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Syllabus:

Economics B100, 30 Credits

Swedish name: Nationalekonomi B100

This syllabus is valid: 2014-07-21 valid to 2015-07-19 (newer version of the syllabus exists)

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, 2014-06-16

Contents

Module 1: Tools and methods for economists (7,5 ECTS)
The main objective of the module is to provide the student with fundamental knowledge in methods for economists, theoretical as well as practical. Ethical aspects in research are included.

Relevant methods for economists include quantitative as well as qualitative methods. The first part of the course focuses on mathematical concepts needed for studies in economics, e.g. functional forms, algebra, optimization, matrix algebra and derivation. The second part of the course focuses on econometrics, especially key concepts, interpretations and practical use. The main model used is the traditional regression analysis (OLS).

Module 2: Industrial Economics (7,5 ECTS)
An updated text will be avaliable in August

Module 3: Monetary and Financial Economics (7,5 ECTS)
The course analyses the role of money in the economy and provides an introduction to financial economics. Different monetary standards are defined followed by a presentation of the classical theory of money and Patinkin’s critique of the classical theory. Keynesian monetary economics, the portfolio theory of money, monetarism and the quantity theory are also treated. This is followed by a treatment of rational expectations which includes a description of the Lucas’ islands model, the policy ineffectiveness result and the Lucas critique. Central banking, the banking system, financial intermediation, the transmission mechanism of monetary policy and the determinants of money supply is covered. This part also covers monetary policy strategies such as inflation targeting and Taylor rules. Credibility and the design of optimal policy structures are treated. The course also covers the econometrics of the demand for money, the transmission mechanism and the control of interest rates and money supply. Exchange rates and inflation control are also treated.

The course also provides an introduction to financial economics. Here the focus is on 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 term structure of interest rates is also dealt with in this part of the course.

Module 4: Environmental and Natural Resource Economics (7,5 ECTS) (Fall semesters)
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 4: Labour Economics (7,5 ECTS) (Spring semesters)
The objective of the module is to increase the students’ knowledge concerning the labour market and how wages and incomes are generated. The module studies, both theoretically and empirically,  the supply and demand of labour, the origins of unemployment and how wage- and income differences arises.  The different theories deal with human capital, discrimination, compensating wage differences and the role of unions. The result of different empirical studies concerning differences in employment, wages  and incomes between different groups and regions will be highlighted. The module will also compare the Swedish labour market with the labour market in other countries.

Wage models are often based on data over individual incomes and it is important the handle selection problems. The econometric part of the course discusses how different selection problems can be treated and the tools available are important parts of microeconometrics.

Expected learning outcomes

Module 1: Tools and methods for economists (7,5 ECTS)
Upon completing this module, students should be able to:
• Apply relevant methods for economists
• Apply mathematical methods such as optimization, matrices and derivations
• Describe the theoretical foundation for the OLS model
• Apply OLS on relevant data, and alsobe able to describe the limitations of the model
• Discuss different ethical aspects connected to research.

Module 2: Industrial Economics (7,5 ECTS)
Updated goals will be avaliable in august.

Module 3: Monetary and Financial Economics (7,5 ECTS)
Upon completing this module, students should be able to:
• Describe and analyse how central banks conduct monetary policy as well as the role of the private banking system in the transmission mechanism;
• Describe how financial markets work and how to use financial data to price financial assets;
• Calculate and interpret key concepts related to bonds such as duration, convexity and different types of yield measures.
• Apply time series analysis on financial data

Module 4: Environmental and Natural Resource Economics (7,5 ECTS) (Fall semesters)
Upon completing this module, students should be able to:
• Apply basic theories within the field of environmental- and resource economics
• Describe and exemplify how environmental policy instruments, such as Pigouvian taxes or quantity regulations, work.
• Explain the problems with non-market priced resourses and be able to analyze theoretical as well as empirical models related to environmental and resource economics.
• Apply empirical models, such as OLS or binary models (Logit and Probit), on relevant data

Module 4: Labour Economics (7,5 ECTS) (Spring semesters)
Upon completing this module, students should be able to:
• Explain and analyze the supply- and demand side of the labour market
• Explain and analyze different explanations for wage and income differences, e.g. discrimination theories and human capital theories.
• Describe the different organizations working on the (Swedish) labour market and the role of these organizations in the wage formation process.
• Identify theories explaining unemployment in the short- and long-run.
• Analyse relevant descriptive statistics and apply econometric methods on relevant data.

Required Knowledge

Economics A100, 30 ECTS or equivalent.

Form of instruction

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

Examination modes

An updated text will be avaliable in August

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

Literature