Graduate Program / PhD Program in Detail / Graduate Course Descriptions

Graduate Course Descriptions 2007-2008 (revised 1/4/08)

30100   PRICE THEORY I  (Murphy / Becker)

Theory of consumer choice, including household production, indirect utility, and hedonic indices.  Models of the firm.  Analysis of factor demand and product supply under competitive and monopolistic conditions.  Static and dynamic cost curves, including learning by doing and temporary changes.  Uncertainty applied to consumer and producer choices.  Property rights and the effects of laws.  Investment in human and physical capital.  (=LAWS 43611)

30200   PRICE THEORY II  (Becker / Murphy / Myerson)

The first five weeks of this course are a continuation of ECON 30100, Price Theory I.

The second half of the course begins with expected utility theory, and then introduces the fundamental ideas of game theory: strategic-form games, Nash equilibrium, games with incomplete information, extensive-form games, and sequential equilibrium.  (=LAWS 43621)

30300   PRICE THEORY III  (Sonnenschein / Reny)

The first half the quarter will be devoted to the Walrasian model of general competitive equilibrium as developed by Arrow and Debreu.  This will begin with a brief development of the consumer and producer theories, followed by the welfare theorems connecting equilibria and optima and a treatment of the classical existence of equilibrium theorem.  The core of an economy, a limit theorem relating the core to the set of competitive equilibria, and models in which agents are small relative to the market will also be considered.  Finally we will study general equilibrium under some alternative assumptions; such as, informational asymmetries and rational expectations equilibrium, public goods and Lindahl equilibrium, financial general equilibrium and asset pricing.

The second half of the course will focus on the effects of informational asymmetries in markets.  The course begins with optimal risk sharing when individuals have the same information, and then problems of moral hazard and adverse selection are introduced.  Topics include: signaling and screening in competitive markets, principal-agent problems, strategic and informational incentive constraints, incentive efficiency, and mechanism design for auctions and bilateral trading.

30400   INTRODUCTION TO MATHEMATICAL METHODS IN ECONOMICS  (Szentes)

This optional two-week course for incoming graduate students meets September 4 through September 17, 2007 and introduces some basic mathematical concepts used in economic theory: a "briefing" of the math students will encounter in the Core classes.  Emphasis is placed on problem-solving, but also on some fairly abstract math you might not see otherwise.  Cooperative work is strongly encouraged.

30500   GAME THEORY  (Szentes) 

This course will serve as an introduction to areas of recent research in game theory. Topics include: foundations of solution concepts in games with incomplete information, repeated games with imperfect monitoring and other forms of asymmetric information, models of learning in games.

30600   THE ECONOMICS OF INFORMATION  (Harris)

This course introduces students to a range of economic tools used to study models explicitly involving strategic behavior, information transmission, and contracting in economics and finance. The intention is to prepare the student to conduct research using these tools.  Techniques studied include agency theory, signaling models, and sequential games of incomplete information. In addition, some applications of the tools will be covered. The approach is rigorous and analytical. First class assignment: purchase the required materials, read the syllabus (with special attention to the section on prerequisites), and read the article "Moral Hazard and Observability" by Bengt Holmström (Bell Journal, spring 1979) which can be downloaded from JSTOR. The syllabus is available on the “GSB Syllabi” link on Chalk: https://chalk.uchicago.edu/webapps/portal/frameset.jsp?tab_id=_109_1 PQ:  ECON 30100-30200.  (=GSBC 33911)  

30801   CONTRACTS AND MECHANISM DESIGN  (Pavan)

The course is divided into five parts. 1) Dynamic adverse selection: (a) mechanism design in a non-stationary environment; (b) renegotiation-proof optimal contracts; (c) ratcheting; (d) collusion. 2) Multilateral contracting: (a) common agency; (b) competing mechanisms; (c) contractual externalities. 3) Property rights and the theory of the firm. 4) Foundations of incomplete contracts: (a) the hold up model; (b) option contracts; (c) cooperative investments; (d) complexity. 5) Theory of organizations: (a) authority; (b) career concerns; (c) delegation; (e) relational contracts.

31000   EMPIRICAL ANALYSIS I  (Schennach)

This course introduces students to the basic OLS regression model, including generalized least squares, before moving on to more advanced topics such as asymptotic theory and hypothesis testing for maximum likelihood estimation and nonlinear least squares.

