Economics

http://wp.stolaf.edu/economics/

Chair, 2014-15: Anthony Becker, econometrics, microeconomics, antitrust and regulation

Faculty, 2014-15: Seth Binder, development, sustainable development; Kenneth Creech, accounting; Richard Goedde, finance, management; Richard Hirsch, accounting and personal finance; Ashley Hodgson, health care economics, microeconomics, and public policy; Rebecca Judge, microeconomics, environmental economics, public policy economics; Sian Muir, entrepreneurial studies, arts management, marketing; John Ophaug, business law; Mark Pernecky, macroeconomics, economic justice; Xun Z. Pomponio, international economics, Chinese economy; Brandt Richardson, statistics, microeconomics; Steven Soderlind, urban and regional economics; Paul Wojick, macroeconomics, economic philosophy

The Department of Economics seeks to create a teaching and learning community that provides students with varied opportunities for acquiring the necessary knowledge, analytical skills, and judgment to prepare them for personal and professional growth and for confident and responsible leadership in a rapidly changing world.

The department encourages students: (1) to learn about the economic, commercial, and governmental institutions that serve the American and international communities, (2) to be competent in economic and statistical analysis, and (3) to be cognizant of historical, global, and moral perspectives on economic and business issues.

OVERVIEW OF THE ECONOMICS major

Economics is the study of how people and organizations make decisions, how they interact with each other, and how institutions and policies can be designed to improve people’s lives. The ambition of those who study economics is to understand the world around them both as it is and as it ought to be. The basic principles of economics are applied to a wide range of social and political challenges that confront us today. These include international trade, environmental protection, health care, international development, domestic taxes, Federal Reserve policies, labor outsourcing, and the regulation of business.

The economics curriculum at St. Olaf includes theory, applications, institutional studies, and quantitative analysis. Where appropriate, economics courses also pursue historical and ethical concerns.

The department offers areas of emphasis for its majors who desire more focused study in finance, international economics, management, and public policy. The department also supports several programs available to students regardless of major: an interdisciplinary concentration in management studies, international off-campus courses, and internship opportunities.

The economics major serves as excellent preparation for careers in a wide variety of fields, including economic analysis, banking, accounting, consulting, health administration, finance, business management, teaching, and international affairs. The major also provides a solid foundation for students wishing to pursue graduate studies in economics, business, public policy, and law.

INTENDED LEARNING OUTCOMES FOR THE MAJOR

REQUIREMENTS FOR THE MAJOR

Majors in economics must meet the following minimum requirements: one course in mathematics: Mathematics 119 or 120, or its equivalent;  Economics 261 and 262; Economics 263, or Statistics 272 plus Economics 385; and at least four economic analysis courses.

Economics 261 and 262, and Economics 263, or Statistics 272 plus Economics 385, cannot be taken S/U. The economics major requires four economic analysis courses with a minimum of one at level II and two at level III.

Students studying off campus through St. Olaf affiliated programs may count up to two off-campus courses as level II economic analysis courses towards the economics major requirements. These courses must be approved in advance by the chair of the Economics Department, must be in recognized fields in economics, and must require at least Economics 121: Principles of Economics (or its equivalent) as a prerequisite.

DISTINCTION

Information about the criteria considered in conferring distinction is available on the department web page.

SPECIAL PROGRAMS
Areas of Emphasis

Areas of emphasis provide the opportunity for economics majors to pursue a more structured program of study beyond the normal major requirements. The department offers two management studies areas of emphasis and two economics areas of emphasis. Contracts for each area of emphasis must be individually negotiated with the appropriate director before the end of the student’s junior year. Students may be certified in one management studies and one economics area of emphasis.

Management studies areas of emphasis include finance and management. Each requires five management studies courses including a level III management studies course. A grade of C or better must be earned in each of the five courses. Members of the Classes of 2014 and 2015 who have declared an area of emphasis prior to September 1, 2013, and who successfully complete a management studies area of emphasis, may substitute the level III management studies course in their area of emphasis for one of the two level III economics analysis courses required for the economics major.

The finance area of emphasis requires Management Studies 225, Management Studies 237, Management Studies 281, plus two approved electives, at least one at level III. The management area of emphasis requires Management Studies 225, Management Studies 237, Management Studies 251, plus two approved electives, at least one at level III.

Economics areas of emphasis include international economic analysis and policy, and public policy economics. Majors who also complete an economics area of emphasis must complete three additional courses in economic analysis beyond the four that are required for the major. A grade of C or above is required for all courses in the area of emphasis.

