University of Southern California

Dornsife College of Letters, Arts and Sciences

Economics

Courses of Instruction

Economics (ECON)

The terms indicated are expected but are not guaranteed. For the courses offered during any given term, consult the Schedule of Classes.

ECON 203 Principles of Microeconomics (4, FaSp) Behavior of firms and consumers, functions of the price system, competition and monopoly, labor markets, poverty, government regulation, international trade, and the environment.

ECON 205 Principles of Macroeconomics (4, FaSp) Unemployment, inflation and output determination and links. Effects of government taxation and spending on growth, investment, saving, consumption, and trade.

ECON 238xg Political Economy and Social Issues (4, Fa) Contending politico-economic perspectives in modern Western thought: conservatism, liberalism, radicalism, and their relevance for contemporary policy issues including government and markets, class, race, gender, poverty and inequality. Not available for major credit to economics majors.

ECON 303 Intermediate Microeconomic Theory (4, FaSp) Decision-making by business firms, consumer preferences and behavior, uncertainty, competition, monopoly, labor and resource markets, efficient resource allocation, externalities, and government policy. Prerequisite: ECON 203; MATH 118x or MATH 125; corequisite: ECON 205.

ECON 305 Intermediate Macroeconomic Theory (4, FaSp) The determinants of aggregate income, employment, and inflation; economic fluctuations; fiscal and monetary policy; financial markets; the national debt. Prerequisite: ECON 203 and ECON 205; MATH 118x or MATH 125.

ECON 317 Introduction to Statistics for Economists (4, FaSp) Introduction to statistical methods appropriate for analyzing economic data: probability theory, random variables and probability distributions, sampling, estimation, statistical inference. Prerequisite: MATH 118x or MATH 125.

ECON 318 Introduction to Econometrics (4, FaSp) Application of statistical methods to economic data: estimating economic relationships using regression analysis, testing hypotheses involving economic behavior, forecasting economic variables. Prerequisite: ECON 317. (Duplicates credit in former ECON 414.)

ECON 322 Economic History and Modernization of the Middle East (4, Irregular) Economic history of the Middle East from the rise of Islam to the modern era. Roles of law, religion. Processes of institutional transformation, stagnation, modernization. Prerequisite: ECON 203.

ECON 330 The Political Economy of Institutions (4) Social functions served by the rules, laws, regulations, and customs that constrain human activity. Processes whereby such institutions adapt, or fail to adapt, to changing circumstances. Prerequisite: ECON 203.

ECON 332 Contracts, Organizations and Institutions (4) Contract law and economic organization, determinants of firm boundaries, transaction cost economics, agency theory, incomplete contracting, business strategy, bureaucracy, institutional environment, politics and property rights. Prerequisite: ECON 203.

ECON 338 Political Economy and Social Issues (4, Sp) Contending politico-economic perspectives in modern Western thought and culture; absolutist, liberal, democratic, Marxist, anarchist, and other traditions, topics and issues. (Duplicates credit in former ECON 121x.) Prerequisite: ECON 205.

ECON 340 Economics of Less Developed Countries (4) Causes of economic underdevelopment: historical, institutional, structural, ideological, technological, cultural. Patterns and theories of development. Role of government, international trade, and education in economic growth. Prerequisite: ECON 203 or ECON 205.

ECON 342 Economic Development of the Middle East (4, FaSp) Contemporary economic problems of the Middle East: comparative and historical perspectives on issues of institutions, investment, oil, trade, migration, finance, inequality, labor and capital markets. Prerequisite: ECON 203; recommended preparation: ECON 205 and ECON 303.

ECON 343 Economic Development of East Asia (4) Contemporary economic problems of East Asian countries: management, labor, technology, trade, investment. Determinants of their high growth rates in the late 20th century. Prerequisite: ECON 203 or ECON 205.

ECON 344 Economic Development of Sub-Saharan Africa (4, FaSpSm) Contemporary economic problems of sub-Saharan African economies: policies and endowments. Focus on issues of poverty, agriculture, health, macroeconomy and political economy. Prerequisite: ECON 203 or ECON 205.