31100   EMPIRICAL ANALYSIS II  (Hansen / Uhlig)

This course will explore decision theory as it applies to econometric problems.  It will develop time series methods pertinent for the analysis of dynamic economic models.  Vector autoregressive methods for identifying shocks and their transmission and related filtering methods for models with hidden states will be investigated.  Generalized method of moments and indirect inference methods will be studied.  These econometric methods will be applied to models from macroeconomics and financial economics.

31200   EMPIRICAL ANALYSIS III  (Neal / Hortaçsu)

The course will cover methods that economists use in applied microeconomic research. Our focus will be on exploring and understanding data sets, evaluating predictions of economic models, and identifying and estimating the parameters of economic models.  The methods discussed will include regression techniques, maximum likelihood, method of moments estimators, as well as some non-parametric methods. Lectures and homework assignments will seek to build proficiency in the correct application of these methods to economic research questions.

31800   ADVANCED ECONOMETRICS  (Conley)

This course is concerned with the study of econometric techniques using time series and spatially dependent cross section data.  The course will focus more on understanding how to use estimators in practice than on derivation of their sampling properties.  Specific topics in the course will include generalized method of moments estimation, spatial dependence modeling, and vector autoregression models.  There are applications of these techniques in finance, macroeconomics, marketing, industrial organization, development, and other fields as well.  Various applications from these fields will be discussed at length during the course.  Grades will be determined by a course project replicating and (slightly) extending previous empirical research.  PQ:  Econ 31000-31200.  (=GSBC 41911)

32000   TOPICS IN AMERICAN ECONOMIC HISTORY  (Galenson)

Economic analysis is applied to important issues in American economic history.  Specific topics vary, but may include the following:  the economics of colonization, the transatlantic slave trade, the role of indentured servitude and slavery in the colonial labor market, the record and sources of 19th-century economic growth, economic causes and effects of 19th-century immigration, the expansion of education, the economics of westward migration, determinants of long-run trends in the distribution of income and wealth, the quantitative analysis of economic and social mobility, and the economics of racial discrimination in the twentieth- century South.  PQ:  ECON 20000.  (=ECON 22200)

32100   COLONIZATION, SERVITUDE, AND SLAVERY: THE EARLY AMERICAN EXPERIENCE  (Galenson)

This course considers economic analysis of the early American labor market, drawing on new research on the economic and social history of the colonies.  Topics include the English background and economic stimulus to colonization, economics of the Jamestown experiment, mortality in the early colonies, the economics of white indentured servitude, opportunities for immigrants, the economics of the transatlantic slave trade, the growth of black slavery, and the wealth of the colonies.  PQ:  ECON 20000.  (=ECON 22100)

32200   POPULATION AND THE ECONOMY  (Fogel)

This course deals with the effects of swings in population on the stability of the economy and on business opportunities.  In both the short run and the medium run, shifts in the demographic rates, including migration, probably have been more destabilizing than unwise macroeconomic policy or abrupt political realignments.  Population change thus constitutes a major challenge to policy makers in business and in government.  Topics covered include:  the effects of demographic changes on markets for labor and capital, on savings rates and the structure of investment, on pensions and health care costs, on taxes and government expenditures, and on household behavior.  Special attention is given to development in China and India.  Problems of planning for the consequences of population changes, including methods of forecasting, are also considered.  The grade for this course is based on problem sets discussed during T.A. sessions, a midterm, and a final examination. PQ:  GSBC 33001 or the equivalent.  (=ECON 22500 =GSBC 33470)

32300   A GUIDE TO BUSINESS ETHICS (Fogel)

This course examines the way that religious and political movements affect the ethics of business.  It focuses on such current issues as the conflict between technical efficiency and morality, the ethical status of property rights, the politics of retirement and intergenerational equity, the ethics of the distribution of income and other conflicts between ethical and economic standards for compensation, the ethics of international trade and finance, globalization, agency problems, and ex post redefinitions of the legal status of de facto business practices.  These issues are put into historical perspective by relating them to long cycles in religiosity in America, to the long-term factors influencing political images of business, and to the factors influencing domestic conceptions of the proper economic relationships between the U.S. and the rest of the world. The grade for this course is based on a midterm and a final examination. (=ECON 22300 =GSBC 38114)