The international economic analysis and policy area of emphasis requires Economics 382: International Economics; two Level II international-related courses chosen from the following: Economics 218, 238, and 243; and one elective outside the department that has an international emphasis, such as a course taken abroad. The public policy area of emphasis requires Economics 371: Economics of Public Policy and two economics analysis courses chosen from the following list: Economics 242, 244, 245, 249, and 385.

Concentrations and Interdepartmental Programs

The Economics Department participates in international studies programs and encourages its majors to take advantage of study in other countries. The department also participates in several interdisciplinary majors and concentrations, including American studies, Asian studies, management studies, Latin American studies, statistics, environmental studies, women’s studies, and the social studies education major.

recommendation for graduate study

Students considering graduate work in economics are advised to take additional courses in economic analysis (including Economics 385) and mathematics (Mathematics 126 or 128, 220, 226, 230, and 244).

COURSES

INTRODUCTORY COURSES

Courses numbered 110-120 all present a common core of economic principles, and, therefore, credit will be given for only one of these courses. Courses numbered 110-120 cannot be taken after taking Economics 121. Students may only take one course from among 110-120; none of these courses may be repeated.

110-120 Gateways to Economics

These courses introduce first-year students to principles of economics through special topics. Each course emphasizes the application of economic concepts to topics of general interest, capitalizing on the special interests and expertise of the faculty. A list of topics and course descriptions will be included with registration materials each semester. These courses are open only to first-year students.

111 Gateways to Economics: Transition Economies

At one time, roughly one-third of the world's population lived in countries with centrally planned socialist economies. The world has witnessed a series of astonishing transitions as these planned economies moved to introduce market reforms. This course introduces and applies the basic tools of economic analysis to understand and explore the transitions taking place in these countries. The course focuses principally on China and Russia but will include examples drawn from Eastern Europe and Cuba. Offered many Interims.

113 Gateways to Economics: Capitalism

This course uses major schools of economic thought and major economic writers from the past 600 years to introduce principles of economics. Readings include the architects of capitalism (Adam Smith, David Ricardo, etc.), the critics (Karl Marx, Thorstein Veblen, etc.), and the reformers (J.M. Keynes, Joseph Schumpeter, J.K. Galbraith, etc.). Offered many Interims.

114 Development of American Business

This course explores the changing structure of American business, the role of the individual in business development, and the challenges and opportunities that the corporate system poses for individuals, government, and society in general. The course uses basic economic concepts but does not require extensive knowledge of economic theory. The course follows a topics-based approach, considering the evolution of business and contemporary issues confronting corporations. Class discussions, small group activities, and guest speakers provide a varied pedagogical approach. Offered occasionally during Interim.

115 Gateways to Economics: Globalization and Poverty

Vigorous debates about globalization and poverty have circulated in the media for the past decade, gaining international attention as protests interrupted the 1990 WTO Ministerial Conference in Seattle. This course introduces economic principles and uses them to evaluate thoughts on globalization, trade, growth, and poverty as articulated by economists like John Maynard Keynes, Friedrich von Hayek, Joseph Stiglitz, Jagdish Bhagwati, Jeffrey Sachs, and William Easterly, and as enacted by institutions like the WTO, IMF, and World Bank. Offered many Interims.

117 Economics of Climate Change

Climate change challenges standard models used in economics and requires people to rethink assumptions on the sources of economic growth. Although important questions remain in the science of climate change, markets are already adapting to future volatility, and nations spend large sums on emissions abatement. This course analyzes the impact of climate change on various economic systems, introducing relevant economic concepts including discount rates, risk analysis, equity and welfare, models of economic growth, and spatial analysis. Offered occasionally during Interim.

121 Principles of Economics

This course takes an analytical approach to economic reasoning and contemporary issues. The course introduces microeconomic and macroeconomic theories with applications to relevant topics, such as employment, growth, environmental protection, affirmative action, exchange rate fluctuations, taxes, and welfare reform. Students explore economics as an intelligent approach to understanding our daily lives as citizens, workers, managers and consumers. Offered each semester. Counts toward environmental studies major (social science track).

CORE COURSES

261 Intermediate Macroeconomic Theory

This course addresses the economic institutions and forces that determine levels of income, output, employment, and prices in our society. Questions related to employment prospects and standard of living provide an important focus. Classical and Keynesian perspectives are employed in attempting to understand these matters, the macroeconomic problems in market economies and the policies that economists prescribe as remedies for these problems. Prerequisites: MATH 119 or MATH 120, and one of Economics 110-121 or permission of instructor. Offered each semester.

