Economics

28 Hillhouse, 432.3575
M.A., M.Phil., Ph.D.

Chair
David Pearce (28 Hillhouse, 432.3571)

Director of Graduate Studies
Donald Brown (30 Hillhouse, Rm 36, 432.6934, donald.brown@yale.edu)

Professors
Joseph Altonji, Donald Andrews, Dirk Bergemann, Steven Berry, Truman Bewley, William Brainard, Donald Brown, Eduardo Engel, Robert Evenson, Ray Fair, John Geanakoplos, Pinelopi Goldberg, Timothy Guinnane, Koichi Hamada, Gerald Jaynes, Michael Keane, Alvin Klevorick, Richard Levin, Robert Mendelsohn, Stephen Morris, Barry Nalebuff, William Nordhaus, David Pearce, Peter Phillips, Benjamin Polak, Gustav Ranis, John Roemer, Herbert Scarf, T. Paul Schultz, Robert Shiller, Martin Shubik, T. N. Srinivasan, Christopher Udry

Associate Professors
Philip Levy, Martin Pesendorfer

Assistant Professors
Patrick Bayer, Hanming Fang, Donato Gerardi, Galina Hale, George Hall, Ann Huff-Stevens, Stefan Krieger, Carolyn Moehling, Giuseppe Moscarini, Christopher Timmins

Fields of Study
Fields include economic theory, including microeconomics, macroeconomics, mathematical economics; econometrics; economic history; labor economics; market organization; money and banking; financial economics; economics of the public sector; international trade and finance; economic development; demography; history of economic thought; comparative economic systems.

Special Admissions Requirements
The GRE General Test is required of all applicants to the program. Students whose native language is not English must take the Test of English as a Foreign Language (TOEFL).

Special Requirements for the Ph.D. Degree
The following requirements must be satisfied in addition to those prescribed by the Graduate School.

1. Prior to Registration for the Second Year. (a) Students must have taken for credit and passed at least six economics graduate courses. (b) Students must pass written comprehensive examinations in micro- and macroeconomics. These examinations, which are given in May and late August of each year, must be taken in the spring term of the first year. Each exam will be graded separately, and in the event of failure, students will retake only the part of the exam they did not pass. Students may take the comprehensive examination no more than two times.

2. Prior to Registration for the Third Year. (a) Students must have met the two Honors requirement specified by the Graduate School. (b) Students must have taken at least fourteen term courses in Economics and have received a grade of at least Pass– in each of them. With the permission of the director of graduate studies, courses in related fields and independent reading courses can be used to fulfill this requirement. Workshops may not be used to satisfy it. (c) Students must have received an average of at least High Pass in the courses they have taken. The admissibility of courses for this requirement is the same as for the fourteen-course requirement mentioned above.

3. Admission to Candidacy. The Graduate School requires 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 department faculty after having completed department requirements (1) and (2) above, the Graduate School's prospectus requirement, and the following additional requirements: (a) Students must have completed two one-term prospectus workshops. Prospectus workshops have the word "prospectus" in their title. (There are other workshops.) If students can find no workshop corresponding to their interests, they may substitute other workshops for this requirement. If students can find no workshop whatsoever in their areas of interest, they may substitute independent study guided by a faculty member, provided the independent study leads to a dissertation prospectus that is accepted. (b) Students must receive a grade of High Pass– or better in ECON-551b (Econometrics II) or 552b (Econometrics III). More advanced courses may be substituted for these with special permission of the director of graduate studies. (c) Students must receive a grade of Satisfactory on an applied econometrics paper, which is evaluated by the faculty adviser of the paper and another faculty member. In the paper, the student should (i) specify an economic model useful for the investigation of an interesting economic problem, (ii) select data and econometric methods appropriate to the question, (iii) conduct proper statistical analysis, and (iv) interpret the results in an intelligent way. (d) Students must complete with a grade of at least High Pass– a term of economic history, drawn from a list of courses approved by the director of graduate studies and economic history instructors. (e) Students must pass an oral examination.

