Economics Department

Professors: Catharine B. Hill, (and President), Geoffrey A. Jehle, Paul A. Johnson, Shirley B. Johnson-Lans (Chair), David A. Kennett, Paul A. Ruud; Associate Professors: Christopher P. Kilby, William E. LuntabAssistant Professors: Sean M. Flynn, Patricia A. Jones, Sarah Pearlman, Robert P. RebeleinabInstructor: Nelson Sá; Adjunct Lecturer: Frederick Van Tassell.

Visiting Assistant Professors: Jeremy J. Jackson, Dilara Tas, Yongjing (Eugene) Zhang. Visiting Instructors: Mona Ali, Shivani Nayyar. CFD Pre-Doctoral Fellow: Christian Awuku-Budu.

ab Absent on leave full year.
b Absent on leave, second semester.

Requirements for Concentration: at least 11 units of graded economics credit normally composed of Economics 100, 101, 200, 201, 209, and 6 other graded units (excluding Economics 120) at least three of which must be at the 300-level. Graded credit is earned only in courses taken for a letter grade. Students may not elect the NRO in any economics course after they have declared their major. Any economic course taken under the NRO before the major was declared may not be counted toward the 11 graded units required for the major although it may be used to satisfy a requirement that a specific course be taken. Credit for Economics 305 cannot be used to satisfy the requirements for the concentration unless Economics 306 is also taken. At least 6 units must be taken at Vassar including 2 at the 300-level. Students also must complete at least 1 unit of college level calculus such as Mathematics 101, 121, or equivalent. Students are strongly encouraged to complete this requirement early in their college careers.

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 Career–A 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.

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. Three options are currently available within the correlate sequence in economics:

International Economics, coordinated by Mr. Johnson.

Public Policy, coordinated by Ms. Johnson-Lans.

Quantitative Economics, coordinated by Mr. Johnson.

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 units in economics, including at least one at the 300-level and Economics 100 and Economics 101. At least four units must be taken at Vassar. Additional requirements for each of the options are detailed in Correlate Sequences in Economics, available in the department office.

I. Introductory

100a and 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 and 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 perfect competition, oligopoly, and monopoly. The course also covers theories of how wages, interest, and profits are determined. Additional topics include the role of government in regulating markets, determinants of income distribution, and the environment. The department.

111b. Economic Crises (1)

This course studies economic crises through the prisms of theory and history. It examines closely the current food and energy crisis in developing countries and the U.S. credit crunch, as well as earlier episodes of prolonged economic contraction and instability, including the Great Depression and the Asian Financial Crisis. The differential impact of economic crises by race, class, and gender is a focus. Ms. Ali.

Fulfills the Freshman Writing Seminar requirement.

120a. Principles of Accounting (1)

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

Not open to Freshmen..

II. Intermediate

Courses numbered 200 and above are not open to Freshmen in their first semester

200a and 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 GDP, 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.

201a and b. Microeconomic Theory (1)

Economics is about choice, and microeconomic theory begins with how consumers and producers make choices. Economic agents interact in markets, so we carefully examine the role markets play in allocating resources. Theories of perfect and imperfect competition are studied, 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: Economics 101.

204a. Gender Issues in Economics. (1)

(Same as Women’s Studies 204) An analysis of gender in education, earnings, employment and the division of labor within the household. Topics include a study of occupational segregation, discrimination, the role of “protective legislation” in the history of labor law, and effects of changes in the labor market of the U.S. We also study the economics of marriage, divorce, and fertility. A comparative study of gender roles in other parts of the world is the final topic in the course. Ms. Johnson-Lans.

Prerequisite: Economics 101.

209a and 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. Mr. Ruud.

Prerequisites: Economics 100 or 101 or permission of instructor.

210a and b. 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. Mr. Johnson.

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

215a. 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. Students learn how to model conflict and cooperation as games, and develop skills in the fine art of solving them. Applications are stressed, and these are drawn from many branches of economics, as well as from a variety of other fields. Mr. Jehle.

Prerequisites: 100 or 101.

218a. Urban Economics (1)

(Same as Urban Studies 218) The focus is on the city, in determining its costs and benefits as well as location and land use. We explore policy issues specific to local governments in urban areas, including: zoning, housing and segregation, poverty, homelessness, transportation, education and crime. The department.

Prerequisite: Economics 101.

