WINTER 2000
This information effective for Winter 2000.
Check with instructor the first day of class for any changes.
[ECON-113-01] [ECON-142-01] [ECON-152-01] [ECON-180-01]
Professor: Lori Kletzer
Winter 2000
MWF 9:30-10:40am
204 Social Sciences I
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 statistical and econometric methods to real-world economic problems. Weekly problem sets will be an important component of the course. Through these problem sets, I will introduce you to the STATA statistics and econometrics software package. No prior knowledge of computer programming is required.
The main textbook for the course is Statistics for Business and Economics, by D.R. Anderson, D.J. Sweeney, and T.A. Williams, (Cincinnati: South-Western College Publishing, 1999), seventh edition.
Statistics with STATA 5, by Lawrence C. Hamilton (Duxbury Press, 1998), will help you bridge the gap between textbook statistics and practical problem-solving. This book demonstrates how to use STATA for data management and statistical analysis.
Both books will be available at the Bay Tree Bookstore and at Slug Books Co-op. Slug Books is a student/alumni-run co-op discount textbook store, and it is located at 224 Cardiff Place, by 7-11 and Bay Federal Credit Union, two blocks from the base of campus. For more information, contact Slug Books at 469-SLUG, info@slugbooks.com, or http://www.slugbooks.com.
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:
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.
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. (For Fall 1999, the site is disabled, but it will be ready by the start of Winter 2000 classes.) The address is:
http://wwwcatsic.ucsc.edu/~econ113
If you are feeling shaky about your basic computer skills, there is a self-paced online computer literacy course that you can try at any of the CATS Instructional Computing Labs. You will find the course at:
http://nettrail.ucsc.edu/nettrail/master
I encourage you to complete the assigned readings before the class for which they are assigned. The readings in Hamilton are computer interactive statistical exercises and they should be done at the Social Sciences I Computer Lab. I do not require you to turn in output from these exercises.
Jan. 4 Introduction
Jan. 6, 8 Descriptive Statistics
Jan. 11, 13 Simple Regression: Theory
Jan. 15, 20 Simple Regression: Application
Jan. 22, 25 Multiple Regression
Jan. 27, 29 Probability Theory
Feb. 1 FIRST MIDTERM EXAM
Feb. 3, 5 Random Variables and Probability Distributions
Feb. 8, 10 The Normal and t Distributions
Feb. 12, 16 Inference for the Mean and Variance
Feb. 17 Sampling Theory in Regression: The Linear Model
Feb. 19, 22 Hypothesis Testing
Feb. 24 Estimation and Confidence Intervals
Feb. 26 SECOND MIDTERM EXAM
Mar. 1, 3 Specification Error
Mar. 5, 8 Autocorrelation
Mar. 10 Heteroscedasticity
Multicollinearity
Mar. 12 More Testing and Specification
Limited Dependent Variables
Professor K.Kletzer Department of Economics
Winter 2000 UCSC
This course explores current policy challenges for international economic management and cooperation. We will study recent and ongoing events in the world economy that remain important topics of policy concern nationally and internationally. We will study the globalization of the world economy in historical perspective and discuss the consequences of the internationalization of the world economy for the U.S. and other national economies.
Students enrolling in the course should have completed the core requirements for the Economics, Global Economics or Business and Management Economics majors. The course prerequisites are Economics 100A and 100B, and Economics 113 is strongly recommended. Economics 140 and 141 are not prerequisites for this course, but this course does duplicate either of those courses.
This is a writing intensive course. Each student will complete 5 papers of approximately four pages each. The papers will be assigned every other week. The first four papers will be submitted twice, once in rough draft for comments on writing style and then in revised form for grading by the professor on content. The topics for the papers will be based on the assigned readings. The last topic offers each student the choice of one of four topics on economic reform. No examinations will be given. The last paper will be due before finals week.