ECON 346 Economics of Transition and Development: China (4, FaSpSm) A focus on the Chinese economy, its reform and transition to a market economy, its relation with East Asian countries and integration into the world economy. Prerequisite: ECON 203 or ECON 205.

ECON 348g Current Problems of the American Economy (4, Fa) A comprehensive investigation of problems stemming from changing composition of the work force, urban decline, new technologies, inequalities, ethnic relations, government deficits. Prospects for continued growth. Prerequisite: ECON 203 or ECON 205.

ECON 350 The World Economy (4, SpSm) International cooperation and conflict in the world economy. Global economic problems of growth and development, trade and finance, migration, economic stability, and the environment. Prerequisite: ECON 203 or ECON 205.

ECON 351x Microeconomics for Business (4, FaSpSm) Development and business applications of: theory of the firm; theory of the consumer; intertemporal decisions; decisions under risk; market failures; industrial and enterprise structure. Not for major credit for: economics, economics/mathematics, social sciences (economics) majors. (Duplicates credit in ECON 203, ECON 251, ECON 303.) Prerequisite: MATH 118 or MATH 125 or MATH 126 or MATH 226.

ECON 352x Macroeconomics for Business (4, FaSpSm) Theoretical development and significance to business and markets of economic growth; inflation; unemployment; monetary and fiscal policy; business cycles; savings and investment; exchange rates. Not for major credit for: economics, economics/mathematics, social sciences (economics) majors. (Duplicates credit in former ECON 252x.) Prerequisite: MATH 118; recommended preparation: introductory economics course, high school math, and algebra.

ECON 357 Money, Credit, and Banking (4) The money, bond, stock, and other financial markets; portfolio choice; determinants of asset prices and interest rates; inflation; interactions between financial markets and government policies. Prerequisite: ECON 203 and ECON 205.

ECON 360 Public Finance (4) Role of the government; income and corporate taxation; direct versus indirect taxation; optimal tax structure; public goods; public sector pricing; public debt and macroeconomic stability. Prerequisite: ECON 203 and ECON 205.

ECON 366 Urban Economics (4) Urban trends and problems, including changing urban form and function, urban public finance, housing, renewal, poverty, race, transportation, and the environment. Prerequisite: ECON 203 and ECON 205.

ECON 390 Special Problems (1–4) Supervised, individual studies. No more than one registration permitted. Enrollment by petition only.

ECON 395 Economic Policy Issues (4) Selected policy dilemmas, including welfare reform, urban renewal, government budget deficits, regulation and deregulation, environmental problems, immigration, and global development. Lectures by leading authorities and weekly discussion sessions. Prerequisite: ECON 203 and ECON 205.

ECON 401 Mathematical Methods in Economics (4, Fa) Introduction to quantitative methods for analyzing economic equilibria; comparative statics and dynamics. Utility theory, consumer behavior, and profit maximization. Model formulation in micro and macroeconomics. Prerequisite: ECON 303.

ECON 404 Games and Economics (4) Analysis of strategic economic interactions. Topics include bargaining, insurance, patents, voting, environmental depletion, strategic trade, learning, reputation, strikes, corporate takeovers, and the provision of public goods. Prerequisite: ECON 303.

ECON 405 Neuroeconomics (4) Introduction to the methodology used in experimental neuroeconomics and discussion of neural correlates of decision-making. Prerequisite: ECON 303.

ECON 415 Behavioral Economics (4) Examination of the traditional and behavioral theories of decision-making and the state of the art in the field. Prerequisite: ECON 303.

ECON 419 Advanced Econometrics (4, FaSpSm) Analysis of binary dependent variable models, panel data analysis, program evaluations, IV analysis, basics of time series and forecasting. Prerequisite: ECON 303, ECON 305, ECON 317, ECON 318; MATH 125 or MATH 126 or MATH 225 or MATH 226.

ECON 420 Experimental Economics (4) Examination of economic theories and patterns of behavior useful in building new theories. Prerequisite: ECON 303; recommended preparation: ECON 317.