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

(Same as Science, Technology, and Society 220) Topics include the markets for physicians and nurses, hospital services, pharmaceuticals, and health insurance, both public and private; effects of changes in medical technology; and global health problems. A comparative study of several other countries’ health care systems and reforms to the U.S. system focuses on problems of financing and providing access to health care in a climate of increasing demand and rising costs. Ms. Johnson-Lans

Prerequisite: Economics 101. Students who have not taken Economics 101 but have strong quantitative backgrounds may enroll with instructor’s permission.

225a and b. Financial Markets and Investments (1)

This course provides an overview of the structure and operation of financial markets, and the instruments traded in those markets. Particular emphasis is placed on portfolio choice, including asset allocation across risky investments and efficient diversification. Theoretical foundations of asset-pricing theories are developed, and empirical tests of these theories are reviewed. The course introduces valuation models for fixed-income securities, equities, and derivative instruments such as futures and options. Throughout the course, students apply investment theories by managing a simulated asset portfolio. Additional topics include financial statement analysis and performance evaluation measures. Ms. Pearlman

Prerequisites: Economics 100 and 101. Students with strong quantitative backgrounds can enroll with instructor permission.

Recommended: Economics 201 and Economics 209.

[230b. The Economics of Innovation] (1)

(Same as Science, Technology and Society 230) This course examines the economics of the innovation process, with particular attention paid to the incentives for innovators. Topics include private appropriation regimes (e.g., patents, trade secrets, copyrights), as well as alternative mechanisms (e.g., public research and development, prizes). Strategic behavior of innovators is examined in the context of patent races, licensing, and litigation. Some time is spent on Big Science, technology transfer, knowledge spillovers, and the knowledge economy. The department.

Prerequisites: Economics 101 and 209.

Not offered in 2008/09.

[233a. The Political Economy of Globalization] (1)

(Same as International Studies 233) We examine the consequences of economic globalization from a variety of theoretical perspectives. Topics include: competing theories of globalization’s effects; an assessment of the extent of globalization; the effects of economic integration on economic growth and the distribution of income; and the ways in which globalization might alter the balance of power between and among workers, communities, governments, and corporations. The course also considers a number of “applied” topics including the North American Free Trade Agreement, the International Monetary Fund and debates over “sweatshop labor.” The department.

Prerequisites: Economics 100 or 101.

Not offered in 2008/09.

238b. Law and Economics (1)

This course uses economics to analyze legal rules and institutions. The primary focus is on the classic areas of common law: property, contracts, and torts. Some time is also spent on criminal law and/or constitutional law (e.g., voting, public choice, and administration). Much attention is paid to developing formal models to analyze conflict and bargaining, and applying those models to specific cases. Topics include the allocation of rights, legal remedies, bargaining and transaction costs, regulation versus liability, uncertainty, and the litigation process. Time permitting, the course may also include discussion of gun control, the death penalty, federalism, and competition among jurisdictions. Mr. Marco.

Prerequisite: Economics 101.

240b. The U.S. Economy (1)

The U.S. economy has dominated the world economy for the last 60 years. With only five percent of the world’s population, it consumes roughly 25 percent of the world’s resources and produces approximately 25 percent of the world’s output. However, the U.S. economy faces substantial challenges in the years to come. Increasing international competition for jobs and resources, an aging population, persistent trade and government budget deficits, and rapid growth in entitlement programs present significant challenges to current and future policy makers. This course examines the seriousness of each of these issues as well as potential solutions for each. Mr. Rebelein.

Prerequisites: Economics 100. Not open to students who have completed Economics 342.

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 WTO, the IMF and World Bank, the European Community and third-world debt. The department.

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

267b. 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. The department

Prerequisite: Economics 101 or permission of instructor. Economics 209 recommended

273b. Development Economics (1)

(Same as Africana Studies 273) A survey of central issues in the field of Development Economics, this course examines current conditions in less developed countries using both macroeconomic and microeconomic analysis. Macroeconomic topics include theories of growth and development, development strategies (including export-led growth in Asia), and problems of structural transformation and transition. Household decision-making under uncertainty serves as the primary model for analyzing microeconomic topics such as the adoption of new technology in peasant agriculture, migration and urban unemployment, fertility, and the impact of development on the environment. Examples and case studies from Africa, Asia, Latin America and transition economies provide the context for these topics. Ms. Jones.

Prerequisites: Economics 100 and 101.

