Economics - Fall 1998

• Hayek, F.A. The Road to Serfdom
• Heilbroner, R. The Essential Adam Smith
• Hirschman, A. Rhetoric of Reaction
• Hirschman, A. The Passions and the Interests
• Kaun, D. E. RU$$IA (a novel)
• Marx, K. Capital Vol.I
• Olson, M. The Rise and Decline of Nations
• journal articles ECON 80/189 READER

CLASS MEETINGS NOTE: All articles below in reader

3 Introduction

• Classical Economics
• The Essential Adam Smith (pp. 149-320)
• articles by Wills and Himmelfarb in Reader

3 Basic Marx, Capital (Ch 1 [1,2,4], 32

• The Labor Process, Capital (Ch 7, 8, 9, skim 10, 14, 15)
• The Accumulation Process, Capital (Ch 24 [1,2], 25 [1-4], skim 23
• article by Buchholz in Reader

3 Keynsian Economics, Buchholz, "Keynes..."

• Keynes, "Economic Possibilities for our Grandchildren"
• Hirschman, The Passions and the Intests, and review

1+ Classical Economics, Post WW II, Hayek, The Road to Serfdom and article by Roche in Reader

1+ Marx Today, O'Connor, "Fiscal Crisis of the State"

3 The Liberal Perspective (I)

• Lindblom, "Democracy and the Economy

The L P (II)

• Hirschman, "Rival Views of Market Society"

The L P (III)

• Polanyi, "Our Obsolete Market Mentality"
• Kaun, "The Economists' Theory of Ideology"

1 Adam Smith in the 1990's, Olson, The Rise and Decline of Nations

1 Conservatives and Liberals, Hirschman, The Rhetoric of Reaction and article by Hirschman in Reader

Midterm exams Econ 80A and 189--three short (20-30 minute in-class exams) will cover the basic theoretical concepts in the work of Smith, Marx, and Keynes, as provided in the readings and lecture.

Analytic Review Econ 80A--one critical review (5-10 pages) dealing with any one (or two in comparison if you wish) book covered in the 2nd half of the course. This review is due no later than the last day of class.

Analytic Review Econ 189--same as above except paper should be approximately 15-20) pages, and deal with at least two authors [NOTE: ONE OF THE BOOKS MAY COME FROM BEYOND THE BOOKS DISCUSSED DURING THE SECOND HALF OF THE COURSE: A SHORT LIST OF ADDITIONAL POSSIBILITES WILL BE CIRCULATED EARLY IN THE QUARTER].

Final exam--OPTION ONE: a two hour exam covering lecture and reading material from the second half of the course. Exam will be given on Friday, December 12, from 12:00 till 2:00pm.

"Final exam"--OPTION TWO: Do clearly satisfactory work on the three first half quizzes; maintain "perfect" attendance for the second half of the quarter (no more than one absence); and participate where appropriate in organized class discussion around the major books under consideration.

• Lekachman, Robert, The General Theory....................
• Keynes, J.M., Economic Possibilities for our Grandchildren..............................
• O'connor, James, Fiscal Crisis of the State..............
• Polanyi, Karl, Our Obsolete Market Mentality.............
• Kaun, David, the Economists' Theory of Ideology...........
• Lindblom, Charles, Democracy and the Economy.............
• Hirschman, Albert, Rival Views of Market Society.........

(books listed below are on reserve at McHenry)

Marxist

• James O'Connor The Fiscal Crisis of the State

Moderate Liberal

• Paul Krugman The Age of Diminished Expectations
• Paul Krugman Peddling Prosperity
• Robert Eisner The Misunderstood Economy

More Liberal

• Robert Kutter Everything for Sale
• Charles Lindblom Politics and Markets
• Polyani, Karl The Great Transformation

Conservative

• Charles Murray In Pursuit of Happiness and Good Government
• Charles Murray Losing Ground
• Thomas Sowell A Conflict of Visions
• Milton Friedman Capitalism and Freedom

This course is an introduction to the theory and practice of econometrics, the application of statistical methods to the analysis of economic phenomena. The course focuses on the strengths and weaknesses of the basic econometric techniques used in empirical research. Emphasis will be placed on intuitive understanding rather than on rigorous proofs and derivations. The most important part of this course is learning to apply econometric methods to real-world economic problems. To learn econometrics, you must do econometrics; therefore weekly problem sets will be very important. These problem sets will provide exposure to the LIMDEP econometrics software package, but no prior knowledge of computer programming is required.

COURSE MATERIALS

The textbook for the course is Economic Statistics and Econometrics, by Thad W. Mirer (Englewood Cliffs, NJ: Prentice-Hall, 1995), third edition. The text is available at the Bay Tree Bookstore.

COURSE REQUIREMENTS

This is a class in empirical (data-based) economics. Many of my lecture examples will be motivated by "real world" events, facts, and applications. In that spirit, I encourage you to read a daily newspaper on a regular basis. I will also make reference to a number of the concepts and theories you learned in Economics 100A and 100B.

The class meets three times a week for lectures and once a week for a small conference section lead by a teaching assistant (TA). Everyone must be signed up for one of the conference sections. These sections are an important part of the course because they provide an opportunity to explore and understand topics in a more informal and individual setting.

There will be two midterm exams during the quarter, a comprehensive final exam, and weekly problem sets. Your grade will be determined as follows:

Problem Sets 20%

Hour Tests 40%

Final Exam 40%

GUIDELINES FOR PROBLEM SETS

Econometrics can be mastered only with a great deal of practice. You will have approximately one week to complete each problem set. Problem sets will be distributed in class and copies will also be available on-line. Completed problem sets will be turned in at the start of lecture. Graded problem sets will be returned during the TA sections. Answer keys for the problem sets will be placed on reserve in McHenry Library and online. Late problem sets will not be accepted without the prior consent of the TA. The weekly problem sets give you the practical experience necessary for learning econometrics. Most problem sets will require some computer work, which you should not leave until the last minute. Computer difficulties are not a sufficient excuse for a late submission; such difficulties should be expected and you should allocate adequate time to complete the exercises.