0. Introduction, organization and lecture survey of background international economics.
1. Does Trade reduce U.S. Wages?
Richard B. Freeman, "Are Your Wages Set in Beijing?" Journal of Economic Perspectives 9 (Summer 1995), pp.15-32.
George J. Borjas, "The Internationalization of the U.S. Labor Market and the Wage Structure," Economic Policy Review, Federal Reserve Bank of New York (January 1995), pp.3-8.
Robert Z. Lawrence, "U.S. Wage Trends in the 1980s: The Role of International Factors," Economic Policy Review, Federal Reserve Bank of New York (January 1995), pp.18-25.
Jagdish Bhagwati, "Trade and Wages: Choosing Among Alternative Explanations," Economic Policy Review1, Federal Reserve Bank of New York (January 1995), pp.42-47.
2. Does Trade Degrade the Environment?
Jagdish Bhagwati, "Trade and the Environment," The American Enterprise (May/June 1993), pp.43-49.
T.N. Srinivasan, "Environment, Economic Development and International Trade: Some Issues," International Journal of Development Banking 13 (1995), pp.11-22.
Gene Grossman and Alan Krueger, "Economic Growth and the Environment," NBER Working Paper No. 4634 (February 1994).
Annette Baker Fox, "Environment and Trade: The NAFTA Case," Political Science Quarterly 110 (1995), pp.49-68.
William Nordhaus, "Reflections on the Economics of Climate Change," Journal of Economic Perspectives 7 (Fall 1993), pp.11-25.
3. Is the Globalization of International Capital Markets a Repeat of the Past?
International Monetary Fund, "Globalization in Historical Perspective," in World Economic Outlook (Washington, D.C.: May 1997), pp.112-116.
Douglas Irwin, "The United States in a New Global Economy? A Century's Perspective," American Economic Review Papers and Proceedings 86 (May 1996), pp.41-46.
Albert Fishlow, "Lessons from the Past: Capital Markets in the 19th Century and the Interwar Years," International Organization 39 (1985), pp.383-430 only.
Barry Eichengreen, Globalizing Capital (Princeton University Press, 1996), Chapter 4, pp.93-135.
4. Is European Monetary Unification Beneficial or a Folly?
Charles Bean, "Economic and Monetary Union in Europe," Journal of Economic Perspectives 6 (Fall 1992), pp.31-52.
Martin Feldstein, "The Political Economy of European Economic and Monetary Union: Political Sources of an Economic Liability," Journal of Economic Perspectives (Fall 1997), pp.23-42.
5. What Caused the Mexican Financial Crisis?
Jeffrey Sachs, Aaron Tornell and Andres Velasco, "The Collapse of the Mexican Peso: What Have We Learned?" Economic Policy 22 (1996), pp.15-56.
Michael Bordo and Anna J. Schwartz, "Why Clashes Between Internal and External Stability Goals End in Currency Crises," Open Economies Review 7 (suppl. 1, 1996), pp.437-468.
Sebastian Edwards, "The Mexican Peso Crisis: How Much Did We Know? When Did We Know It?" NBER Working Paper no. 6334 (December 1997).
Guillermo Calvo, "Capital Flows and Macroeconomic Management: Tequila Lessons," International Journal of Finance and Economics 1 (1996), pp.207-223.
J. Bradford DeLong, James DeLong and Sherman Robinson, "The Case of Mexico's Rescue: The Peso Package Looks Even Better Now," Foreign Affairs 75 (May/June 1996), pp.8-14.
7. Was the Asian Financial Crisis Different?
Dani Rodrik, "Getting Interventions Right: How South Korea and Taiwan Grew Rich," Economic Policy 20 (1994), pp.53-101.
Chan Huh, "Banking System Developments in the Four Asian Tigers," Economic Letter, Federal Reserve Bank of San Francisco 97-22 (August 8, 1997), pp.1-3.
Ramon Moreno, "Lessons from Thailand," Economic Letter, Federal Reserve Bank of San Francisco 97-33 (November 7, 1997), pp.1-3.