275b. Money and Banking (1)

Money and Banking covers the structure of financial institutions, their role in the provision of money and credit, and the overall importance of these institutions in the economy. The course includes discussion of money, interest rates, financial market structure, bank operations and regulation, and the structure of the banking sector. The course also covers central banks, monetary policy, and international exchange as it relates to monetary policy and the banking sector. The ultimate goal is to provide a deeper understanding of the structure of financial markets, the reasons why it is optimal for these markets to be well- functioning, and the key barriers to this optimal outcome. Ms. Pearlman.

282b. Africa in the World Economy (1)

(same as Africana Studies and International Studies 282b.) This course studies the role of Africa in the global economy. It explores the economic relations of Africa with the rest of the world, including the historical roles of international institutions such as the IMF, World Bank and the UN in the economies of African countries, and discusses the benefitsof these interactions to Africa. Mr. Awuku-Budu.

283b. The Economy of China (1)

(same as Asian Studies 283b.)This course applies tools of economics to a study of the economic transformation of the People's Republic of China with a focus on structural and institutional changes behind China's economic success since 1978. It provides students with a comprehensive introduction to the economy of China as well as an in-depth analysis of current debates on reform and policy. The goal is to help students understand a range of issues facing China's economy, such as industrialization, privatization,labor markets,rural and agricultural reform, banking and financial sector development, regional development,the transformation of state-society relations, the relation with the global economy, and the sustainability of economic growth.

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, but typically include: modern approaches to consumer and producer theory, economics of uncertainty, general equilibrium theory, and welfare analysis. The department.

Prerequisites: Economics 201 and one year of calculus, or permission of instructor.

Not offered in 2008/09.

304b. 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, economic growth, and new-Keynesian models of fluctuations. The requisite dynamic optimization methods are developed during the course. Mr. Johnson.

Prerequisites: Economics 200, 201, 209, and Mathematics 121 or equivalent, or permission of instructor. Economics 210 recommended.

One 3-hour period.

310a. 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. Ruud.

Prerequisites: Economics 210 and one year of calculus. Mathematics 221 -recommended.

320b. Labor Economics (1)

An examination of labor markets. Topics include demand and supply for labor, a critical analysis of human capital and signaling theory, the hedonic theory of wages, theories of labor market discrimination, unemployment, and union behavior. Comparative labor markets in the U.S., the U.K., and other E.U. countries and public policy with respect to such things as minimum wages, fringe benefits, unemployment insurance, and welfare reform are also addressed. Ms. Johnson-Lans.

Prerequisite: Economics 201 and 209.

333b. Behavioral Economics (1)

This course surveys the extensive empirical and experimental evidence documenting how human behavior often deviates from the predictions made by models that assume full rationality. This course combines economics, psychology, and experimental methods to explore impulsivity, impatience, overconfidence, reciprocity, fairness, the enforcement of social norms, the effects of status, addiction, the myopia that people exhibit when having to plan for the future, and other behaviors which deviate from what we would expect if people were fully rational. Mr. Flynn.

Prerequisites: Economics 200 or 201.

342a. Public Finance (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, budget deficits, military spending, environmental policy, health care, education, voting, social security, and the U.S. “safety net.” Mr. Rebelein.

Prerequisites: Economics 201 and one year of calculus.

345a. International Trade Theory and Policy (1)

This 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 impact of trade on the distribution of income; the theory of tariffs and commercial policy; economic integration, trade and trade policy 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. The department.

Prerequisite: Economics 200.

355b. Industrial Organization (1)

This course examines the behavior of firms under conditions of imperfect competition. The role of market power is studied, including the strategies it permits, e.g., monopoly pricing, price discrimination, quality choice, and product proliferation. Strategic behavior among firms is central to many of the topics of the course. As such, game theory is introduced to study strategic behavior, and is applied to topics such as oligopoly pricing, entry and deterrence, product differentiation, advertising, and innovation. Time permitting, the course may also include durable goods pricing, network effects, antitrust economics, and vertical integration. The department.

Prerequisites: Economics 201, Calculus

367b. Comparative Economics (1)

A study of different economic systems and institutions, beginning with a comparison of industrialized market economies in the U.S., Asia, and Europe. Pre-perestroika USSR is studied as an example of a centrally planned economy and the transition to a market economy is examined, with additional focus on the Czech Republic and Poland. Alternatives to both market and planned systems—such as worker self-management, market socialism, and social democracy—are 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.

