Syllabus

Title
1892 Foundations of Economics (MSc Economics)
Instructors
ao.Univ.Prof. Dr. Christian Bellak, Univ.Prof. Dr.Dr. Ingrid Kubin, ao.Univ.Prof. Dr. Josef Leydold
Type
PI
Weekly hours
6
Language of instruction
Englisch
Registration
09/09/19 to 09/26/19
Registration via LPIS
Notes to the course
Subject(s) Master Programs
Dates
Day Date Time Room
Tuesday 10/01/19 03:30 PM - 06:00 PM TC.2.02
Monday 10/07/19 08:00 AM - 10:30 AM TC.2.02
Monday 10/07/19 01:00 PM - 03:30 PM TC.2.02
Tuesday 10/08/19 08:00 AM - 10:30 AM TC.2.02
Tuesday 10/08/19 01:00 PM - 03:30 PM TC.2.02
Wednesday 10/09/19 08:00 AM - 10:30 AM TC.2.02
Wednesday 10/09/19 01:00 PM - 03:30 PM TC.2.02
Thursday 10/10/19 01:00 PM - 03:30 PM TC.2.02
Friday 10/11/19 08:00 AM - 10:30 AM TC.2.02
Monday 10/14/19 08:00 AM - 10:30 AM TC.2.02
Monday 10/14/19 01:00 PM - 03:30 PM TC.2.02
Tuesday 10/15/19 08:00 AM - 10:30 AM TC.2.02
Tuesday 10/15/19 01:00 PM - 03:30 PM TC.2.02
Wednesday 10/16/19 08:00 AM - 10:30 AM TC.2.02
Wednesday 10/16/19 01:00 PM - 03:30 PM TC.2.02
Thursday 10/17/19 08:00 AM - 10:30 AM TC.2.02
Thursday 10/17/19 01:00 PM - 03:30 PM TC.2.02
Monday 10/21/19 08:00 AM - 10:30 AM TC.2.02
Monday 10/21/19 01:00 PM - 03:30 PM TC.2.02
Tuesday 10/22/19 08:00 AM - 10:30 AM TC.2.02
Tuesday 10/22/19 01:00 PM - 03:30 PM TC.2.02
Wednesday 10/23/19 08:00 AM - 10:30 AM TC.2.02
Wednesday 10/23/19 01:00 PM - 03:30 PM TC.2.02
Thursday 10/24/19 08:00 AM - 10:30 AM TC.2.02
Thursday 10/24/19 01:00 PM - 03:30 PM TC.2.02
Monday 10/28/19 01:00 PM - 03:30 PM TC.2.02
Tuesday 10/29/19 08:00 AM - 10:30 AM TC.2.02
Tuesday 10/29/19 01:00 PM - 03:30 PM TC.2.02
Wednesday 10/30/19 08:00 AM - 10:30 AM TC.2.02
Wednesday 10/30/19 01:00 PM - 03:30 PM TC.2.02
Thursday 10/31/19 08:00 AM - 10:30 AM TC.2.02
Thursday 10/31/19 01:00 PM - 03:30 PM TC.2.02
Wednesday 11/06/19 11:00 AM - 01:30 PM TC.0.04
Friday 11/08/19 01:00 PM - 03:00 PM TC.2.02
Tuesday 11/12/19 01:00 PM - 03:30 PM TC.0.01 ERSTE
Monday 11/18/19 08:00 AM - 10:30 AM TC.0.01 ERSTE
Tuesday 11/19/19 01:00 PM - 03:30 PM TC.2.02
Monday 12/02/19 01:00 PM - 03:30 PM TC.0.01 ERSTE
Contents

A) Microeconomics (Bellak)

The microeconomics part introduces some key approaches that economists use to analyze and understand the behavior of consumers and firms from a theoretical perspective.

Methods: models with a mathematical structure

Theory: basics in neoclassical economics (market failure, imperfect competition, dual problem in production and in consumer theory, welfare theory)

B) Macroeconomics (Kubin)

The macroeocnomics part introduces core models of New Keynesian macroeocomics, with particular emphasis on its analytic structure.

C) Mathematical Methods (Leydold)

Matrix algebra, determinants, calculus of univariate and multivariate functions, static optimization, dynamic systems.

Learning outcomes

A) Microeconomics (Bellak)

• Participants gain or deepen their knowledge in microeconomics, understood essentially as a science of choice.

• Participants understand microeconomics as a way of looking at the world, rather than a collection of unrelated models.

• Participants know how to analyse consumer and production decisions in neoclassical economics (assertions, assumptions, methods, model outcomes under certainty and uncertainty).

• Participants are able to analyse individual decisions as well as - to a limited extent - interactive decisions of firms and consumers and the respective methods. (stationary vs. non-stationary environment)

• To a limited extent, participants gain knowledge about the relation of the neoclassical approach as well as to alternative approaches (behavioral economics in particular).

• The importance of market structure for individual decision making is recognized by the participants.

• The knowledge gained should enable the participants to study and critically evaluate contemporary microeconomic models and theories.