Steven Radelet and Jeffrey Sachs, "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity 1 (1998), pp. 1-74, 88-90.
8. What is the Role of the IMF in Crisis Management?
Stanley Fischer, "The IMF and the Asian Crisis," unpublished manuscript, International Monetary Fund.
James Tobin and Gustav Ranis, "Flawed Fund: The IMF's Misplaced Priorities," New Republic (March 8, 1998), pp.16-17.
Jeffrey Sachs, "Fixing the IMF Remedy," The Banker 148 (February 1998), pp.16-18.
Martin Feldstein, "Refocusing the IMF," Foreign Affairs 77 (March/April 1998), pp.20-33. (Fall 1997), pp.23-42.
9. Choose One of the Following Topics:
(A) Economic Collapse and Reform in Eastern Europe and the Former USSR
R.W. Davies, Soviet Economic Development from Lenin to Krushchev, (Cambridge University Press, 1998), pp. 73-82.
Richard Ericson, "The Classical Soviet-Type Economy: Nature of the System and Implications for Reform," Journal of Economic Perspectives 5 (Fall 1991), pp.11-28.
Stanley Fischer, "Socialist Economy Reform: Lessons of the First Three Years," American Economic Review Papers and Proceedings 83 (May 1993), pp.390-395.
Nicholas Crafts and Christoph Ruhl, "Prospects for Growth in Transition Economies," in Transition Report 1997 (European Bank for Reconstruction and Development 1997), Chapter 6, pp.98-112.
(B) European Unemployment and Integration
Horst Siebert, "German Unification: The Economics of Transition," Economic Policy 13, pp. 287-340.
Horst Siebert, "Labor Market Rigidities at the Root of Unemployment in Europe," Journal of Economic Perspectives (Summer 1997), pp.37-54.
Stephen Nickell, "Unemployment and Labor Market Rigidities: Europe Versus North America," Journal of Economic Perspectives (Summer 1997), pp.55-74.
(C) Latin American Economic Reform
Rosemary Thorp, Progress, Poverty and Exclusion: An Economic History of Latin America in the 20th Century, (Washington, D.C. : Inter-American Development Bank ; Baltimore, Md. : Distributed by Johns Hopkins University Press, 1998), Chapters 7-8, pp.201-274.
Interamerican Development Bank, "Overcoming Volatility in Latin America," in Interamerican Development Bank, Economic and Social Progress in Latin America, 1995 Report, Washington, D.C.: Interamerican Development Bank (1995), pp.189-258.
Intermamerican Development Bank, "Macroeconomic Dynamics Through the Adjustment and Reform Process," and "The Scope and Depth of Structural Reform," in Economic and Social Progress in Latin America, 1996 Report, Washington, D.C.: Interamerican Development Bank (1996), in pp.3-66, 69-90.
(D) Chinese Economic Reform
John McMillan and Barry Naughton, "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy 8 (1992), pp.130-143.
Jeffrey Sachs and Wing Thye Woo, "Structural Factors in the Economic Reforms of China, Eastern Europe, and the Former Soviet Union," Economic Policy 18 (1994), pp.102-145.
Barry Naughton, "What Is Distinctive About China's Economic Transition? State Enterprise Reform and Overall System Transformation," Journal of Comparative Economics 18 (1994), pp.470-490.
Paul Krugman, "The East is in the Red: A Balanced View of China's Trade," Slate (17 July 1998), pp.1-4.
Professor Lori Kletzer
Winter 2000
This course will address a number of contemporary policy issues facing the U.S.: immigration, the "new" welfare, managed health care, income inequality, the future course of Social Security, and affirmative action. Within each topic, our discussions will spell out the major questions under debate, explain the economic aspects involved in policymaking, and provide an analysis of alternative policy proposals or approaches. An important focal point throughout the course will be the questions, "what can government do?; what can't government do; and what should government do?"
Economics 1 and 2 are prerequisites for the course; Economics 100A is strongly recommended.
