Economics

Professors: Geoffrey A. Jehle, David A. Kennett (Chair), Alexander M. Thompson III (Dean of Studies); Associate Professors: Lawrence A. Herbstab, Shirley B. Johnson-Lans, Paul A. Johnsonab, William E. Lunt; Assistant Professors: Fred A. Bellemore, Christopher P. Kilby, John Z. Smith; Visiting Assistant Professor: Robert E. Prasch III; Adjunct Lecturer: Frederick Van Tassell III.

ab Absent on leave for the year.

Requirements for Concentration: at least 11 units of graded economics credit normally composed of 100, 101, 200, 201, 209, and 6 other graded units (excluding Economics 120) at least three of which must be at the 300 level and must include either 301 or 305a-306b. Credit for 305 cannot be used to satisfy the requirements for the concentration unless 306 is also taken. At least 6 units must be taken at Vassar including 2 at the 300 level. Students must also complete at least 1 unit of college level calculus such as Mathematics 115, 140, or equivalent. Students are strongly encouraged to complete this requirement early in their college careers. All exceptions to the normal program require special permission from the department chair.

Requirements for Departmental Honors: To be eligible for departmental honors, students must take the Senior Seminar in Economics 305a-306b, and must perform work of a high standard in the seminar and in their other courses.

It is strongly recommended that all students intending to spend junior year abroad take Economics 200, 201, and 209 by the end of their sophomore year.

Economics and Your Career­A Guide to Designing Programs of Study in 
Economics at Vassar
 recommends sequences of study for students planning to work right after graduation, and for those planning to attend graduate or professional schools. It is available in the department office.

Senior-Year Requirement: Economics 301 or Economics 305a-306b.

Advisers: The department.

Correlate Sequence: The economics department offers a correlate sequence which designates coherent groups of courses intended to complement the curricula of students majoring in other departmental, interdepartmental, and multidisciplinary programs. Four options are currently available within the correlate sequence in economics:

International Economics, coordinated by Mr. Kennett.

Political Economy, coordinated by Mr. Prasch.

Public Policy, coordinated by Ms. Johnson-Lans

Quantitative Economics, coordinated by Mr. Lunt.

Courses within each option should be chosen in consultation with the coordinator of that sequence. Students pursuing the correlate sequence in economics are required to complete a minimum of six courses in the department, including at least one at the 300 level and at least two from the following three courses: Economics 100, Economics 101, Economics 102. Additional requirements for each of the options are detailed inCorrelate Sequences in Economics, available in the department office.


I. Introductory

100a or b. Introduction to Macroeconomics (1)

An introduction to economic concepts, emphasizing the broad outlines of national and international economic problems. Students learn the causes and consequences of variations in gross national product, unemployment, interest rates, inflation, the budget deficit, and the trade deficit. The course also covers key government policy-making institutions, such as the Federal Reserve and the Congress, and the controversy surrounding the proper role of government in stabilizing the economy. The department.

101a or b. Introduction to Microeconomics (1)

An introduction to economic concepts emphasizing the behavior of firms, households, and the government. Students learn how to recognize and analyze the different market structures of pure competition, imperfect competition, oligopoly, and monopoly. The course also covers theories of how wages, rent, interest, and profits are determined. Special attention is given to controversies over the proper role of government in regulating markets, issues of poverty and economic inequality, and environmental degradation. The department.

102b. Introduction to Marxian Economics (1)

The course is an analytical and critical introduction to Marx's analysis of capitalism. Readings include selections from the works of Marx and Engels and from the works of contemporary Marxian writers and critics of Marx. There is a special emphasis on Volume I of Capital. Topics include: the labor theory of value; commodity fetishism; alienation; the production of surplus value; Marx's theory of money; Marx's theory of capital accumulation. The relevance of Marx's analysis to contemporary capitalism is explored. Mr. Thompson.

Open to all classes.

