Europe** Timothy Guinnane

A survey of some major events and issues in the economic development of Western Europe during the eighteenth and nineteenth centuries, stressing the causes, nature, and consequences of the industrial revolution in Britain and on the Continent, and the implications of the historical record for modern conceptions of economic growth. Prerequisites: simultaneous enrollment in or successful completion of ECON 500 and ECON 510; permission of the instructor.

TTh 9am-10:15am

**ECON 581b, American Economic History** Naomi Lamoreaux and Jose-Antonio Espin-Sanchez

This course examines both the long-term factors (such as industrialization and the development of markets) and the epochal events (such as the Revolution, Civil War, and Great Depression) that have shaped the development of the American economy. The objectives of this course are to familiarize students with the major topics and debates in American economic history. Prerequisites: concurrent enrollment in or successful completion of ECON 501 and ECON 510.

TTh 1:30pm-2:45pm

**ECON 591b, Economics of Poverty Alleviation** Michael Boozer

Measures that succeed and fail—and why—in the fight against poverty in developing countries. Fundamentals of behavioral economics and their application to policy and program design. When and how to use experimental methods to evaluate ideas and programs. Interventions and policies that apply to households, small firms, and communities, with particular attention to microfinance, health, and education.

F 1am-4am

**ECON 600a, Industrial Organization I** Philip Haile and Ying Fan

Begins by locating the study of industrial organization within the broader research traditions of economics and related social sciences. Alternative theories of decision making, of organizational behavior, and of market evolution are sketched and contrasted with standard neoclassical theories. Detailed examination of the determinants and consequences of industrial market structure.

TTh 10:30am-11:50am

**ECON 601b, Industrial Organization II** Steven Berry and Soheil Ghili

Examination of alternative modes of public control of economic sectors with primary emphasis on antitrust and public utility regulation in the U.S. economy. Public policy issues in sectors of major detailed governmental involvement.

TTh 10:30am-11:50am

**ECON 606a and ECON 607b, Prospectus Workshop in Industrial Organization** Staff

For third-year students in microeconomics, intended to guide students in the early stages of theoretical and empirical dissertation research. Emphasis on regular writing assignments and oral presentations.

Th 12pm-1pm

**ECON 630a, Labor Economics** Konstantinos Meghir

Topics include static and dynamic approaches to demand, human capital and wage determination, wage income inequality, unemployment and minimum wages, matching and job turnover, immigration and international trade, unions, implicit contract theory, and efficiency wage hypothesis.

TTh 9am-10:15am

**ECON 631b, Labor Economics** Joseph Altonji and Yusuke Narita

Topics include static and dynamic models of labor supply, human capital wage function estimation, firm-specific training, compensating wage differentials, discrimination, household production, bargaining models of household behavior, intergenerational transfers, and mobility.

TTh 9am-10:20am

**ECON 640a or b, Prospectus Workshop in Labor Economics and Public Finance** Staff

Workshop for students doing research in labor economics and public finance.

HTBA

**ECON 670a / MGMT 740a, Financial Economics I** Jonathan Ingersoll

Current issues in theoretical financial economics are addressed through the study of current papers. Focuses on the development of the problem-solving skills essential for research in this area.

MW 2:40pm-4pm

**ECON 672b / MGMT 745b, Behavioral Finance** Nicholas Barberis

Much of modern financial economics works with models in which agents are rational, in that they maximize expected utility and use Bayes's law to update their beliefs. Behavioral finance is a large and active field that studies models in which some agents are less than fully rational. Such models have two building blocks: limits to arbitrage, which make it difficult for rational traders to undo the dislocations caused by less rational traders; and psychology, which catalogues the kinds of deviations from full rationality we might expect to see. We discuss these two topics and then consider a number of applications: asset pricing (the aggregate stock market and the cross-section of average returns); individual trading behavior; and corporate finance (security issuance, corporate investment, and mergers).

HTBA

**ECON 674b / MGMT 746b, Financial Crises** Gary Gorton and Andrew Metrick

An elective doctoral course covering theoretical and empirical research on financial crises. The first half of the course focuses on general models of financial crises and historical episodes from the nineteenth and twentieth centuries. The second half of the course focuses on the recent financial crisis. Prerequisites: MGMT 740 and 741 (doctoral students in Economics may substitute the core microeconomics sequence), and permission of the instructor.

HTBA

**ECON 675a, Models of Operations Research and Management** Vahideh Manshadi

The course exposes students to main stochastic modeling methods and solution concepts used to study problems in operations research and management. The first half of the class covers analysis of queuing models such as Markovian queues, networks of queues, and queues with general arrival or service distributions, as well as approximation techniques such as heavy traffic approximation. The second half focuses on control of stochastic processes; it covers finite and infinite-horizon dynamic programming problems, and special classes such as linear quadratic problems, optimal stopping, and multi-armed bandit problems.