262 Intermediate Microeconomic Theory

Microeconomics is the study of the resource allocation decisions by households, producers, and government and the resource allocation process in various types of market structures. Students are trained in the use of economic models and optimizing techniques to address a variety of real-world problems, including case studies from business and public policy. Prerequisites: MATH 119 or MATH 120, and one of Economics 110-121 or permission of instructor. Offered each semester.

263 Statistics for Economics

This course emphasizes skills necessary to understand and analyze economic data. Topics include descriptive statistics, probability and random variables, sampling theory, estimation and hypothesis testing, and practical and theoretical understanding of simple and multiple regression analysis. Applications to economic and business problems use real data, realistic applications, and econometric/statistical software. Prerequisite: MATH 119 or MATH 120 and one of Economics 110-121, or consent of the instructor. Offered each semester. STAT 110, STAT 212, and ECON 263 all provide an introduction to statistics. ECON 263 is recommended for economics majors who do not plan to take both STAT 272 and ECON 385. Credit will not be given for more than one of STAT 110, STAT 212, or ECON 263; credit will not be given for STAT 110, STAT 212, or ECON 263 following completion of STAT 272.

ECONOMIC ANALYSIS COURSES, LEVEL II

200 Topics in Economic Analysis

In this course students apply the models, insights, and analytical techniques of economics to a specific topic or economic problem Topics vary from year to year. This course may be repeated if topics are different. Prerequisites: One of Economics 110-121 or permission of instructor. Offered occasionally.

218 Economic Progress in China (Abroad)

This course tracks economic development in China with emphasis on Shanghai. The course examines the emergence and evolution of markets in rural, urban, commercial, and financial centers and how the changes affect culture, attitudes, customs, and life of the people. Shanghai will be compared with other Chinese cities, including Nanjing, Suzhou, Hangzhou and Hong Kong. The role of Hong Kong in China's reform and its integration since 1997 is also discussed. Prerequisites: one of Economics 110-121 or permission of instructor. Offered alternate Interims. Counts toward Asian studies major and concentration.

220 Economic Justice

This course examines Christian ethics along with major frameworks in philosophical ethics (Utilitarianism, Liberalism, and Marxism) in addressing economic issues. Prerequisites: one of Economics 110-121 and completion of BTS-T or permission of instructor. Offered most years.

222 Game Theory in Economics

Game theory is the formal study of the strategic interactions between individuals and between groups of individuals. Game theory has become a widely adopted tool of analysis in economics, business, law, politics, anthropology, sociology, and international relations. This course introduces students to the theoretical constructs of game theory and focuses on economic applications in the fields of labor economics, international trade, environmental economics, macroeconomics, and industrial organization. Prerequisite: one of Economics 110-121 or permission of instructor. Offered most years.

238 Economic Development in Japan

This course provides an overview and analysis of Japan's economic development, beginning with a review of the foundations for growth in the 19th century and focusing on the era of rapid growth in the post WWII period. Students investigate the interaction of culture and the economy, Japan's corporate capitalism, the "economic miracle," Japan-U.S. relations, and prospects for future growth. Prerequisite: one of Economics 110-121 or permission of instructor. Offered occasionally.

242 Environmental Economics

The powerful insights of microeconomic analysis inform this consideration of environmental policy and regulation. Coursework emphasizes issues germane to setting and attaining specific environmental objectives - how much pollution to allow, how much to encourage preservation, how much cutting to permit. By considering whether and how to assign monetary values to goods like species diversity and climactic stability, students gain practical experience applying benefit-cost analysis to environmental decisions. Prerequisite: one of Economics 110-121 or permission of instructor. Offered annually. Counts towards American studies major. Counts toward environmental studies major (all tracks) and concentration.

243 Economic Development

Students in this course learn and apply economic analysis, tempered by an appreciation for the political and institutional contexts of the less developed countries, to gain an understanding of these countries' economies. Using cases involving both written and oral analysis, students explore topics such as economic growth in Brazil, trade strategies in Singapore, poverty and income distribution in Taiwan, or macroeconomic performance in Mexico. Prerequisite: one of Economics 110-121 or permission of instructor. Offered annually. Counts toward environmental studies major (social science track) and Latin American major and concentration.

244 Business, Government, and the Marketplace

Students in this course gain a critical understanding of the economic implications of several forms of government regulation by studying antitrust, traditional regulation and topics in environmental, consumer, and workplace regulation. These different ways governments influence market outcomes are examined from both historical and economic perspectives. Prerequisite: one of Economics 110-121 or permission of instructor. Offered occasionally. Counts towards American studies major.

