Syllabus:

# Economics B100, 30 Credits

Swedish name: Nationalekonomi B100

This syllabus is valid: 2022-01-03 and until further notice

Course code: 2NE062

Credit points: 30

Education level: First cycle

Main Field of Study and progress level: Economics: First cycle, has less than 60 credits in first-cycle course/s as entry requirements

Grading scale: VG Pass with distinction, G Pass, U Fail

Responsible department: Department of Economics

Revised by: Rector of Umeå School of Business and Economics, 2021-10-07

## Contents

Module 1: Tools and methods for economists, 7.5 ECTS
The main objective of this module is to give the student a fundamental understanding of methods for economists, theoretical as well as practical. Ethical aspects in research are included.

The methods that are presented during the module may be divided into two parts - mathematics and econometrics. During the first part of the module we discuss and apply concepts and methods in mathematics that are useful for theoretical work within economics as well as econometrics. Examples of such notions and methods are functional forms, systems of equations, logarithms, derivatives and optimization. Then, the module transitions into discussing econometrics where the focus is notions, interpretation and practical usage of the classical regression model (OLS). The econometric tools under discussion are also motivated theoretically.

The main focus is on OLS, but other methods are discussed and applied to handle econometric problems related mainly to types of variable and data. Examples are binary dependent variables and time series data. During the model we work with actual data material and presentation of results.

Module 2: Industrial Economics, 7.5 ECTS
The objective of the module is to give the students a good understanding of how firms and markets are organized and how firms and markets interact. The module introduces less simplistic and more realistic models of firms and markets than used on the introductory courses and gives the students theoretical and emprical knowledge regarding the consequences of monopoly, oligopoly, price discrimination, produc differentiation, cooperation, cartels, entry and exit and strategic behaviour.

The starting point for the analysis is the existence of frictions as information asymmetries, transaction costs, menu costs and entry barriers. The module discusses how the firms are organized and how firms compete given these kinds of frictions.

The econometric part of the course is based on the methods from the previous module with relevant application for industrial economics.

Module 3 (Fall): Environmental and Natural Resource Economics, 7.5 ECTS
The aim of the module is to offer an insight in environmental and natural resource economics and a deeper analysis of environmental policy instruments. The concept of natural resources is applied on renewable resources, such as forests, but also on non-renewable resources such as oil and minerals. The resource allocation is analyzed within the framework of perfect competition but also in situations where the markets are characterized by imperfect competition and negative externalities. The theoretical models are applied on different kind of environmental issues. Central questions are: How much shall we spend on improving the environment? How efficient are different policy instruments?

The module also introduces various econometric methods, as binary models,  to determine the value of non-market priced resources, e.g. rare species. Other models to determine the effect of different environmental policies are also introduced.

Module 3 (Spring): Public Economics, 7.5 ECTS
The module is only avaliable in Swedish.

Module 4 (Fall): (Fall): Monetary and Financial Economics, 7.5 ECTS
The course analyses the role of money in the economy and provides an introduction to financial economics. The first part of the course describes and analyses the role of the central bank and the importance of banks for the transmission mechanism. The next part of the course deals with interest bearing instruments. Different debt instruments are defined and explained as well as the basic concepts of how to value financial assets. Particular emphasis will be put on bonds. The final part of the course introduces modern portfolio theory, including Markowitz model and CAPM. The econometric part of the course focus on time series analysis of financial data.

Module 4 (Spring): Labour Economics, 7.5 ECTS
The module is only avaliable in Swedish.

## Expected learning outcomes

Module 1: Tools and methods for economists, 7.5ECTS
Upon completing this module, students should be able to:
1. Apply methods relevant for economists.
2. Apply different functional forms, differentiate and optimize functions.
3. Describe and explain the theoretical foundation for the classical regression model estimated by the method of ordinary least squares (OLS).
4. Evaluate and understand limitations of the classical regression model (OLS).
5. Using OLS as a starting point, discuss and apply methods for handling econometric problems and different types of variables and data.
6. Apply relevant methods on different types of data, and show awareness for issues related to research ethics.
7. Communicate conclusions drawn from scientific studies to different types audiences in a clear and pedagogic way.

Module 2: Industrial Economics, 7.5ECTS
Upon completing this module, students should be able to:
1. Explain central concepts within the subject as price elasticity, firms cost structure, measures of market power and market concentration ect.
2. Derive and explain the a representative firm's profit maximization decision in the short-run as well as the long-run given different market structures, and explain to the welfare consequences of the profit maximization.
3. Explain how different market structures can arise and how welfare may differ depending on the market structure, including vertical and horizontal integration and cartels.
4. Explain product differentiation, price discrimination, strategic behaviour and the how these aspects affects welfare.
5. Derive and understand the economical implication of the first- and second order conditions for profit maximization.
6. Apply econometric methods, as regression analysis, to answer empirical questions on data relevant for industrial economics.