ECON 432 Economics of Happiness (4) What is happiness? How does it vary by socio-economic status and over the life cycle? This course will develop insight into the nature and determinants of subjective well-being. Prerequisite: ECON 303; recommended preparation: ECON 305.

ECON 433 Empirical Economics Research (4, FaSp) Analysis of economic variables; investigation of empirical economics to estimate or test for relationships using various forms of data. Prerequisite: ECON 303, ECON 305, ECON 317 and ECON 318.

ECON 434 Economic Analysis of Law (4) Common law and property; rationing of justice, resource allocation between prevention and enforcement; division of decision making between public and private sectors. Prerequisite: ECON 303.

ECON 450 International Trade (4) Determinants and economic consequences of international trade patterns; effects of trade restrictions and trading blocs; trade negotiations and arrangements. Prerequisite: ECON 303.

ECON 451 The Politics of International Trade (4) (Enroll in IR 430)

ECON 452 International Finance (4) Consequences of trade deficits; theories of capital and currency markets, exchange rate regimes, and international monetary coordination. Prerequisite: ECON 305.

ECON 457 Financial Markets (4) General equilibrium analysis of economies with financial markets; decision making under uncertainty; methods of risk reduction; portfolio theory and valuation of securities; efficiency of security markets. Prerequisite: ECON 303.

ECON 471 Economics of Labor Markets and Human Capital (4) A human capital interpretation of labor demand and supply; wage determination, differentials, and discrimination; job turnover and occupational mobility; unions and collective bargaining. Prerequisite: ECON 303.

ECON 472 Economics of Medical Care (4) Health as an investment in human capital; analysis of the demand for and supply of health services and manpower; health insurance; cost-effectiveness analysis; market structures and the pricing of medical services. Prerequisite: ECON 303.

ECON 480 Economics of Industrial Organization (4) Pricing and resource allocation in imperfectly competitive markets; monopoly regulation, collusion, cartels, mergers and antitrust; patents and development incentives; industry case studies. Prerequisite: ECON 303.

ECON 487 Resource and Environmental Economics (4) Management and extraction of renewable and non-renewable natural resources; environmental externalities and regulation of air, water, and land pollution; market incentives versus direct regulation. Prerequisite: ECON 303.

ECON 490x Directed Research (1–8, max 12, FaSpSm) Supervised individual research. Not available for graduate credit.

ECON 495 Honors Thesis (4) Individual research supervised by a faculty adviser. Successful completion required for departmental honors degree.

ECON 499 Special Topics (2–4, max 8, FaSpSm) Selected topics in economic theory, history, or policy.

ECON 500 Microeconomic Analysis and Policy (4, Fa) Theories of the household and the firm; product and factor markets; perfect and imperfect competition; welfare criteria. Prerequisite: ECON 303 and ECON 305; corequisite: ECON 401.

ECON 501 Macroeconomic Analysis and Policy (4, Sp) Theories of aggregate economic activity; design and use of macroeconometric models; stabilization and control of inflation, unemployment, and growth. Prerequisite: ECON 303, ECON 305, and ECON 401.

ECON 502 Mathematical Methods in Dynamic Economics (4, SpSm) Movement of economic systems over time; differential and difference equations; introduction to the optimal control of economic processes; dynamic programming and optimal strategies; selected applications. Prerequisite: ECON 401.

ECON 513 Practice of Econometrics (4) Application of econometric tools using standard econometric software packages for microcomputers; empirical applications to selected economic problems of estimation and inference. Prerequisite: ECON 401.

ECON 523 Economic History and Development (4) Historical trends in developed and developing societies in various aspects of modernization such as human resources, capital, technology, resource allocation, income distribution, international relations. Prerequisite: ECON 303.

ECON 527 Classical Economic Theory and Its Critics (4) Classical economic theory; its precursors, main contributors, extensions, and critics; focus upon the writings and ideas of Smith, Say, Malthus, Ricardo, Mill, and Marx. Prerequisite: ECON 303 and ECON 305.