369a. Political Economy of Development Aid (1)

(Same as Asian Studies 369) Modern foreign aid reached its high point early in its history with the Marshall Plan. Since that time, foreign aid has frequently failed to live-up to expectations. One important reason for this poor record is that donors actually pursue a number of competing objectives including promoting their own geopolitical and commercial objectives. The situation is further complicated by the domestic political economy of aid allocation which can lead to time inconsistent policy, and agency problems in bilateral and multilateral aid bureaucracies. This course examines foreign aid using a variety of economic approaches and tools. We consider both humanitarian and economic rationale for aid. Starting with the history and institutions of foreign aid, we delve into current policy and academic debates including agency problems, conditionality, and selectivity. A recurring theme is how political and economic objectives of aid donors and recipients influence the development effectiveness of aid. Mr. Kilby.

Prerequisites: Economics 201 and 209.

One 3-hour period.

[371b. Alternative Economic Theories and Perspectives] (1)

This course compares and contrasts “alternative” schools of economic thought (Marxist, post-Keynesian, Institutionalist, and others) with “mainstream” economic thought. The course pays particular attention to the implications of theoretical choices. How do the assumptions we make and the questions we choose to ask inform our understanding of capitalism? How do different theoretical perspectives lead to different understandings of real economic phenomena, e.g., market allocation, the distribution of income, unemployment, free trade, neoliberalism, or the appropriate role of government in the economy? The department.

Prerequisites: Economics 201 or 200.

Not offered in 2008/09.

374a. Origins of the Global Economy (1)

(Same as Asian Studies 374) This course examines the long-run evolution of the global economy. For centuries the world has experienced a dramatic rise in international trade, migration, foreign capital flows and technology, culminating in what is today called “the global economy.” How did it happen? Why did it happen to Europe first? In this course, we examine the process of economic development in pre-modern Europe and Asia, the economic determinants of state formation and market integration, the causes and consequences of West European overseas expansion, and the emergence and nature of today’s global economy. Ms. Jones.

Prerequisites: Economics 200 and 209.

385b. Advanced Topics in Financial Economics (1)

This course covers both theoretical and institutional aspects of asset markets and price formation.  Topics include information impounding, market microstructure, the limits to arbitrage, excess volatility, noise-trader risk, Black Swans, and excess serial correlation.  Students use econometrics and perform simulations.  Hedging and risk management are analyzed in the context of unknown or unstable diffusion processes.  The continual reappearance of market crises related to faulty risk management is analyzed. Mr. Flynn.

Prerequisites: Economics 201, 210, and 225.

387b. Topics in Time Series Econometrics (1)

Much of the data of macroeconomics and finance are time series - random sequences indexed by time.  Some of the statistical methods useful in analyzing such data are studied in this course.   Topics include representation, estimation and inference for ARMA models, VAR models, GARCH models, integrated processes, ARIMA models, error-correction models, and spectral models.  Applications to macroeconomics and finance are emphasized throughout. Mr. Johnson.


Economics 200, 210 and one year of calculus.

388a. Global Imbalances, Global Consequences (1)

The world today is marked by persistent trade and financial imbalances.  Advanced economies such as the U.S. and Europe are running large trade deficits while emerging markets such as China and India are producing huge trade surpluses.  In financial terms, there has been a net transfer of capital from developing or capital-scarce countries to advanced or capital-abundant countries.  The persistence of these imbalances has contributed to the re-emergence of a 'core-periphery' analysis, a view that has been missing in international macroeconomics since the collapse of the Bretton Woods monetary regime.  
This course explores the causes and consequences of these global imbalances (financial and trade liberalization, demographic shifts, currency regimes, and export-led growth). We also examine the costs and benefits of these imbalances from the perspective of both the 'core' and the 'periphery'.  Topics discussed include the impact of dollar depreciation on the U.S., Europe, and their developing country trade partners; the macroeconomic consequences of developing countries amassing huge (primarily dollar) international reserves; and policy solutions to these global imbalances. Ms. Ali.

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

389b. Topics in Positive Political Economy (1)

This course studies political phenomena such as elections, voting, party competition, and interest groups through the lens of economics and rational choice theory.  This analysis sheds light on why and how candidates choose their political platforms, and how the individual preferences of the many are translated into collective outcomes. Mr. Jackson.

Prerequisites: Economics 201 and one semester of college calculus.

IV. Senior Courses

300a. Senior Research (1/2)

The department.

301b. Senior Thesis (1)

The department.

V. Other

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

Individual or group field projects or internships. The department.

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

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


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

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