32400   ECONOMICS AND DEMOGRAPHY OF MARKETING  (Fogel)

This course focuses primarily on problems in strategic marketing forecasts that are related to long-term product development and new technologies.  Alternative procedures for estimating variations in the demand over business cycles (3-5 years), intermediate periods (5-15 years) and long periods (15-50 years) for both consumer and producer commodities and services are considered.  Much attention is given to the impact of rapid economic growth in China and India on global markets.  Attention is also given to the use of existing on-line databases for the estimation of a variety of forecasting models.  Students receive hands-on-the-data-training in statistical sections that meet throughout the quarter.  In addition, there are two lectures per week that deal with four broad topics:  the evolution of markets and of methods of distribution in America and globally since 1800; variations in the life cycles of products; the role of economic and demographic factors in the analysis of long-term trends in product demand; the impact of technological change; and the influence of business cycles on product demand.  The grade for this course is based on problem sets discussed in the weekly statistical lab and a final examination. (=ECON 22700 =GSBC 37104)

33000   THE THEORY OF INCOME I  (Alvarez)

This course formulates and analyzes aggregate general equilibrium models to study classical questions in macroeconomics. The course starts with the formulation and analysis of competitive equilibrium in the general equilibrium models, including the 1st and 2nd welfare theorem. The first applications of this model are: social security (using an OLEG model), optimal risk sharing, and asset pricing (using a one period model with uncertainty). Most of the remaining applications focus on dynamic models without uncertainty. To do so we study tools to characterize optimal solutions of control problems: Hamiltonian, calculus of variations and dynamic programming. The main application of these tools is the neoclassical growth model in many variations: determinants of steady state and balanced growth path, endogenous growth, effect of variable labor supply, TFP changes and of investment specific technical progress, habit formation, the q-model of investment, taxation of capital and labor, optimal taxation a la Ramsey, among others.

33100  THE THEORY OF INCOME II  (Stokey) 

This course will focus on the use of recursive general equilibrium models to study various macroeconomic questions.  On the substantive side, particular topics include models with idiosyncratic (insurable) and aggregate (uninsurable) risk; issues in dynamic fiscal policy (Ricardian equivalence, tax smoothing, capital taxation); models of asset pricing; issues in monetary policy (money demand, the welfare cost of inflation); time consistency; and aggregate models with price setting. On the methodological side, the course will focus on dynamic programming and other recursive modeling techniques.

33200   THE THEORY OF INCOME III  (Shimer)

This course examines a variety of models and empirical evidence, including: labor market imperfections (job search, implicit contracts, efficiency wages); labor supply (intertemporal substitution, indivisible labor, home production); foundations of monetary economics;  monopolistic competition and price setting;  investment under uncertainty and credit market imperfections;  and technological innovation.  We will focus on dynamic general equilibrium models throughout.

34201   APPLIED PRICE THEORY (Murphy / Oster)

This course examines how the principles of microeconomics can be used to analyze a wide range of legal, business, health, and public policy issues.  The emphasis of the course will be on how to apply economics to practical problems and how to use those tools to generate theoretical and empirical analyses that are useful for professional economists, policy makers and the general public.  The requirements for the course are a short essay and a final exam as well as preparation for weekly discussions on current policy issues.

34300   HUMAN CAPITAL  (Becker)

This course covers both micro and macro aspects of human capital.  Investments by parents in the education and other human capital of their children.  Intergenerational transmission of inequality.  The links between specialization in particular types of human capital and coordination costs, general knowledge, and the extent of the market.  The relation between human capital, population change, and economic growth is also emphasized.  (=SOCI 30306)

34500   EMPIRICAL LABOR ECONOMICS (Heckman)

This course presents theory and evidence on skill formation, wage determination, inequality and the impact of public policies on the labor market.

CANCELLED:  34701   MICROECONOMETRICS OF ENDOGENOUS REGRESSORS IN SEMIPARAMETRIC AND NONPARAMETRIC MODELS (Vytlacil)

There has been a recent explosion of interest in semiparametric and nonparametric models with endogenous regressors, with much of this interest driven by applications in labor, health, and industrial organization. This course considers alternative methods for cross-section models with endogenous regressors, including instrumental variable, selection model, control function, control variate, and regression discontinuity approaches.  For each approach, the course will review the classic, parametric literature using the approach, and then cover the corresponding semiparametric and nonparametric literatures.  The course will focus on identification and bounding analysis, but will also cover estimation and inference issues.  We will consider alternative models of schooling, and use the models to judge the appropriateness of alternative assumptions required by the econometric approaches. We will consider applications to both labor and health economics.