ECON 537 Contracts, Organizations, and Institutions (4) Information, property rights, bargaining, transaction costs, incentives, free-riding and contracting in organizations; the nature of cooperation; bureaucracies. Prerequisite: ECON 303.

ECON 538 Values and Social Analysis (4) Factors that make values an essential feature of human society; how values develop, change, and are abandoned; role of values in economic development. Prerequisite: ECON 303.

ECON 539 Political Economy (4) (Enroll in PEPP 539)

ECON 541 Economic Development (4) Development, underdevelopment and the problems thereof; agriculture, industry, trade, population, human capital, capital formation; structural, technological, environmental and institutional changes; political economy of the state. Prerequisite: ECON 303 and ECON 305.

ECON 580 Antitrust Economics and Competition Policy (4, FaSp) Efficiency, market failure, government regulation, some basics for antitrust economics, competition policy analysis and collusion and agreements among competitors. Prerequisite: ECON 500 or ECON 513.

ECON 590 Directed Research (1–12, FaSpSm) Research leading to the master’s degree. Maximum units which may be applied to the degree to be determined by the department. Graded CR/NC.

ECON 593 Practicum in Teaching the Liberal Arts (2, FaSp) (Enroll in MDA 593)

ECON 594abz Master’s Thesis (2-2-0, FaSpSm) Credit on acceptance of thesis. Graded IP/CR/NC.

ECON 599 Special Topics (2–4, max 8, FaSpSm) Selected topics in economics as developed by the instructor.

ECON 600 Economics of Choice (4) Reviews the normative and positive theories of choice drawing upon recent theoretical and empirical work in cognitive and evolutionary psychology, artificial intelligence, linguistics and economics. Prerequisite: ECON 500.

ECON 601 Microeconomic Theory I (4) Optimization of the consumer and the firm; duality and imputed value; perfect and imperfect competition in product and factor markets. Prerequisite: ECON 401; recommended preparation: ECON 500. (Duplicates credit in former ECON 503.)

ECON 602 Macroeconomic Theory I (4) Aggregate demand, supply and government policy; theories of economic growth and business cycles; static and dynamic implications of government policies. Prerequisite: ECON 401. (Duplicates credit in former ECON 505.)

ECON 603 Microeconomic Theory II (4, Sp) General equilibrium theory; existence, uniqueness, and stability; welfare economics; social choice; dynamic models and uncertainty; special topics. Prerequisite: ECON 601.

ECON 604 Game Theory (4) Strategies and equilibrium concepts; dynamic and repeated games; incomplete information and learning in games. Prerequisite: ECON 601.

ECON 605 Macroeconomic Theory II (4, Sp) Macroeconomic theory based on the concepts of optimal growth and intertemporal equilibrium; overlapping generations models; recent developments in macroeconomic theory. Prerequisite: ECON 601 and ECON 602.

ECON 606 Behavioral Theories of Decision-Making (4) Examination of behavioral theories used to describe and predict choices made in both an individual decision-making setting and strategic environments. Prerequisite: ECON 601.

ECON 607 Topics in Dynamic Optimization (4) Theory and numerical methods for dynamic optimization and control; selected applications in economic analysis and econometrics. Prerequisite: ECON 502 and knowledge of FORTRAN.

ECON 608 Advanced Neuroeconomics (4) Advanced methodology of neuroeconomics including neural activity, memory, value and reward systems, emotions, and risk. Prerequisite: ECON 503.

ECON 609 Econometric Methods (4, FaSp) Review of statistical methods of estimation and inference, linear regression with multicollinearity and serial correlation; multivariate regression and simultaneous equations. Prerequisite: ECON 601. (Duplicates credit in former ECON 511.)

ECON 610 Quantitative Analysis in Macroeconomics (4, Sp) Dynamic economics, applied general equilibrium models, computational and calibration tools, discrete-state dynamic programming, log-linearization of Euler equations. Prerequisite: ECON 602, ECON 605.