103a. Markets and Politics (1)

What role should the state play in today's market economy? Serious efforts to answer this important and timeless question immediately encounter some of the most fiercely debated controversies in economics: is a market system "progressive"? Can it be self-coordinating? Does a market system generate internal forces which lead to its inevitable demise? Can the state correct problems markets create, or is the state, itself, the problem? To explore these issues we examine original texts by some of the most important thinkers ever to have addressed them. Readings include works by Adam Smith, Karl Marx, John Commons, Joseph Schumpeter, John Maynard Keynes, and Friedrich von Hayek. Mr. Prasch.

Open to freshmen only.

120b. Principles of Accounting (1)

Accounting theory and practice, including preparation and interpretation of financial statements. Mr. Van Tassell.

Open to all classes.

II. Intermediate


200a or b. Macroeconomic Theory (1)

A structured analysis of the behavior of the national and international economies. Alternative theories explaining the determination of the levels of GNP, unemployment, the interest rate, the rate of inflation, exchange rates, and trade and budget deficits are considered. These theories provide the basis for discussion of current economic policy controversies. The department.

Prerequisites: Economics 100 and 101.

201a or b. Microeconomic Theory (1)

Economics is about choice, and microeconomic theory begins with how consumers and producers make choices. Since economic agents interact in markets, we carefully examine the role markets play in allocating resources. Theories of perfect and imperfect competition are presented, emphasizing the relationship between market structure and market performance. General equilibrium analysis is introduced, and efficiency and optimality of the economic system are examined. Causes and consequences of market failure are also considered. The department.

Prerequisites: Economics100, 101 or permission of instructor.

202b. Topics in Political Economy (1)

In this course economics is presented in its full context as competing visions of the "Good Society" including classical liberalism, modern liberalism, market socialism, and communism. Lectures and readings are based on a close examination of classic arguments and texts. Mr. Prasch.

Prerequisite: One economics course.

[204a. The Economics of Gender] (1)

An analysis of gender differences in income, earnings, and employment and of gender as a determinant of the division of labor within the family in the United States and elsewhere. Topics include occupational segregation, discrimination, and the role of "protective legislation"; the economics of marriage, divorce, and property rights; and the economic controversies over sex in the marketplace, specifically in the cases of prostitution, pornography, and surrogate motherhood. Ms. Johnson-Lans.

Prerequisite: Economics 101.

Not offered in 1999/00.

209a or b. Probability and Statistics (1)

This course is an introduction to statistical analysis and its application in economics. The objective is to provide a solid, practical, and intuitive understanding of statistical analysis with emphasis on estimation, hypothesis testing, and linear regression. Additional topics include descriptive statistics, probability theory, random variables, sampling theory, statistical distributions, and an introduction to violations of the classical assumptions underlying the least-squares model. Students are introduced to the use of computers in statistical analysis. No prior experience with computers is assumed. The department.

Prerequisites: Economics 100, 101 or permission of instructor.

210a. Econometrics (1)

This course equips students with the skills required for empirical economic research in industry, government, and academia. Topics covered include simple and multiple regression, maximum likelihood estimation, multicollinearity, heteroskedasticity, autocorrelation, distributed lags, simultaneous equations, instrumental variables, and time series analysis. Extensive use is made of the computer, although no prior experience with computers is assumed. The department.

Prerequisites: Economics 209 or an equivalent statistics course. Recommended: Economics 100, 101.

212a. Sports Economics (1)

Professional sports in the United States are multibillion dollar businesses. This course explores the economic aspects of professional sports teams and leagues from their inception to the present. The economic content of legal issues such as antitrust, free agency, and franchise mobility are explored. Particular attention is placed on the development of rival leagues and the dynamics of player salaries over time. Additional topics include: revenue sharing and salary caps, public financing of stadia, collective bargaining and players' unions, and racial discrimination in professional sports. Mr. Smith.

Prerequisite: Economics 101.