35301   INTERNATIONAL TRADE AND GROWTH  (Lucas)

This course is the first in a three course sequence on International Trade and Economic Growth. We will review the basics of neoclassical growth theory, and the theories of trade associated with Ricardo, Heckscher and Ohlin, Helpman and Krugman, Dornbusch, Fischer, and Samuelson, and Eaton and Kortum. We review some recent attempts at a unified theory of growth and trade.

35700   FIRMS AND INTERNATIONAL TRADE  (Chaney)

This course follows Lucas’ ECON 35301 course on International Trade and Growth. It introduces students to recent theories of international trade, with a special emphasis on the role of firms. We will study the importance of heterogeneity at the firm level, and how it shapes the patterns of international trade. In addition, we will try and understand the causes and consequences of outsourcing, foreign direct investment, as well as the role of multinational firms.

35800   QUANTITATIVE ANALYSIS IN INTERNATIONAL TRADE (Kortum)

This course is the last in the sequence on International Trade and Growth.  It covers recent quantitative work in international trade. It explores the behavior of individual producers in international markets, trade flows between nations, and aggregate growth. It develops theoretical models, evaluates their ability to capture key stylized facts, shows how to estimate their parameters, and demonstrates their use in performing policy experiments.  The course involves a mix of theory, data, econometrics, and computation.

36200   PUBLIC SECTOR ECONOMICS  (Mulligan)

The concept of "market distortion" is used to formulate measurements, explanations, and consequences of government activities including tax systems, expenditure programs, and regulatory arrangements. Topics include cross-country comparisons of government behavior, predicting microlevel responses to policy, measuring and evaluating the incidence of government activity, alternative models of government decision-making, and the application of public finance to other economics fields.

36301   PUBLIC ECONOMICS  (Meyer)

This course covers areas of active empirical research on the design and effects of taxes and government spending.  The areas covered are welfare economics, income taxation and labor supply, optimal income taxation, the effects of welfare and social insurance programs including AFDC/TANF, social security, unemployment insurance, workers' compensation, and disability insurance.  While the emphasis is primarily empirical, the course begins each topic with the main theoretical work in that area.  (=PPHA 44000)

36401   PUBLIC POLICY AND EMPLOYMENT  (Shimer)

This course will study the effect of public policies on labor market outcomes, with a focus on differences in employment and hours between the U.S. and Europe.  The policies studied will include consumption and labor taxes, unemployment benefits, firing restrictions, unions, and labor and product market regulations.  The course will also examine the political economy and normative role of these institutions.

36800   THEORETICAL MODELS OF DEVELOPMENT  (Basu / Myerson)

In this course, all students will read and present papers from the published literature on theoretical models of economic development.  Underdevelopment is considered as market incompleteness, both at the economy-wide level and at the micro level with informal institutions.  Topics include credit, informal banking, information and coordination, production and agriculture, institutions, macro growth, and labor.

36900   TRANSFORMATION ECONOMIES  (Kaboski)

This course focuses on macroeconomic trends in developing economies.  In particular, we will study changes in the allocation of output and resources across sectors/divisions in the economy, including:  the traditional sectors of agriculture, industry and services; home vs. market production, and establishments of different scales.  We will examine the extent to which misallocations across these sectors due to financial frictions or policy distortions lead to slower or lower levels of development.

