2004-06 IUPUI Campus Bulletin

Economics

Chair Associate Professor Robert Sandy Professors Subir Chakrabarti
Robert Harris
Peter Rangazas
Martin Spechler
Richard Steinberg Associate Professors Mark Bilodeau
David Bivin
Jonathan Burke
Paul Carlin
Partha Deb
Patrick Rooney
Steven Russell
Robert Sandy
Mark Wilhelm Assistant Professors Gwendolyn Morrison
Una Okonkwo Osili
Anne Royalty
Geoffrey Warner Adjunct Professors Charalambos Aliprantis
Ann Holmes
Frank Kelly Academic Advising: Cavanaugh Hall 516, (317) 274-4756

Economics is the social science in which one studies human behavior in consuming, producing, exchanging, and distributing goods and services. It provides a framework for understanding how decisions of individuals affect the national economy. It helps explain how the economy and how politicians' and government regulators' decisions are affected by their own interests.

Major in Economics

The economics major has the option of pursuing a general track or a quantitative track. The general track provides a firm grounding in economic theory and exposure to problems and techniques the student is likely to encounter in a business, nonprofit, or government agency environment. The quantitative track supplements the general track with extensive training in mathematical and statistical techniques required for graduate course work. This track is also recommended for those students who prefer a more quantitative approach to problem solving. Completion of this track fully prepares the student for entrance into the department's Master of Arts in Economics program at IUPUI as well as graduate programs at other universities. All majors must complete 18 credit hours in economics to include E201, E202, E270, E321, E322, and E406. These courses should be completed by the end of the junior year. Note that E201 is a prerequisite for E202 and E321 and that E202 is a prerequisite for E322. E321 and E322 are prerequisites for E406.

General Track

The general track requires an additional six courses, consisting of the following:
1. two courses (6 credit hours) in mathematics, including finite mathematics and calculus (typically M118 and M119). Additional work in mathematics, computer science, and accounting is recommended.
2. three 300 or 400 level electives from economics. The total number of credit hours is 33 (34 if E335 is taken as an elective).

Quantitative Track

The quantitative track requires an additional six courses (or seven courses, depending on the math sequence) consisting of the following:
1. either
   1. M163 and M164 (10 credit hours), or
   2. M118, M119, and E335 (10 credit hours).
2. E470.
3. one 300or 400 level elective (excluding E335 and E470). The total number of credit hours is 34.

To satisfy the department's residency requirement, at least 12 credit hours of economics must be taken at IUPUI.

A grade of C (2.0) or better must be received in each course required for the major (a C- does not count).

Minor in Economics

A minor in economics is a logical supplement to programs in business, engineering, technology, health services, science, and the social sciences. A knowledge of economic theory, economic institutions, and how economic policy is formed is necessary for students preparing for careers in law, science, government, or any area that uses the scarce resources of our society.

Requirements

The requirements for a minor in economics are as follows:

1. 15 credit hours in economics courses to include E201 and E202 and three 300or 400 level courses. (E270 may be substituted for one of the 300to 400 level courses.)
2. Residency requirements: 9 credit hours of the minor must be completed at IUPUI.
3. Grade requirement: The grade in each course submitted for the minor must be C (2.0) or higher.

Minor in Business

Students are required to meet course prerequisites and entrance requirements, which include completion of the following eight courses or equivalents with a minimum GPA of 2.0 to ensure admission into the business integrative core classes.

BUS A100	Basic Accounting Skills
BUS A201	Introduction to Financial Accounting
BUS A202	Introduction to Managerial Accounting
ECON E201	Introduction to Microeconomics
ECON E202	Introduction to Macroeconomics
ECON E270	Introduction to Statistical Theory in Economics
MATH M118	Finite Mathematics
MATH M119	Brief Survey of Calculus I

In addition, BUS K201 The Computer in Business, or its equivalent, must be completed with a minimum grade of C before starting the integrative core. Business minors are required to take the integrative core, which is 9 credit hours taken together as a single educational unit (BUS F301 Financial Management, M301 Introduction to Marketing Management, P301 Operations Management), and must apply for space in the three core classes. Application periods are January 15 to March 1 for the fall semester and August 15 to October 1 for the spring semester. Applications are available in Business/SPEA Building 3020.

In addition to the 12 required courses listed above, BUS X204 Business Communications (3 cr.), BUS L203 Commercial Law I (3 cr.), and BUS Z302 Managing and Behavior in Organizations (3 cr.) are recommended. As with all courses listed above, the Kelley School of Business will impose essentially the same standards for students minoring in business who are enrolled in the integrative core (BUS F301, M301, and P301) as for business majors.