215b. The Science of Strategy (1)

Strategic behavior occurs in war, in business, in our personal lives, and even in nature. Game theory is the study of strategy, offering rigorous methods to analyze and predict behavior in strategic situations. This course introduces students to game theory and its application in a wide range of situations. The course begins by examining when and how people contend and cooperate. The students learn how to model conflict as an abstract game, and develop skills in the fine art of solving games. The course stresses applications, and these are drawn from the fields of political science and mathematics, as well as from many branches of economics. Instructor to be announced.

Prerequisites: Economics 100 or 101.

220a. The Political Economy of Health Care (1)

Economic models are applied to the contemporary problems of financing and providing health care in a climate of increasing demand and rising costs. Topics include the role of health care insurance, both public and private; and the effects of changes in medical technology; the age distribution of the population; and market structure in the health care industry. A comparative study of several other countries' health care systems are included. Ms. Johnson-Lans.

Prerequisite: Economics 101 or permission of instructor.

225b. Financial Markets, Banking, and Monetary Policy (1)

The operation, performance, and efficiency of financial markets and institutions are explored in this course. Further, the role of government intervention in financial marketsthrough both regulation and monetary policyis considered. The course is organized into four sections: the financial system; financial markets and institutions; the implementation of monetary policy; and linkages between financial markets and goods markets in macroeconomic analysis. In studying the financial system, interest rate determination, financial instruments, portfolio choice, and market efficiency are discussed. Next, financial intermediation, commercial bank operation, and the role of information within financial markets are considered. Operation of the Federal Reserve system is reviewed in the section on monetary policy implementation, and the course concludes with an investigation of the role of financial instruments and institutions in influencing economic activity. Topics vary based on current developments, but include: the role of monetary policy in the Great Depression; consequences of government regulation and deregulation of financial intermediaries; case-study analyses of the S&L crisis and the Resolution Trust Corporation; and the impact of financial innovations such as junk bonds and derivatives. Mr. Smith.

Prerequisite: Economics 100. The requisite mathematical and statistical concepts are developed within the course.

238b. Law and Economics (1)

Economic analysis of legal rules and institutions. Topics are selected from among the following: environmental law, property rights, antitrust policy, mergers and acquisitions, regulation, administrative law, discrimination, malpractice, liability, and criminal law. There are references to the common law of property, torts, and contracts. The department.

Prerequisite: 101

245b. Public Economics (1)

This course considers the effects that government expenditure, taxation, and regulation have on people and the economy. Attention is given to how government policy can correct the many failures of the free market system. Topics include the effect taxes have on consumption and employment decisions, the U.S. income tax system, income redistribution, regulation of monopolies, budget deficits, military spending, environmental policy, health care, education, voting, housing policy, social security, and the U.S. "safety net." Mr. Bellemore.

Prerequisites: Economics 101.

248a. International Trade and the World Financial System (1)

A policy-oriented introduction to the theory of international trade and finance. The course introduces basic models of trade adjustment, exchange rate determination and macroeconomics adjustment, assuming a background of introductory economics. These are applied to the principle issues and problems of the international economy. Topics include the changing pattern of trade, fixed and floating exchange rates, protectionism, foreign investment, the Euro-dollar market, the role of the GATT, the IMF and World Bank, the European Community, the debt crisis, the North-South debate, and foreign aid. Mr. Kennett.

Prerequisites: Economics 100 and 101. Not open to students who have completed Economics 345 or 346.

260b. The Economics of Imperialism (1)

A study in economic history and economic thought related to the rise of European imperialism and its aftermath. Attention is given to the impact on both the colonized nation and the colonizer, and to the relationship between economic thought and policy. Topics covered include the Spanish and Portuguese empires, systematic colonization, the late Victorian division of Africa, U.S. expansionism, and Japanese imperialism. Marxian and competing models are examined in historical context. The course concludes with a discussion of the postwar decolonization and the changing nature of twentieth-century dependency. Mr. Kennett.

Prerequisites: Economics 100 and 101 or 102.