37000   ENTERPRISE AND THE EVALUATION OF FINANCIAL SYSTEMS: APPLIED GENERAL EQUILIBRIUM ANALYSIS  (Townsend)

This course is about how to evaluate the financial systems of developing economies. Specifically, the course evaluates the impact of financial institutions, markets, and policies on growth, inequality, poverty, and the welfare of households and businesses. The financial system comprises the role of informal and formal financial sectors in the intermediation of savings and credit and the allocation of idiosyncratic and aggregate risk. If markets and institutions were perfect, and there were no policy distortions, then certain benchmark standards would be implied. Relative to these benchmarks, there are many anomalies in developing economies, even for those using formal credit and savings instruments. Likewise, various government program innovations and plausibly exogenous variation in access to intermediation have had nontrivial impact on households and businesses. More generally, enhanced finance is established to be correlated with and causally related to growth of GDP and poverty reduction, though with mixed consequences for the distribution of income. A repeated theme is the description of an entire economy as an integrated micro-macro system, with the choices of diverse individual agents aggregated up to explain macro variables. Choices are shown to be constrained by real obstacles to trade, e.g., moral hazard, adverse selection, limited liability, collateral/default and transactions costs, but markets and contracts may be incomplete even beyond the associated, revised benchmark standards. Mechanism design and contract theory are featured. More generally, policy variables play an important role in choices and outcomes. Thus there are nontrivial gains and losses to financial policy variation. Topics for special consideration include enterprise, measurements, IV and structural estimation of policy impact, and GIS/geography and applied general equilibrium analysis. (=GSBC 35920)

37900   DYNAMIC CONTRACTS WITH MACRO APPLICATIONS  (Fuchs)

In this course we will study the properties of dynamic and recursive contracts and how they can be used to model problems in Macroeconomics. Applications include: problems of social insurance when there are incentive problems; cooperation with lack of commitment and credibility of government policies.

38000   SOLVING, ESTIMATING AND ANALYZING STOCHASTIC MODELS OF THE MACRO ECONOMY  (Hansen / Uhlig)

This course will develop quantitative methods for studying dynamic, stochastic, general equilibrium models.  Alternative solution approaches will be explored. Complementary methods of estimation and methods that characterize short run and long run model properties will be justified and applied.  A variety of applications from macroeconomics and asset pricing will be considered. (=GSBC 33945)

38100   OBSERVABLE IMPLICATIONS OF EQUILIBRIUM MODELS IN MACROECONOMICS AND FINANCE  (Heaton / Hansen)

This class will explore the time series and cross sectional implications of alternative models that relate asset pricing and macroeconomics.  Models with alternative investor preferences and alternative market structures will be investigated. (=GSBC 35911) 

38900   THEORY OF FINANCIAL DECISIONS I  (Fama)

This course is concerned with models for portfolio decisions by investors and the pricing of securities in capital markets.  The material is covered in a rigorous analytical manner, although formal technical requirements are minimal.  The reading list is extensive.  The expectation is that the average student spends 15+ hours per week on the course, outside of class.  Grades are based on weekly take-home exam questions, about five problem sets, and a term paper. Class participation (I cold call) is also used to determine grades.  Cannot be taken pass/fail or audited. Written proof of permission from the Instructor to enroll in this class is required at the time of registration.

This course is intended for (i) first-year GSB Ph.D. students with no finance and (at best) undergraduate economics and statistics backgrounds, and (ii) second-year MBA students with rather minimal economics and statistics backgrounds.  Students with stronger backgrounds in economics and statistics are likely to find the pace of the course, and the exam and problem set requirements, somewhat tedious.  Such students are better served by the GSB Ph.D. Asset Pricing courses offered by Cochrane, Constantinides, and Heaton.  (=GSBC 35901)

39001   THEORY OF FINANCIAL DECISIONS II  (Diamond / Rajan / Rauh)

This course provides a theoretical and empirical treatment of major topics in corporate finance, including: capital structure and financial contracting; investment decisions; bankruptcy; and the market for corporate control.  The course is designed for Ph.D. students interested in corporate finance.  Grades will be based on problem sets, referee reports, and a final examination.  PQ:  ECON 38900/ GSBC 35901.  (=GSBC 35902)

39100  ASSET PRICING  (Cochrane)

This is the first course in the Ph.D. asset pricing sequence. We will march through the book Asset Pricing as far as possible. Main topics will be: 1) Discount factors and the consumption-based asset pricing model; 2) Mean-variance analysis; 3) Linear factor pricing models CAPM, ICAPM, APT; 4) GMM and regression based tests of asset pricing models; 5) Term structure of interest rates; 6) Black-Scholes and its extensions; 7) Empirical survey: Equity premium, volatility, predictability, and multiple factors; 8) New utility functions; 9) Portfolio theory. PQ:  Most students take this course in their second year.  You need at least one Ph,D. level macroeconomics course, and one Ph.D. level time series course before taking this course.  (=GSBC 35904)

39200   TOPICS IN EMPIRICAL FINANCE  (Heaton / Hansen)

The central question of empirical finance is “what are the real sources of aggregate risk that determine asset prices?" This course focuses on current topics in empirical finance that address this question.