4. Submitting the Dissertation. A student's dissertation research is guided by a committee of two Graduate School faculty members, at least one of whom must be a member of the Economics department. One of the committee members is designated as chair. When a first draft of the dissertation is completed, the director of graduate studies appoints, on request of the committee chair, a third reader.

Programs in Law and Economics
The Economics department participates in the J.D./M.A. and J.D./Ph.D. programs.

Master's Degrees
M.Phil. The M.Phil. degree is awarded to students in the Ph.D. program upon completion of fourteen term courses, with at least two grades of Honors. In addition, students must satisfy the qualifying requirements in economic theory, econometrics, economic history, and two special fields, as well as the oral examination.

M.A. (en route to the Ph.D.). The M.A. degree is awarded upon completion of eight term courses with an average grade of High Pass, and satisfactory completion of one of the following: the comprehensive examination in economic theory, the course requirement in econometrics, or the course requirement in economic history.

The M.A. in International and Development Economics is described elsewhere in this bulletin.

Program materials are available upon request to the Director of Graduate Studies, Economics Department, Yale University, PO Box 208268, New Haven CT 06520-8268. See our Web site: www.econ.yale.edu/

Courses
ECON 500a, General Economic Theory: Microeconomics. Dirk Bergemann, Benjamin Polak.
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.

ECON 501b, General Economic Theory: Microeconomics. Stephen Morris.
General equilibrium and welfare economics. Allocation involving time. Public sector economics. Uncertainty and the economics of information. Introduction to social choice.

ECON 510a, General Economic Theory: Macroeconomics. Robert Shiller, Eduardo Engel.
Analysis of short-run determination of aggregate employment, income, prices, and interest rates in closed and open economies. Stabilization policies.

ECON 511b, General Economic Theory: Macroeconomics. George Hall, Stefan Krieger.
Theories of saving, investment, portfolio choice, and financial markets. Longer-run developments; economic growth, capital accumulation, income distribution.

ECON 520a, Advanced Microeconomic Theory I. Dirk Bergemann, Donato Gerardi.
A formal introduction to game theory and information economics. Alternative noncooperative solution concepts are studied and applied to problems in oligopoly, bargaining, auctions, strategic social choice, and repeated games.

ECON 521b, Advanced Microeconomic Theory II. Attila Ambrus, Itzak Gilboa.
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.

ECON 522a and 523b, Topics in Game Theory. Stephen Morris.
A forum for advanced students to examine critically recent papers in the literature and present their own work.

ECON 524a, Behavioral Applied Theory. Dilip Abreu.
This course discusses models of bounded rationality that respond to some of the behavioral regularities established by experimenters in economics and psychology. The phenomena considered include reciprocity, overconfidence, time inconsistency and imperfect sophistication of various kinds, with applications drawn from consumer theory, financial economics, industrial organization, and bargaining.

ECON 525a, Advanced Macroeconomics: I. Eduardo Engel, Robert Shiller.
Aggregation, inventory models, externalities, spillovers, information and adjustment. Time series models, expectations, models of financial markets, risk management, monetary policy, term structure of interest rates.

ECON 526b, Advanced Macroeconomics: II. William Brainard, Stefan Krieger.
Selected empirical topics.

ECON 530a, Equilibrium Analysis on Finite Data Sets. Donald Brown. MW 1–2.15
This course investigates the central issues in the theory of competitive markets, i.e., existence, uniqueness, and tatonment stability of market clearing prices. We consider both the Walrasian and Marshallian theory of general economic equilibrium. The analysis differs from the traditional approach to these topics in that we restrict attention to propositions derivable from finite data sets. These properties include counterfactuals, i.e., global comparative statics of market economics. Also MATH 530a.

ECON 531b, Mathematical Economics: II. John Geanakoplos.
Primary focus on general equilibrium analysis. Topics include consumer preference theory, demand functions, fixed-point theorems and their application to demonstrating the existence of competitive equilibria, the computation of equilibrium prices, Pareto optimality, the core of an economy, and related topics in n-person game theory.