W 4:10pm-7:10pm

**ECON 680a, Public Finance I** Joseph Shapiro

Major topics in public finance including externalities, public goods, benefit/cost analysis, fiscal federalism, social insurance, retirement savings, poverty and inequality, taxation, and others. Applications are provided to crime, education, environment and energy, health and health insurance, housing, and other markets and domains. The course covers a variety of applied methods including sufficient statistics, randomized control trials, hedonic models, regression discontinuity, discrete choice, spatial equilibrium, dynamic growth models, differences-in-differences, integrated assessment models, applied general equilibrium, event studies, firm production functions, learning models, general method of moments, and propensity-score reweighting estimators.

T 1:05pm-4:10pm

**ECON 681b, Public Finance II** Staff

This course covers social insurance, health care, charitable giving, externalities, crime, and an introduction to political economy. Students are expected to participate actively in class discussion and to write and present a short empirical research paper.

W 2:30pm-5:30pm

**ECON 720a, International Trade I** Giovanni Maggi and Lorenzo Caliendo

The first part of this course covers the basic theory of international trade, from neoclassical theory where trade is the result of comparative advantage (Ricardo, Heckscher-Ohlin) to the “New Trade Theory” where trade is generated by imperfect competition and increasing returns to scale. Particular emphasis is placed on the implications of the different theories concerning the aggregate gains or losses from trade and the distributional implications of trade liberalization. The second part of the course explores new advances in the field. It covers the Eaton-Kortum (2002) and Melitz (2003) models; extensions of these models with many countries, multiproduct firms, and sectors; methods of quantitative trade analysis to revisit classic questions (gains from trade, distributional effects of trade, trade policy); and new advances in dynamic trade theory.

WTh 1:10pm-2:30pm

**ECON 721b, International Trade II** Konstantinos Arkolakis

The course covers empirical topics in international trade with particular emphasis on current research areas. Topics include tests of international trade theories; studies of the relationship between international trade, labor markets, and income distribution; recent trade liberalization episodes in developing countries; empirical assessment of various trade policies, such as VERs and Anti-Dumping; productivity (and its relation to international trade liberalization); and exchange rates, market integration, and international trade. Methodologically, the course draws heavily on empirical models used in the fields of industrial organization and to a lesser degree labor economics; taking these courses is thus recommended though not required.

HTBA

**ECON 724b, International Finance** Konstantinos Arkolakis

A study of how consumers and firms are affected by the globalization of the world economy. Topics include trade costs, the current account, exchange rate pass-through, international macroeconomic co-movement, multinational production, and gains from globalization. Prerequisite: intermediate macroeconomics or equivalent.

T 6pm-9pm

**ECON 728a and ECON 729b, Workshop: International Trade** Staff

W 2:40pm-4:10pm

**ECON 730a, Economic Development I** Daniel Keniston, Mark Rosenzweig, and A. Mushfiq Mobarak

Development theory at both aggregate and sectoral levels; analysis of growth, employment, poverty, and distribution of income in both closed and open developing economy contexts.

TTh 10:30am-11:50am

**ECON 731b, Economic Development II** A. Mushfiq Mobarak

Analysis of development experiences since World War II. Planning and policy making across countries and time. Models of development, growth, foreign trade, and investment. Trade, capital, and technology flows and increasing interdependence. The political economy of policy making and policy reform.

MW 10:30am-11:50am

**ECON 732b, Advanced Economic Development** Daniel Keniston

Examines the models of classical and modern economists to explain the transition of developing economies into modern economic growth, as well as their relevance to income distribution, poverty alleviation, and human development.

HTBA

**ECON 737b, Economics of Natural Resources** Robert Mendelsohn

Linking of abstract economic concepts to concrete policy and management decisions. Application of theoretical tools of economics to global warming, pollution control, fisheries, forestry, recreation, and mining.

MW 10:30am-11:20am

**ECON 739a and ECON 740b, Climate Change Economics** William Nordhaus and Robert Mendelsohn

The course reviews several modern valuation studies that are central to the estimation of the economic damages from climate change. The aim is to train students to deal with quantitative economic analysis and modeling. Students form teams of two and choose a study; gather the data and methods of that study from the authors or a journal; and then reproduce the published results. The teams study the theory and empirical analysis, gather the data and modeling to replicate the results, and determine how sensitive the results are to the assumptions and specifications. The course meets every other week for the entire year to give students time to analyze their studies and present their results. Prerequisites: econometrics and relevant courses in economics.

Th 1:30pm-3:20pm

**ECON 756a or b, Prospectus Workshop in Development** Staff

Workshop for students doing research in development to present and discuss work.

HTBA

**ECON 790b, Political Economy I** Ebonya Washington

An overview of the field of empirical political economy. While students are expected to familiarize themselves with the most prevalent models in the field, the emphasis in this course is on the applied work. Students attain a working knowledge of the literature, learn to critically evaluate the literature, and most importantly develop the skills to come up with interesting, workable, and theoretically grounded research questions that will push that literature forward.

HTBA

**ECON 794b, International Trade Policy** Giovanni Maggi

Theoretical and empirical research in international trade policy. The course focuses on welfare analysis of trade policies under perfect completion and under oligopoly; the political economy of trade policy; and the economics and political economy of international trade agreements. Prerequisites: ECON 500 and 501.

F 1pm-3:45pm

**ECON 899a or b, Individual Reading and Research** Staff

By arrangement with faculty.

HTBA