This course begins with a review and synthesis of asset pricing and macroeconomic theory. The emphasis is on the stochastic discount factor framework for thinking about asset pricing, and the course spends some time exploring this framework and relating it to traditional expected return-beta statements of asset pricing models. 

The class discusses some econometric issues in assessing asset pricing models, including the relationship between GMM and traditional tests. Finally, the course surveys current empirical work in consumption-based models, investment or production based models, volatility tests and predictability, and the effects of individual heterogeneity and frictions in asset markets.

PQ: Students should have some Ph.D. level background in macroeconomics, finance, and time-series econometrics.  (=GSBC 35905)

39400   THEORY OF FINANCIAL DECISIONS III  (Diamond / Zingales)

We plan to cover three broad topics in this course: (1) theory of the firm; (2) the development of financial markets and its effects on real markets; and (3) financial intermediaries. We will start by trying to understand why firms exist. This will naturally lead on to questions about their organizational and control structures and about the way they are financed. Financial intermediaries play a key role in financing and we will attempt to understand why they are useful. Among the topics we will examine are the effects of financial contracts and intermediaries on incentives, commitment, and the liquidity of markets.  This course is intended for Ph.D. students and advanced M.B.A. students who have a substantial understanding of formal economics and some basic game theory.  Grades will be based on problem sets, referee reports, and a final examination.  PQ:  ECON 39001/ GSBC 35902.  A solid background in advanced microeconomics is highly recommended.  (=GSBC 35903)

39600   TOPICS IN ASSET PRICING  (Veronesi)

This Ph.D-level course covers topics in the area of dynamic asset pricing, including standard complete market models, incomplete markets, portfolio constraints and transaction costs, learning and uncertainty, asymmetric information and other recent developments such as non-time additive preferences. The course will also cover selected topics in the area of derivative pricing and term structure models.  (=GSBC 35907)

40101   ADVANCED INDUSTRIAL ORGANIZATION I  (Fox)

40201   ADVANCED INDUSTRIAL ORGANIZATION II  (Syverson)

This is a two-quarter sequence in industrial organization taught jointly at the Ph.D. level in the Department of Economics and the Graduate School of Business.  Topics include the theory of the firm, multi-product cost functions, natural monopoly, oligopoly, strategic behavior, monopolistic competition, nonlinear pricing, network externalities, technical change, antitrust and regulation.  Recent theoretical and empirical approaches are emphasized.  Materials:  Carlton and Perloff, Modern Industrial Organization; Tirole, The Theory of Industrial Organization, and a packet of articles.  PQ: Solid background in microeconomics, e.g., ECON 30100, 30200, or 30300.  (=GSBC 33921, 33922)

NEW!!    40901    APPLICATIONS OF CONTRACT THEORY TO DEVELOPMENT, FINANCE, AND LABOR (Townsend)

Economic literature is typically subdivided between theory, on the one hand, and empirical work, on the other. Much of the literature in contract theory and mechanism design takes the theory route while empirical work for the most part does not use these theoretical underpinnings. The purpose of this course is to discuss how to put contract theory and empirical work together.  We shall start with full information and/or complete markets frameworks, and then add impediments to trade (private information, limited commitment, and other obstacles/frictions). At each step we will either take the theory to data, or entertain discussions about how to do this, in applications which include development, finance, and labor among other areas. Topics include risk sharing in consumption, labor, and investment in developing countries; liquidity, collateral, security design, default, and the current state of financial markets; and banks, networks, and how to think about the distinction between formal and informal intermediation. Class time will be used for lectures and for presentations by students of the relevant recent literature. The focus of the latter is how to present material, critique published articles, be clear about modeling, and think about how to make judgments across different models and approaches.  There will be group discussions in class of what is missing and how to extend. A focus will be the generation of ideas for research, helpful to students in finding dissertation topics and doing research more generally. Active participation of each student is required.