To minimize frustration and wasted time, you are encouraged to work together or ask our TA or me whenever you are repeatedly getting no output or nonsensical output from the computer. If you do some of the preliminary work in groups, be sure that each member of the group learns how to obtain the results, not just the group leader. You must write up the answers on your own, although you may discuss with others possible interpretations of the results.

OTHER IMPORTANT POINTS

Attending lecture is important. I doubt whether you can really learn this material on your own. One of the many benefits of attendance is that I will try to involve you directly in the class as much as possible, within the constraints of a moderately-sized lecture class. Learning and teaching in this format requires your cooperation. Please be considerate of your fellow students and of me. Do not arrive late, leave early, read the newspaper, or engage in behavior that others may consider rude or disruptive.

You are expected to adhere to standards of academic integrity. You should familiarize yourself with these standards by consulting The Navigator. Violations of academic integrity standards will be dealt with in accordance with University policy.

Economics 113 On-line

Information about this class is available on-line. I have created a course web site, where you can find the course syllabus, problem sets, answer keys, sample exams, and links to data sources. The address is:

http://wwwcatsic.ucsc.edu/~econ113

COURSE OUTLINE

I encourage you to complete the assigned readings before the class for which they are assigned.

Sept. 26 Introduction

Mirer, chapters 1 and 2

Sept. 29, Oct. 1 Descriptive Statistics

Mirer, chapters 3 and 4

Oct. 3, 6 Simple Regression: Theory

Mirer, chapter 5

Oct. 8, 10 Simple Regression: Application

Mirer, chapter 6

Oct. 13, 15 Multiple Regression

Mirer, chapter 7

Oct. 17, 20 Probability Theory

Mirer, chapter 8

Oct. 22 FIRST MIDTERM EXAM

Oct. 24, 27 Random Variables and Probability Distributions

Mirer, chapter 9

Oct. 29, 31 The Normal and t Distributions

Mirer, chapter 10

Nov. 3, 5 Inference for the Mean and Variance

Mirer, chapter 18

Nov. 7 Sampling Theory in Regression: The Linear Model

Mirer, chapter 11

Nov. 10, 12 Hypothesis Testing

Mirer, chapter 12

Nov. 14, 17 Estimation and Confidence Intervals

Mirer, chapter 13, to pp. 288

Nov. 19 SECOND MIDTERM EXAM

Nov. 21, 24 Specification Error

Mirer, pp. 157-161, 290-29

Nov. 26 Autocorrelation

Mirer, pp. 332-343

Dec. 1 Heteroscedasticity

Multicollinearity

Mirer, pp. 161-163, 288-290, 325-332

Dec. 3, 5 More Testing and Specification

Limited Dependent Variables

Mirer, pp. 303-316

The Fall, 1997 syllabus and assignments below will be essentially the same for this falls course in labor. An important part of the course will be in contrasting the standard (neo-classical) approach to the study of labor economics with more radical methods, including both institutional and Marxist perspectives. The latter make significant contributions to the analysis of discrimination and unions in particular.

• George J. Borjas; Labor Economics (GB)
• Randy Albelda, Drago/Shulman; Unlevel Playing Fields (ADS)
• Working USA, May-June 1997
• Journal Article Reader

Estimated Number of Class Meetings

NOTE: All articles "..." below are in Reader

1 Introduction

GB, Ch 1, and ADS, Ch 6

2 Demand for Labor

GB, Ch 4 (pp. 101-130)

3 Supply of Labor

GB, Ch 2, 3, 4 (pp. 130-151)

2 Labor Market Equilibrium/Noncompetitive Markets

GB, Ch 5 and "Myth and Measurement..."

1 Compensating Wage Differentials

GB, Ch 6

3 Human Capital and Mobility

GB, Ch 7,8,9 and ADS, Ch 7, and "The Effects of Tastes and Motivation..."; "The Labor Market of Immigrants..."

2 Discrimination

GB, Ch 10, and ADS, Ch 8, and "Racial Differences in Professional Basketball..."; "Heterogeneous Human Capital..."; and "Beauty and the Labor Market"

3 Unions

GB, Ch 11; Working USA and "Review Symposium: What Do Unions Do?" and "Where Have All the Union Members Gone?"

1 Unemployment (and other topics)

GB, Ch 13 (and 12)

Mid-term exam: Three short in class exams will be given through the first half of the quarter, announced in advance. These exams will cover material from the text (Labor Economics) up to Chapter 6 and class lectures.

Journal Article Critiques: two short (2-3 page) responses to any two of the empirical articles in the reader. These short papers should provide an outline of the author's basic argument, with your own brief commentary to the extent possible. First of these papers due by the end of the 6th week of the quarter; second by the last day of class.

Final Paper: Using both Unlevel Playing Fields, and Working USA, contrast what you think are the essential differences between the strict neoclassical approach to labor issues as given by Borjas in Labor Economics, and the left/radical alternative to these views. This paper should be about five to eight pages, and is due on the last day of class.

Final Exam:

Option I--Hour and a half exam covering material from second half of the course. This exam will be given on Thursday, December 11, from 4:00 to 5:30 pm.

Option II--"Perfect" attendance during second half of course (meaning missing no more than one class for whatever reason), and doing well on first-half quizes.

Revised 7/19/04.