[ECON 532a^u, General Equilibrium under Uncertainty.]

[ECON 533a and b, Workshop on Discrete Mathematics and Applications.]

ECON 537a and 538b, Microeconomic Theory Workshop. Staff.
Presentations by research scholars and participating students.

ECON 540a and 541b, Workshop in International and Macroeconomics. Staff.
A course for third- and fourth-year students doing research in macroeconomics 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, Pt least one of the presentations in the first term should be a mock job talk.

ECON 542a and 543b, Macroeconomics Workshop. Staff.
A forum for presentation and discussion of state-of-the-art research in macroeconomics. Presentations by research scholars and participating students of papers in closed economy and open economy macroeconomics and monetary economics.

ECON 544a, Economic Analysis. Cheryl Doss. MW 9–10.15
An introduction for International Relations students to more advanced concepts of micro- and macroeconomic analysis in an applied context. Different economies in different stages of development are used as illustrations of these concepts. Areas covered include employment, income, and interest rate determination as well as theories of consumption, investment, pricing, money, and production. Also INRL 560a.

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.

ECON 546a, Macroeconomics. Shin-ichi Fukuda.
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. For IDE students.

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.

ECON 551b, Econometrics II. Donald Brown.
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.

ECON 552b, Econometrics III. Donald Andrews.
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.

ECON 553a, Econometrics IV: Time Series Econometrics. Peter Phillips.
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.

[ECON 554b, Econometrics V.]

ECON 555b, Applied Econometrics II: Microeconometrics. Michael Boozer.
This course develops the concepts needed to approach empirical problems in microeconomics with econometrics. The focus is less on developing a catalogue of econometric methods than on developing a conceptual basis for understanding how data, econometric methodology, and assumptions combine to produce statistical inference.

[ECON 557b, Time Series Econometrics II: Unit Roots and Co-Integration.]

ECON 558a, Statistics and 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.

ECON 567a and 568b, Econometrics Workshop. Donald Andrews, Peter Phillips.
A forum for state-of-the-art research in econometrics. Its primary purpose is to disseminate the results and the technical machinery of ongoing research in theoretical and applied fields.

ECON 570a and 571b, Prospectus Workshop in Econometrics. Donald Andrews, Peter Phillips.
A course for third- and fourth-year students doing research in econometrics to prepare their prospectus and present dissertation work.

[ECON 580b, General Economic History: Western Europe.]

ECON 581a, American Economic History. Carolyn Moehling.
This course studies the process of economic growth as it has occurred in the American economy.

ECON 582b, General Economic History: Latin America. Noel Maurer.

ECON 588a and 589b, Economic History Workshop. Staff.
A forum for discussion and criticism of research in progress. Presenters include graduate students, Yale faculty, and visitors. Topics concerned with long-run trends in economic organization are suitable for the seminar. Special emphasis given to the use of statistics and of economic theory in historical research.

ECON 600a, Industrial Organization I. Steven Berry.

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. Then turns to a detailed examination of the determinants and consequences of industrial market structure.

ECON 601b, Industrial Organization II. Judith Chevalier, Gautam Gowrisankaran.
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.

ECON 606a and 607b, Prospectus Workshop in Microeconomics. 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.

ECON 608a and 609b, Workshop in Applied Microeconomics. Staff.
For advanced graduate students in applied microeconomics, serving as a forum for presentation and discussion of work in progress of students, Yale faculty members, and invited speakers.

ECON 630a, Labor Economics. Joseph Altonji, Ann Stevens.
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.

ECON 631b, Labor Economics. Michael Keane.
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.

ECON 638a and 639b, Labor and Population Workshop. Staff.
A forum primarily for graduate students to exposit their research plans and findings. Discussions encompass empirical microeconomic research relating to both high- and low-income countries.