There will be a midterm exam, a series of short papers, and a substantive (12- 15 pages) term paper.
All items on the reading list are required. M indicates the reading is available on reserve at McHenry Library; R indicates that the reading is including in the class reader.
H.J. Aaron (ed.). Setting Domestic Priorities. The Brookings
Institution, 1994, Chapter 1.
(R) Isabel V. Sawhill, "The Economist vs. Madmen in Authority,"
Journal of Economic Perspectives, Summer 1995, 3-13.
(M) G.J. Borjas, Friends or Strangers: The Impact of Immigrants on
the U.S. Economy, Chapters 1 and 2.
(R) "Congress Plans Stiff New Curb on Immigration, The New York
Times, September 25, 1995.
(R) "The Americanization Ideal," Barbara Jordan, The New York Times,
September 11, 1995.
(R) "What Immigration Crisis," The New York Times, January 7,
1996.
(R) K.F. Butcher and D. Card, "Immigration and Wages: Evidence from
the 1980s," American Economic Review, May 1991, 292-296.
H.J. Aaron, "Health Care Financing," Setting Domestic Priorities.
The Brookings Institution, 1994, Chapter 2.
(R) Economic Report of the President, Chapter 4.
(R) D. M. Cutler, "A Guide to Health Care Reform," Journal of
Economic Perspectives, 8 (3), Summer 1994, 13-29.
(R) H.J. Aaron, "Issues Every Plan to Reform Health Care Financing
Must Confront," Journal of Economic Perspectives, 8 (3), Summer 1994,
31-43.
(R) R. Zeckhauser, "Public Finance Principles and National Health
Care Reform," Journal of Economic Perspectives, 8 (3), Summer 1994,
55-60.
(R) "Justices, 5 to 4, Casts Doubts on U.S. Programs That Give
Preferences Based on Race," The New York Times, June 13, 1995.
(R) "Taking Affirmative Action Apart," The New York Times, 1995.
(R) "Efforts to End Job Preferences Are Faltering, The New York
Times, November 20, 1995.
(R) "Veto Threat On Bill to Ban Hiring Rules, The New York Times,
December 8, 1995.
(R) Jonathan S. Leonard, "The Impact of Affirmative Action Regulation
and Equal Employment Law on Black Employment," Journal of Economic
Perspectives, Fall 1990, 47-63.
(R) U.S. Bureau of the Census, "Census Bureau Releases Information
on Income, Poverty, and Health Insurance in 1998,"
(R) Sheldon Danziger and Daniel H. Weinberg, "The Historical Record:
Trends in Family Income, Inequality, and Poverty," from Confronting
Poverty, Sheldon Danziger, Gary Sandefur and Daniel H. Weinberg,
eds., Cambridge: Harvard University Press, 1994.
(R) "Welfare's Children," The Economist,
(R) "Welfare Reform in America: You say you want a revolution," The
Economist,
(R) "Family Struggles to Make Do After Fall From Middle Class," The
New York Times,
(R) "Job Security Hinges on Skills, Not on an Employer for Life," The
New York Times
(R) "Generational Push Has Not Come to Shove," The New York
Times
(R) "Entitlements," Federal Reserve Bank of Cleveland, February
1995.
(R) Economic Report of the President 1995, parts of chapter 1.
(R) "Social Security - An Overview," chapter 2 in A. H. Robertson,
Social Security: What Every Taxpayer Should Know, Washington:
Retirement Policy Institute, 1992, pp. 13-26.
(R) "Costs of an Aging Population: Implications for Current Budget
Policy," Henry J. Aaron, pages 51-61 in Social Security and the
Budget, edited by Henry J. Aaron, Washington: University Press of
America, 1990.
Instructor: David Kaun
Email: nuclear@cats.ucsc.edu
Econ 180 is the department's core upper division course in Labor Economics. The syllabus from last year's course is available at:
http://econ.ucsc.edu/~nuclear/econ180/econ180.html
This year's course will be quite similar.