The above minor requires 15-18 credit hours outside of business and 16-18 credit hours of business courses to make up the 34 credit hours required for the minor. Students are encouraged to seek academic advising from their major department to ensure that program planning is accurate. Descriptions of these business courses can be found in the Kelley School of Business section of this bulletin.

Master of Arts Degree

The Master of Arts program has a two-fold objective:

1. to provide students with analytical capabilities and research skills for careers in business, government, and the nonprofit sector, and
2. to prepare those who wish to pursue the Ph.D. at another university or Indiana University Bloomington

Admission Requirements

Applicants should have completed a bachelor's degree from an accredited institution. Ordinarily, applicants should have a minimum grade point average of 3.0 on a 4.0 scale in their undergraduate course work and in their previous economics courses. Before undertaking graduate study in economics, a student should have knowledge of intermediate-level undergraduate economic theory (E321 and E322), statistics (E270), multivariate differential and integral calculus (the IUPUI equivalents are M163 and M164 offered by the mathematics department or E335 Introduction to Mathematical Methods in Economics with a grade of B or better), and finite mathematics (M118). Students with deficiencies in economics and/or mathematics may be admitted on a conditional basis.

The verbal, quantitative, and analytical portions of the Graduate Record Examination (GRE) are required, and applicants are urged to complete the examination by December of the year before admission.

Three letters of recommendation are required. For students with English as a second language, a minimum TOEFL score of 550 is recommended.

Course Requirements

Students must complete a minimum of 30 credit hours of graduate course work, which may include up to 6 credits of thesis. Twelve credit hours are devoted to the following required core courses: E504 Mathematics for Economists, E521 Theory of Prices and Markets, E522 Theory of Income and Employment, and E570 Fundamentals of Statistics and Econometrics. These core courses serve as prerequisites for some of the 500-level field courses. No more than 9 of the remaining 18 credits may be earned in courses numbered below 500. If a thesis is written, it must be defended. If a thesis is not written, there will be a comprehensive written examination with an oral defense in an area of specialization within economics.

Students have the option of replacing the thesis with reading proficiency in a foreign language or with 6 credit hours of course work in the tool skills of mathematics or computer science. Consult the department's graduate study guide for a list of acceptable research-skill courses. Courses taken to meet the language or tool skill options are not counted toward the 30 credit hours required for the degree.

Grades

The student must receive at least a C (2.0) in each course and must average at least a B (3.0 on a 4.0 scale) for all courses taken.

Undergraduate Courses

Honors Courses

S201 Introduction to Microeconomics: Honors (3 cr.) Designed for students of superior ability. Covers the same core materials as E201.

S202 Introduction to Macroeconomics: Honors (3 cr.) Designed for students of superior ability. Covers the same core materials as E202.

S270 Introduction to Statistical Theory in Economics and Business: Honors (3 cr.) P: Mathematics M118. P or C: Mathematics M119 or M163. Covers the same core materials as E270 but with more involved applications in economics.

Non-Honors Courses

E100 Current Economic Topics (1 cr.) Discussion of socioeconomic issues from applied point of view through investigation and analysis of current topics of interest such as bank regulations, foreign policy, economics of defense, international trade and finance, ethics and economics, economics of crime, and economics of discrimination. Not open to those with previous college-level economics courses.

E101 Survey of Current Economic Issues and Problems (3 cr.) (For nonmajors) Basic economic principles applied to current social issues and problems. Topics covered will typically include inflation, unemployment, wage and price controls, welfare, social security, national debt, health programs, food prices, pollution, crime, mass transit, revenue sharing, multinationals, population, and energy. Not open to those with previous college-level economics courses.

E111-E112 Topics in the Economic History of Western Civilization I-II (3-3 cr.) Selected topics in the economic history of Western civilization, including the growth of the market organization, industrialization, institutional growth and change, imperialism, and labor.

E201 Introduction to Microeconomics (3 cr.) P: sophomore standing. E201 is a general introduction to microeconomic analysis. Discussed are the method of economics, scarcity of resources, the interaction of consumers and businesses in the marketplace in order to determine price, and how the market system places a value on factors of production.

E202 Introduction to Macroeconomics (3 cr.) P: E201. An introduction to macroeconomics that studies the economy as a whole; the levels of output, prices, and employment; how they are measured and how they can be changed; money and banking; international trade; and economic growth.

E270 Introduction to Statistical Theory in Economics (3 cr.) P: MATH M118. Analysis and interpretation of statistical data in business and economics. Discussion of frequency distribution, measures of central tendency and variability, statistical inference, hypothesis testing, correlation, regression, and time series.