ECON 670a, Financial Economics I. Jonathan Ingersoll.
Theory of single-period financial models. Risk aversion, stochastic dominance, the canonical portfolio problem, the fundamental theorem of asset pricing, mean-variance analysis and its uses, mutual fund separation theory, arbitrage pricing theory, asset pricing in complete markets, and selected empirical topics. Also MGMT 740a.

ECON 671b, Financial Economics II. Zhiwu Chen.
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. Also MGMT 741b.

ECON 680a, Public Finance: I. Christopher Timmins.
Theoretical and empirical topics in public finance. Some emphasis on the relation between taxation and the following problems: efficiency, equity, and income distribution, uncertainty in capital markets, and aggregate capital accumulation.

ECON 681b, Public Finance: II. Hanming Fang, William Brainard.
Topics include theory of public goods, an introduction to preference revelation, the problem of externalities and their control, and the methodology of cost-benefit analysis and some applications.

ECON 700b, International Economics: Trade. Pinelopi Goldberg.
Pure theory of international trade covering the following topics: classical theory of comparative advantage and its modern counterpart, neoclassical theory (Heckscher-Ohlin-Samuelson model); recent models of trade with scale economies, product differentiation, and monopolistic competition; models of trade investment, innovation, and growth; gains from trade, commodity price-factor relations, theory of commercial policy.

ECON 701a, International Economics: Finance. Giancarlo Corsetti, Galina Hale.
International monetary economics covering the following topics: the balance of payments and the foreign exchange market; the elasticities, absorption, and monetary approaches to the foreign exchange market; the elasticities, absorption, and monetary approaches to the adjustment mechanism; long-term and short-term capital flows; Euro-dollars, portfolio and asset market approaches, policies for internal balance, flexible exchange rates, international reserves, and the monetary system.

ECON 702b, International Economics. Koichi Hamada.
International monetary theory and its implications for economic policy. Topics include mechanisms of adjustment in the balance of payments; fiscal, monetary, and exchange rate policy for internal and external balance; international movements of capital. For IDE students.

ECON 708b, International Economic Analysis. Cheryl Doss. M 1–3.20
A continuation of ECON 544a/INRL 560a. It extends the use of economic analysis to international trade and monetary policy including exchange rates and balance of payments with an emphasis on their relation to international trade, cross-border capital flows, and national economic policies. Introduction to quantitative tools and analysis as a way to determine the effects of various policies, building on concepts introduced in ECON 544a and the first part of this course. Also INRL 561b.

[ECON 709a, International Economics and Open Economy Macroeconomics.]

ECON 730a, Economic Development. T. N. Srinivasan.
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.

ECON 731b, Economic Development. Christopher Udry.
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.

ECON 732b, Economic Development. Robert Evenson.
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. For IDE students.

[ECON 735b^u, Economics of Agriculture.]

ECON 737b^u, 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.

ECON 738a/b, Workshop on Environmental and Natural Resources. William Nordhaus, Christopher Timmins, and Robert Mendelsohn.

ECON 749a and 750b, Trade and Development Workshop. Staff.
A forum for graduate students and faculty with an interest in the economic problems of developing countries. Faculty, students, and a limited number of outside speakers discuss research in progress.

ECON 776b^u, Economics of Population. T. Paul Schultz.
Analysis of economic aspects of population change, including fertility, mortality and health, composition of households, migration, and labor force behavior. Microeconomic models of household behavior and demographic measurement theory used to account for economic and demographic behavior of persons in low- and high-income countries.

ECON 788a, Political Competition. John Roemer. W 9–12
Political competition in democracies is party competition. We develop, from the formal viewpoint, theories of party competition in democracies. The familiar "median voter theorem" of A. Downs is the simplest example of such a theory, but it is inadequate in several ways. We develop a theory in which parties: (1) compete over several issues, not just one issue, as in Downs; (2) are uncertain about how citizens will respond to platforms; and (3) represent interest groups in the population. Applications, particularly to the theory of income distribution and taxation, are studied. Also PLSC 575a.

ECON 899a or b, Individual Reading and Research.
By arrangement with faculty.

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