267a. Environmental and Natural Resource Economics (1)

(Same as Science, Technology, and Society 267) This course examines environmental and natural resource issues from an economic perspective. Environmental problems and controversies are introduced and detailed, and then various possible policies and solutions to the problems are analyzed. Economic analyses will determine the effectiveness of potential policies and also determine the people and entities which benefit from (and are hurt by) these policies. The goal is for students to develop a framework for understanding environmental problems and then to learn how to analyze policy actions within that framework. Topics include water pollution, air pollution, species protection, externalities, the energy situation, and natural resource extraction. Mr. Bellemore.

Prerequisite: Economics 101 or permission of instructor.

268a. Economic Development in Less Developed Countries (1)

Analysis of the central issues in economic development including growth, structural transformation, inequality, and the standard of living. The course begins with a survey of current conditions (per-capita income, productivity, inequality, poverty, health, and education) in less developed countries. The history of development theory from the 1940s to the present and the evolution of development theory from "big push" to "export-led growth" are reviewed with examples from the three focus countries. This sets the stage for exploring current topics including household decision-making in agriculture, migration, fertility, and the role of the state, politics, and international aid. Mr. Kilby.

Prerequisites: Economics 100 and 101.

269b. Political Economy of Development Aid (1)

The course examines political and economic aspects of international development assistance. From its origins in the Marshall Plan at the end of World War II, development aid has undergone a series of transformations in terms of philosophical orientation, economic justification, and practical implementation. The course explores this evolution, presenting a range of topics: the history of aid; the economic and political impact of aid; multilateral, bilateral and nongovernmental aid institutions; project aid and project appraisal; structural adjustment lending and the debt crisis; political and economic motives of aid donors and recipients; and technological bias in development projects. Mr. Kilby.

Prerequisites: Economics 100 or 101.

III. Advanced Courses


303b. Advanced Topics in Microeconomics (1)

This course introduces students to modern theoretical methods in microeconomics and their application to advanced topics not typically addressed in Economics 201. Topics vary from year to year at the discretion of the instructor, but typically include: modern approaches to consumer and producer theory, economics of uncertainty, general equilibrium theory, and welfare analysis. Mr. Jehle.

Prerequisites: Economics 201 and Mathematics 140, or equivalent, or permission of instructor.

[304a. Advanced Topics in Macroeconomics] (1)

This course examines some recent theoretical and applied work in macroeconomics. Topics vary from year to year but are likely to include consumption, investment, and new-Keynesian models of fluctuations. Economic growth is also studied, with an emphasis on the relationships between income distribution and growth. The requisite dynamic optimization methods are developed during the course. Mr Johnson.

Prerequisites: Economics 200, 201, 209, and Mathematics 140 or equivalent, or permission of instructor. Economics 210 recommended.

Not offered in 1999/00.

310b. Advanced Topics in Econometrics (1)

Analysis of the classical linear regression model and the consequences of violating its basic assumptions. Topics include maximum likelihood estimation, asymptotic properties of estimators, simultaneous equations, instrumental variables, limited dependent variables and an introduction to time series models. Applications to economic problems are emphasized throughout the course. Mr. Lunt.

Prerequisites: Economics 210 and one year of calculus. Mathematics 224 recommended.

320b. Labor Economics (1)

An examination of the theory and operation of labor markets. Topics include demand and supply for labor, a critical analysis of human capital theory and signaling theory, the determinants of occupational, wage, and employment level differences both cross-sectionally and over time, unions, theories of labor market discrimination and segregation, and public policy issues including welfare reform and the effects of minimum wages. Ms. Johnson-Lans.

Prerequisites: Economics 101 and 209. Economics 201 strongly recommended.

345a. International Trade Theory and Policy (1)

The course examines classical, neoclassical, and modern theories of international trade, as well as related empirical evidence. Topics included are: the relationship between economic growth and international trade; the theory and practice of commercial policy; the theory of customs unions; international factor movements; trade between unequal partners; trade under imperfect competition. Mr. Jehle.

Prerequisite: Economics 201.