 

B) Macroeconomics (Kubin)

Upon completion of the macroeconomics part of this course, students are able

• to explain and analyse macroeconomic models (in the New-Keynesian Tradition) with imperfectly competitive goods markets;

• to provide an overview of various possibilities to include imperfectly competitive labour markets in macroeconomic models;

• to explain and analyse one central macroeconomic model with imperfectly competitive goods and labour markets;

• to provide an overview of the role of money and money supply in macroeconomics models;

• to evaluate strengths and weaknesses of the above mentioned models (including their fit with empirical evidence);

• to derive and evaluate policy implications;

• to review contributions in journals of general interest (e.g. the Journal of Economic Perspectives; the Journal of Economic Literature) as well as core macroeconomics journals (e.g. the Journal of Macroeeconomics).

C) Mathematical Methods (Leydold)

Participants gain or deepen their knowledge of mathematical methods that are obligatory to the understanding of economic literature. They are able to understand and apply the formal methods required in microeconomics and macroeconomics.

These includes

• linear algebra (matrix algebra, determinants, Cramer's rule, vector space, eigenvalues)

• calculus (derivatives and integrals, implicit and inverse function theorem, Taylor series, Hessian matrix, big Oh notation)

• static optimization (convex and quasi-convex functions, stationary points, extrema, Lagrange multiplicator, Kuhn-Tucker condition, envelope theorem)

• linear systems (first order linear difference equation,  cobweb diagram, first order differential equations, stability of solutions)

Attendance requirements

Attendance is mandatory.

Teaching/learning method(s)

Economic theories and models (as well as their mathematical structure) will be presented and explained by the lecturers.

Participants should prepare by studying the respective chapters for each meeting (see section Unit details below) as well as by submitting solutions to homework examples, if any.

Feedback on selected homework examples will be provided by the lecturers.

Assessment

- Three final exams (micro, macro and mathematics)

- Each exam contributes a maximum of 100 points.

- Hence, the maximum number of points in total is 300.

- A limited number of points (up to 15 in each field) of the final exam may be acquired from homework examples.

In order to pass the exam,

- in each of the three final exams, a minimum of 40% (including a maximum of 15 homework points)

AND

- a minimum of 150 points in total

needs to be achieved.

More details will be presented in the first session and will be uploaded thereafter.

 

 

 

 

Readings
1 Author: Heijdra, Ben J.
Title:

Foundations of modern macroeconomics


Publisher: Oxford University Press
Edition: 3
Remarks: earlier editions are suitable as well; note that his book is available also as E-Book in the WU library
Year: 2017
Content relevant for class examination: Yes
Recommendation: Essential reading for all students
Type: Book
2 Author: Snyder, Christopher and Walter Nicholson
Title:

(12th ed.) Microeconomic Theory: Basic Principles and Extensions, International Edition.


Publisher: South Western Cengage
Edition: (12th ed.)
Remarks: a limited number of books is available in the library; a limited number of books is kept in the "Lehrbuchsammlung" of the library.
Year: 2017
Content relevant for class examination: Yes
Content relevant for diploma examination: No
Recommendation: Essential reading for all students
Type: Book
Recommended previous knowledge and skills

A) Microeconomics: Theory: Knowledge at the level of basic textbooks (e.g. Pindyck - Rubinfeld: Microeconomics) in consumer theory, production theory and market structure. Methodology: optimization; basics in mathematical economics.

B) Macroeconomics:

1. Solid knowledge and routine handling of intermediate macroeconomics at the level of basic text books (keywords: IS-LM model and its extension to a model with aggregate supply and aggregate demand; bibliographical reference e.g. Blanchard: Macroeconomics, 7th edition, Pearson, chapters 1-9)

2. Routine handling of basic microeconomic concepts (keywords: household optimum and the derivation of consumption demand and labour supply derivation; properties of Cobb-Douglas utility or production functions, monopoly price formation)

C) Mathematical Methods: Basic concepts and techniques as discussed in the "Brigding Course Mathematics". These include handling and transformation of terms, equalities and inequalties, functions ans maps, drawing and interpretation of function graphs, derivatives and integration, matrix algebra.

Please, see Information about prior knowledge at https://www.wu.ac.at/studium/master/masters-program-economics/structure-content/.

 

 

 

Availability of lecturer(s)

Office hours:

Bellak: flexible; arrange a meeting on short notice via email bellak@wu.ac.at

Kubin: flexible; after the course meetings, or arrange a meeting on short notice via email ingrid.kubin@wu.ac.at,

Leydold: josef.leydold@wu.ac.at

Unit details
Unit Date Contents
1 9.10.

1 Housekeeping Session / Economic Models / Rationality Axioms vs. Behavioral Economics

2 11.10.

2 Mathematical Concepts and Terms

3 15.10.

3 Consumer Theory / Duality

4 16.10.

4 Income and Substitution Effects / Demand Curves and Demand Functions

5 17.10.

5 Uncertainty

6 22.10.

6 Production functions

7 23.10.

7 Cost functions / Duality in production / Profit maximization

8 24.10.

8 Game Theory (wrt production decisions)

9 29.10.

9 Imperfect Competition: Monopoly and Price discrimination

10 30.10.

10 Imperfect Competition: Oligopoly

11 31.10.

Q/A session

12 6.11.

Final exam Microeconomics

13 2.12.

First re-take exam for micro, macro and mathematics

Last edited: 2019-08-30



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