ECON 611 Probability and Statistics for Economists (4, FaSp) Introduction to probability theory and statistical inference to prepare students for graduate courses in econometrics and economic theory; probability, random variables, distributions, estimation, testing, asymptotics. Prerequisite: MATH 226. (Duplicates credit in former ECON 514.)

ECON 612 Econometric Theory (4) Inference and prediction, generalized and restricted least squares, specification analysis, multivariate and seemingly unrelated regressions, simultaneous equations techniques, dynamic models, instrumental variable estimation. Prerequisite: ECON 609.

ECON 613 Economic and Financial Time Series I (4, Fa) Simultaneous equation models, dynamic structural econometric models, vector autoregressions, causality, forecasting, univariate and multivariate nonstationary time series, tests for unit roots, cointegration, autoregressive conditional heteroscedasticity models, time series models with changes in regime. Prerequisite: ECON 609.

ECON 614 Economic and Financial Time Series II (4, Sp) Stock returns, predictability and volatility, random walk and variance-bounds tests, estimation of capital asset, multifactor, and derivative pricing models, term structure of interest rates. Prerequisite: ECON 604.

ECON 615 Applied Econometrics (4, Fa) Use of quantitative models to describe and forecast economic activity; estimation and application of such models to selected policy problems. Prerequisite: ECON 609.

ECON 616 Experimental Economics (4) Laboratory methods for testing economic theory; experimental comparison of alternative market and non-market institutions; identification of behavioral responses to alternative regulations. Prerequisite: ECON 500, ECON 601.

ECON 620abL Experimental Methods (2-2) a: Experimental methods of and design of computer-based experiments. Use of standard software for data collection in individual decision-making experiments and games. b: Experimental methods relying on non-choice data. Design methods of experiments that record information in decision-making and physiological data of emotions. Prerequisite: ECON 601; recommended preparation: ECON 616. Graded CR/NC.

ECON 633 Law and Economics (4, Sp) (Enroll in LAW 633)

ECON 634 Political Economy of Institutions (4) The functions of laws, rules, customs, conventions, and other restrictions on economic and social activity. Theories of institutional evolution. (Duplicates credit in former ECON 534.) Prerequisite: ECON 500 or ECON 601.

ECON 639 Contemporary Economic Policy: Theory and Practice (4) History and analysis of the fundamental continuing policy issues: recession, inflation, public debt, regulation, international competition, energy resources and environmental issues, welfare and income distribution. Prerequisite: ECON 500 and ECON 501.

ECON 641 Empirical Analysis of Economic Development (4, FaSp) Theory and empirics of the sources of and barriers to economic development and the micro underpinnings of macroeconomic dynamics of growth, inequality, and productivity. Prerequisite: ECON 601, ECON 609.

ECON 642 Poverty, Human Resources and Economic Development (4, FaSpSm) Household production models and intra-household models of behavior and their empirical implementation, focus on poverty, human resource investments and their interaction with public policies. Prerequisite: ECON 501, ECON 609.

ECON 644 Economic Development Programming and Policy Planning (4) Model construction and application to policy and planning: open economy macroeconomics, trade and investment, institutions, technology, income inequality, environment, policy reforms, political economy. Prerequisite: ECON 501 or ECON 602; ECON 500 or ECON 601.

ECON 645 Economic Growth (4, Fa) Surveys theoretical and empirical developments in growth macroeconomics. To equip students to undertake frontier research and policy work to reduce global income inequality. Open only to graduate students. Prerequisite: ECON 602.

ECON 650 International Trade Theory (4) General equilibrium theory applied to theory and practice of commercial policy, economic growth, and trade. Prerequisite: ECON 500 or ECON 601.

ECON 651 International Monetary Theory (4) Balance of payments concepts and measures; price theory and the foreign exchange market; international monetary systems; adjustment mechanisms; speculation and official intervention. Prerequisite: ECON 500 or ECON 503 and ECON 501 or ECON 505.