41100   EXPERIMENTAL ECONOMICS  (List)

This course will provide the student with the necessary tools to be an avid consumer of the experimental literature and eventually a producer of the literature.  These issues will be discussed through evaluation of both outstanding papers in the literature, and papers that fail to achieve their full potential. Thus, it will provide a summary of recent experimental findings and detail how to gather and analyze data using experimental methods.  Students will be expected to carry out their own original empirical research to meet the course requirements.  (=ECON 21800)

41400   BROWNIAN MODELS  (Stokey)

The course will begin with some basic mathematical concepts: stochastic processes, Brownian motion, stopping times, Markov property, diffusions, stochastic integrals, Ito's lemma, occupancy measure, local time, Tanaka's formula, martingales, and the optional stopping theorem. We will then focus on models with fixed costs of adjustment and shocks that are Brownian motions or other diffusions. Specific topics will include menu cost models of price adjustment, inventory control, consumer durables, and investment.

41800   NUMERICAL METHODS IN ECONOMICS  (Judd)

This course introduces a broad range of numerical methods, and then uses them to compute equilibrium in economic models and related econometric estimators. We will study examples of computational techniques in the current economic literature as well as discuss areas of economic analysis where numerical analysis may be useful in future research of dynamic economic problems. Applications will include solution of dynamic stochastic general equilibrium models, life-cycle dynamic programming problems, optimal taxation, nonlinear pricing, Nash equilibrium of dynamic games, and estimation of structural models.

NEW!!    41901/41902         LONGITUDINAL DATA ANALYSIS I & II  (Heckman)

This course acquaints students with the basic tools for analyzing panel and longitudinal data on individual event histories and life cycle trajectories.  Students will become acquainted with the wealth of panel and longitudinal data, the basic methods for analyzing these data, and relevant analysis program and software tools.

The topics include:  basic demographic analysis; single state and multi-state duration analysis for discrete time and continuous time models; issues of sampling frames; panel data econometric methods (random effects and fixed effects and their generalizations for general forms of heterogeneity); the analysis of treatment effects and econometric policy evaluation including propensity score matching and new extensions; and dynamic discrete choice.

Methods for computation and hands-on experience will be stressed.  Credit for the course will be based on empirical projects.  The pace of coverage will be dictated by student interest and research questions.  The course will operate as a weekly seminar with lectures and interaction.  (=PPHA 45400)

The second course will build upon the first, offering a more diverse range of topics, as well as additional methodology.  (=PPHA 45401)

Note:  only one of these two courses may be counted for a General Distribution Requirement.

42100   AN INTRODUCTION TO DOING EMPIRICAL MICROECONOMIC RESEARCH  (Levitt)

This course is designed to give students early in their graduate careers exposure to carrying out their own empirical micro-focused research.  Attention will be paid to every step in the process: idea generation, the use of data, identifying the right tools to answer the question at hand, testing hypotheses, making arguments convincing, etc.  These issues will be discussed through evaluation of both outstanding papers in the literature, and papers that fail to achieve their full potential.  Students will be expected to carry out their own original empirical research to meet the course requirements.

42300   INTRODUCTION TO DOING FORMAL ECONOMIC THEORY  (Sonnenschein)

This course gives second and third year graduate students (primarily) the opportunity to present research in economic theory and to sharpen and refine their results and exposition.  The rules are simple:  If you enroll you must sign up to present a paper.  The paper must be original; it must not be an exposition of somebody else's work.  It can be short.  It need not represent a great leap forward.  Written material, but not necessarily a complete draft must be distributed to the class at least three days before your presentation.  This material must contain at the least, a clear statement of your result, plus some context, including why one should be interested in the result to be offered.  Everyone enrolled is expected to read this material each week and be prepared to participate in a discussion.  Presenters may wish to invite faculty who got them interested in their project.  The first two or three weeks will be devoted to expositions of some open problems in microeconomic theory by guest speakers.

NEW!!    44300    POVERTY, INEQUALITY AND SOCIAL POLICY IN LATIN AMERICA  (Barros)

This course will consider three interrelated topics.  First, it will review the evidence on the evolution of poverty and inequality in Latin America over the past three decades.  Next, it will uncover the roots of poverty and inequality in the region.  Finally, it will consider the policies that are being used in the region to fight poverty and inequality.  The course will also evaluate the effectiveness of these policies.  (=LACS 29301/39301 = PBPL 37001)

49900   INDIVIDUAL RESEARCH: 
For Required Research Paper:  to be arranged between individual faculty and students – see Time Schedule for faculty Section Numbers.