245 Economics of Health Care

The health care sector in the U.S. is undergoing rapid change that affects patients, providers and payers. Managed care and managed competition are restructuring the delivery of health care services and reducing costs, while frustrating physicians and patients. The course examines the economic factors leading to the changes, current issues and controversies, and federal health policies. Students interested in nursing, medicine, and the sciences are encouraged to enroll. Prerequisites: one of Economics 110-121 or permission of instructor. Offered most years. Counts towards American studies major. Counts toward biomedical studies concentration (for students through class of 2016).

247 History of Economic Thought

Many aspects of our lives and our society are influenced by the ideas (or the theories) of economists. This course explores where economic ideas have come from, how they have changed over time and the extent to which they are compelling. While the ideas of many important figures are covered, economists such as Smith, Ricardo, Marx, Marshall, and Keynes receive particular attention. Prerequisite: one of Economics 110-121 or permission of instructor. Offered annually.

249 Urban Economics

This class applies economic principles to issues of urban development. Topics include urban economic history, location analysis, policy analysis (especially concerning poverty, housing, transportation and education), land use controls, and macroeconomic forecasting. Prerequisites: one of Economics 110-121 or permission of instructor. Offered annually.

ECONOMIC ANALYSIS COURSES, LEVEL III

371 Economics of Public Policy

Government action affects us all. We pay taxes; we use public roads, schools, and parks. Some prices we pay are lower due to government subsidies; others are higher due to taxes. Government actions influence both the efficiency of our economy and the equity and equality within our society. Students learn valuable analytical tools for evaluating public projects, tax policies, entitlement programs and voting behavior. Prerequisite: ECON 262 and either ECON 263 or STAT 272, completion of BTS-T, or permission of instructor. Offered most years. Counts toward American studies major.

372 Behavioral Economics

Classic economics assumes that people make decisions rationally. Behaviorial economics weakens that assumption, incorporating the findings of psychology into economic models. Students learn to apply behaviorial economics theories to improve their understanding of business, marketing, public policy, and other domains of economics. Students utilize skills they have learned from microeconomic theory and statistics orally and in writing. Prerequisites: ECON 262 and either ECON 263 or STAT 272, or permission of instructor. Offered most years.

374 Money and Banking

This course addresses the institutions that comprise modern monetary systems and the influence that these systems have on levels of income, output, employment, and prices in market economies. Monetary theory and monetary policy, including both the nature of our central bank and the role that it plays in our monetary system, are also addressed in some detail. Prerequisite: ECON 261 and either ECON 263 or STAT 272, or permission of instructor. Offered annually. Counts towards American studies major.

376 Labor Economics and Employment Relations

What do workers want from work? What do employers want from workers? Pressing policy issues exist for workers competing in the global economy. Unions, unemployment insurance, welfare and the minimum wage enhance the prospects of many, while leaving others even worse off. This course utilizes microeconomic theory, statistics and institutional analysis to understand labor markets. Prerequisites: ECON 262 and either ECON 263 or STAT 272, completion of BTS-T, or permission of instructor. Offered most years. Counts towards American studies major.

382 International Economics

This course offers the students an integrated approach of theory, policy, and enterprise to understand international trade and investment. The course focuses on the costs and benefits of global economic interdependence for students who plan to enter an international business career or to work for government and international organizations in activities affected by international economic relations. Prerequisites: ECON 261 and ECON 262, and either ECON 263 or STAT 272, or permission of instructor. Offered annually.

385 Econometrics

Ideal for students interested in applying statistical models to economic problems, this course emphasizes theoretical foundations, mathematical structure and applications of major econometric techniques, including ordinary least squares, generalized least squares, dummy variables, non-linear transformations, instrumental variables, simultaneous equation modeling, and time series models. Students in the class complete a sophisticated economic research project of their choice. Prerequisites: ECON 261 and either ECON 263 or STAT 272 or permission of instructor. Offered annually.

399 Seminar

Selected topics to be announced. May be repeated if topics are different. Prerequisites: ECON 261 and/or ECON 262 (at the discretion of the instructor) and either ECON 263 or STAT 272, or permission of instructor.

OTHER COURSES

294 Internship

298 Independent Study

394 Internship

396 Directed Undergraduate Research: "Topic Description"

This course provides a comprehensive research opportunity, including an introduction to relevant background material, technical instruction, identification of a meaningful project, and data collection. The topic is determined by the faculty member in charge of the course and may relate to his/her research interests. Prerequisite: determined by individual instructor. Offered based on department decision. May be offered as a 1.00 credit course or .50 credit course.

398 Independent Research

RELATED COURSES

MANAGEMENT
(See MANAGEMENT STUDIES section of this catalog.)