ECON 652 Economics of Financial Markets II (4, Sp) Financial market equilibrium and partial equilibrium asset pricing in discrete and continuous time; properties of equilibria with and without complete markets; theory of option prices; Black-Scholes pricing formula; term structure of interest rates; hedging strategies and managing market risk using options, futures and swaps; hedging exchange-rates risks. (Duplicates credit in former ECON 700.) Prerequisite: ECON 601.

ECON 653 Empirical International Economics (4) Empirical treatment of advanced topics in international finance including the determination of real and nominal exchange rates; stabilization policies in developing currencies and currency crisis models. Econometric methods in analyzing foreign exchange data and in forecasting. Prerequisite: ECON 501, ECON 513; recommended preparation: ECON 625, ECON 651.

ECON 659 Economics of Financial Markets I (4, Fa) Equilibrium model of finance economy; absence of arbitrage; complete and incomplete markets; asset pricing theory; representative agent pricing. Capital Asset Pricing Model, martingale property of security prices. Prerequisite: ECON 601.

ECON 671 Economics of Labor and Human Capital (4) A human capital interpretation of labor demand and supply; wage determination, differentials, and discrimination; job turnover and occupational mobility; unions and collective bargaining. Prerequisite: ECON 500 or ECON 601.

ECON 673 Program Evaluation (4) This course first proposes various means of evaluating an economic program. It then applies the tools to specific problems. Prerequisite: ECON 500 or ECON 601; ECON 609.

ECON 680 Industrial Organization (4) Decision making, economic behavior and organization in firms; types of competition and market structure; property rights, nonprofit decision making. Prerequisite: ECON 500 or ECON 601.

ECON 681 Economics of Regulated Industries (4) Theories and methods of government regulation; effects of regulation on various industries; behavior of regulatory agencies. Prerequisite: ECON 500 or ECON 601.

ECON 688 Empirical Industrial Organization (4) Econometric analysis of industrial organization issues including industry regulation and deregulation, collusions and pricing in differentiated oligopolistic markets, entry and exit, auction mechanisms, contractual relationships. Recommended preparation: ECON 600, ECON 603, ECON 612, ECON 615, ECON 680. Prerequisite: ECON 601, ECON 603.

ECON 690 Seminar in Economic Theory (2, max 8, FaSp) Current research in economic theory presented by faculty, students and outside scholars. Graded CR/NC.

ECON 691 Seminar in Econometrics (2, max 8, FaSp) Current research in econometrics presented by faculty, students and outside scholars. Graded CR/NC.

ECON 692 Seminar in Economic Development (2, max 8, FaSp) Current research in international, regional, and urban development economics presented by faculty, students and outside scholars. Graded CR/NC.

ECON 693 Seminar in Applied Economics and Public Policy (2, max 8, FaSp) Current research in applied microeconomics, macroeconomics and public policy presented by faculty, students and outside scholars. Graded CR/NC.

ECON 694 Seminar in Dynamic Economics (2, max 8, FaSp) Topics in dynamic economics involving business fluctuations, economic growth and development, micro-economic adjustments and market mechanisms; related quantitative and qualitative methods; empirical research involving economic change. Graded CR/NC.

ECON 695 Internship in Mathematical Finance (4, Sm) Internship for students in the Mathematical Finance master’s program. Practical training in real market environments. Real-world first-hand experience in implementing trading strategies. Application of mathematical finance to real financial markets.

ECON 696 Empirical Microeconomics Seminar (2, max 8, FaSp) Presentations on current research in empirical microeconomics by outstanding scholars from leading economics departments and faculty at USC. Open only to economics Ph.D. students.

ECON 715 Advanced Topics in Econometrics (4) Time-series methods; aggregation; structural models and methods such as factor analysis and multiple indicator models; various special topics. Prerequisite: ECON 612 and ECON 613.

ECON 790 Research (1–12, FaSpSm) Research leading to the doctorate. Maximum units which may be applied to the degree to be determined by the department. Graded CR/NC.

ECON 794abcdz Doctoral Dissertation (2-2-2-2-0, FaSpSm) Credit on acceptance of dissertation. Graded IP/CR/NC.