346b. International Monetary Theory and Policy (1)

The course is devoted to the problems of balance of payments and adjustment mechanisms. Topics include: the balance of payments and the foreign ex-change market; causes of disturbances and processes of adjustment in the balance of payments and the foreign exchange market under fixed and flexible exchange rate regimes; issues in maintaining internal and external balance; optimum currency areas; the history of the international monetary system and recent attempts at reform; capital movements and the international capital market, particularly the Eurodollar market. Mr. Johnson.

Prerequisite: Economics 200.

355a. Industrial Organization (1)

This course examines the external behavior of firms under conditions of imperfect competition. Asymmetry and heterogeneity among firms are explicitly recognized. Inefficient, strategic, and illegal behavior of firms is discussed. Game theory is introduced and applied to study entry, pricing, output, capacity, and quality choices that firms must make. The role of information in firm and market performance is also studied, with particular attention to its implications for advertising and research and development. Finally, the role of the government in the supply of information, in regulation, and in antitrust enforcement is evaluated. Instructor to be announced.

Prerequisites: Economics 201.

356b. Topics in Industrial Organization (1)

This course extends the analysis begun in Economics 355 by examining issues in much greater detail. Where the emphasis of 355 is on surveying the field of Industrial Organization and learning the basic models of firm behavior, the emphasis of 356 is on applying the understanding from those models to real world situations through detailed case studies. Instructor to be announced.

Prerequisites: Economics 355 or permission of instructor. Economics 209 and 210 will be useful for some case studies and are recommended.

367b. Comparative Economics (1)

A study of different economic systems, institutions, and processes. We begin with a comparison of industrialized market economies, and focus on the role of corporations in the U.S., industrial policy in Japan, and the process of privatization in the U.K. A brief overview of the Marxist critique of capitalism follows, along with a discussion of the centralized planned economy. Pre-perestroika USSR is used for a case study. The transition from a centralized planned economy to a market economy is closely studied, with a special focus on Poland and Hungary. Alternatives to both market and planned systemssuch as worker self-management, market socialism, and social democracyare also explored with emphasis on the experience of Yugoslavia and Sweden. Mr. Kennett.

Prerequisites: at least 2 units of Economics at or above the 200-level.

370a. History of Economic Thought (1)

A systematic study of the development of economic thought from early times to the present; emphasis is placed on the study of European and American economists of the eighteenth, nineteenth, and twentieth centuries; the political, social, and cultural context of the development of economic thought is highlighted. The department.

Prerequisites: Economics 100, 101, and 2 units of 200-level work in Economics.

One 2-hour period.

371a. Alternative Economic Theories and Perspectives (1)

This course develops the theoretical foundations of alternative schools of economic thought (e.g. Marxist, post-Keynesian, Institutionalist, & Austrian) and applies them to theoretical and policy issues. From these theoretical perspectives the course then reexamines "structural adjustment" policies in the Third World, free trade, consumer theory, the principles of economic growth, the operation of theory of financial markets, and the contemporary resurgence of "neoliberal" economic policies both here and abroad. Mr. Prasch.

Prerequisites: Economics 201 or 200.


IV. Senior Courses

301a or b. Senior Exercise in Economics (1/2)

Students enrolled in this course undertake the structured analysis of an article-length work from the economics literature under the supervision of a department member. This opportunity for substantive culminating work in economics is intended to deepen the student's understanding of their discipline and encourages the student to draw together elements of four years' education in economics. The department.

Prerequisites: Economics 200, 201, 209.

305a.-306b. Senior Seminar in Economics (1)

Students must write an independent research paper on a topic to be agreed upon with the seminar instructor. These topics should be discussed with the instructor prior to registration. For any credit for the major, students must complete both 305a and 306b. The department.

One 2-hour period.


V. Other

290a or b. Field Work (1/2 or 1)

Individual or group field projects or internships. One-half unit for 60 hours of work. The department.

May be elected during the college year or during the summer.

Prerequisite or corequisite: a course in the department. Permission required.

Unscheduled.

298a or b. Independent Work (1/2 or 1)

399a or b. Senior Independent Work (1/2 or 1)