Module 3: Environmental and Natural Resource Economics, 7.5ECTS
Upon completing this module, students should be able to:
1. Apply basic theories within the field of environmental- and resource economics.
2. Describe and exemplify how environmental policy instruments, as Pigouvian taxes or quantity regulations, work and discuss pros- and cons with different policy instrument.
3. Explain the problems with non-market priced resourses and be able to analyze theoretical as well as empirical models.
4. Apply basic empirical models on relavant data with the area of environmental policy.

Module 3 (Spring): Public Economics, 7.5ECTS
The module is only avaliable in Swedish.

Module 4 (Fall): Monetary and Financial Economics, 7.5ECTS
Upon completing this module, students should be able to:
1. Describe and analyse how central banks conduct monetary policy as well as the role of the private banking system in the transmission mechanism.
2. Describe how financial markets work and how to use financial data to price financial assets.
3. Calculate and interpret key concepts related to bonds such as duration, convexity and different types of yield measures.
4. Apply time series analysis on financial data.

Module 4 (Spring): Labour Economics, 7.5ECTS
The module is only avaliable in Swedish.

## Required Knowledge

Economics A100, 30 ECTS and Mathematics 3b/3c or equivalent.

## Form of instruction

The education is given in form of lectures, group sessions, video lectures and seminars.

## Examination modes

The examination consists of mid-module exams, written examination at the end of modules, assignments and seminars.

The results from mid-module exams, assignments and seminars are only valid during the current semester. Students not having a Pass on assignments or seminars will be given an additional corresponding examination opportunity, within the scope of the given module.

A second exam opportunity is always offered within a short time span after the regular exam date for those students not achieving a Pass, except Module 4 during spring semesters. The subsequent exam opportunity is either the re-take opportunity the week before the fall semester or the next regular exam date.

The following grading system will be used: Pass with Distinction (Väl Godkänd), Pass (Godkänd) or Fail (Underkänd). A grades on the course is awarded when the student has passed all examinations and compulsory course elements on all four modules. The grade Pass with Distinction on the course requires the grade Pass with Distinction on at least three out of four modules.

It is normally not possible to do additional examinations to reach a higher grade. Exceptions can be made for a student with the grade Fail on any of the examinations if the examiner (not the lecturer) finds this appropriate. The task must be a minor undertaking, closely related to the learning outcome not reached, and performed in close proximity to the original examination.

When a student has failed an examination on two occasions, he or she has a right to have another grading teacher. A written request for an alternative examiner should be handed to the Dean of the Business School no later than two weeks before the next examination opportunity.

Credit transfer
Academic credit transfers are according to the University credit transfer regulations.

## Literature

### Module 1

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Mandatory
Search Album, the University Library catalogue

Essential mathematics for economic analysis
Sydsæter Knut., Hammond Peter J., Strøm Arne.
4th ed. : Harlow : Pearson : 2012. : xviii, 745 p. :
ISBN: 978-0-273-76068-9 (pbk.) :
Search Album, the University Library catalogue

### Module 2

Industrial organization : contemporary theory and empirical applications
Pepall Lynne, Richards Daniel Jay, Norman George
5. ed. : Hoboken, NJ : Wiley : cop. 2014 : ix, 709 s. :
ISBN: 9781118250303
Mandatory
Search Album, the University Library catalogue

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Search Album, the University Library catalogue

### Module 3: Public Economics (Spring)

Public finance
Rosen Harvey S., Gayer Ted, Civan Abdülkadir
10. ed., global ed. : New York, NY : McGraw-Hill : 2014 : xxii, 588 s. :
ISBN: 007715469X
Mandatory
Search Album, the University Library catalogue

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Search Album, the University Library catalogue

### Module 4: Labour Economics (Spring)

Björklund Anders, Edin Per-Anders, Fredriksson Peter, Holmlund Bertil, Wadensjö Eskil
4. uppl. : Lund : Studentlitteratur : 2014 : 413 s. :
ISBN: 9789144092379
Mandatory
Search Album, the University Library catalogue

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Search Album, the University Library catalogue

### Module 3: Environmental and Natural Resource Economics (Fall)

Hussen Ahmed M.
Principles of environmental economics and sustainability : an integrated economic and ecological approach
3. ed. : London : Routledge : 2013 : 417 s. :
ISBN: 9780415676915
Mandatory
Search Album, the University Library catalogue

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Search Album, the University Library catalogue

### Module 4: Monetary and Financial Economics (Fall)

Money, banking, and financial markets
Cecchetti Stephen G., Schoenholtz Kermit L., Stern Leonard N.
4. ed. : New York : McGraw-Hill Education : [2015] : xliv, 674 pages, 34 variously numbered pages :
ISBN: 9789814575164 (Global ed.)
Mandatory
Search Album, the University Library catalogue

A practical guide to using econometrics
Studenmund A. H., Johnson Bruce K.
7. [rev.] ed. ; Global ed. : Harlow : Pearson : [2017] : 572 s. :
ISBN: 9781292154091
Search Album, the University Library catalogue