E303 Survey of International Economics (3 cr.) P: E201-E202. Survey of international economics. Basis for and effects of international trade, commercial policy and effects of trade restrictions, balance of payments and exchange rate adjustment, international monetary systems, and fixed vs. flexible exchange rates. Students who have taken E430 many not enroll in E303 for credit.

E304 Survey of Labor Economics (3 cr.) P: E201. Economics problems of the wage earner in modern society; structure, policies, and problems of labor organizations; employer and governmental labor relationships.

E305 Money and Banking (3 cr.) P: E201-E202. Money and banking system of the United States, including problems of money and the price level, proper organization and functioning of commercial banking and the Federal Reserve System, monetary standards, and credit control. Recent monetary and banking trends.

E307 Current Economic Issues (3 cr.) P: E201 or permission of instructor. Current economic issues, problems, and research methods. Designed to explore in depth an economic issue currently before the public or to examine a particular aspect of the methodology of economics. Examples would be a study of the economic aspects of discrimination, a study of urban economic policy, or a study of simplified models in economics.

E308 Survey of Public Finance (3 cr.) P: E201-E202. Analysis of government expenditures and revenue sources, taxation and capital formation, public debt and inflation, growth in government spending, and intergovernmental fiscal relations.

E321 Intermediate Microeconomic Theory (3 cr.) P: E201-E202, Mathematics M119. Theory of demand, theory of production, pricing under different market conditions, allocation and pricing of resources, partial and general equilibrium theory, and welfare economics. Analysis of current economic problems and technology changes in firms and industries.

E322 Intermediate Macroeconomic Theory (3 cr.) P: E201-E202. Theory of income, employment, and price level. Study of countercyclical and other public policy measures. National income accounting.

E323 Urban Economics (3 cr.) P: E201-E202. Introduction to basic concepts and techniques of urban economic analysis to facilitate understanding of urban problems, urban growth and structure, poverty, housing, transportation, and public provision of urban services.

E325 Comparative Economic Systems (3 cr.) P: E201-E202. Essential economic theories and features of economic systems, including private enterprise, authoritarian socialism, and liberal socialism.

E326 Applied Research in Urban Economics (3 cr.) P: E201-E202 or permission of instructor. Field research in urban economics. Topics to be selected by students, covering such areas as human resource problems, transportation and housing surveys, demographic shifts, and income distribution issues.

E335 Introduction to Mathematical Methods in Economics (4 cr.) P: E201-E202, Mathematics M118-M119. Introduction to quantitative techniques used in economics, and instruction in the application of these techniques to the analysis of economics problems.

E337 Economic Development (3 cr.) P: E201, E202, and junior standing or consent of instructor. Characteristics of economically underdeveloped countries. Obstacles to sustained growth; planning and other policies for stimulating growth; examination of development problems and experience in particular countries.

E355 Monetary Economics (3 cr.) P: E305 or E322 or equivalents. Supply and demand functions for money in the context of models of the U.S. economy. Formulation of Federal Reserve policy decisions and effects on interest rates, prices, output, and employment. Current problems in monetary policy and theory.

E363 Environmental and Natural Resource Economics (3 cr.) P: E201-E202. Basic theory and policy of such topics as pollution, resource depletion, environmental risk, and resource conservation. Issues covered include limits to growth, quality of life, and the appropriate roles for the private market and federal control. Credit not given for both E363 and E463.

E380 Law and Economics (3 cr.) P: E201 or permission of instructor. The application of economic method to legal institutions and legal issues. Examples would be the optimum use of resources to prevent crime, the economic value of a human life, the economic consequences of regulating business, the economics of property rights, torts and contracts.

E385 Economics of Industry (3 cr.) P: E201 or permission of instructor. A theoretical and empirical analysis of the structure, conduct, and performance of major American industries. Emphasized is the degree of competition in various markets, how markets operate under conditions of competition or monopoly, and competition as a dynamic process over time.

E387 Health Economics (3 cr.) P: E201. This course applies economic theory to the study of policy issues in health economics. Specific issues include: determinants of demand for medical services and insurance; training and pricing behavior of physicians; pricing behavior and costs of hospitals; market and regulative approaches.

E406 Senior Seminar (3 cr.) P: E321 and E322 or permission of instructor. Assessment of the current state of economic knowledge and discussion of how economics is applied to study the problems facing modern society.

E408 Undergraduate Readings in Economics (3 cr. maximum) P: permission of instructor. Individual readings and research.

E410 Selected Topics in U.S. Economic History (3 cr.) P: E201-E202. Analysis of selected topics, including transportation developments, government intervention, systems of property rights, slavery, economic growth, income distribution, economic stability, technical change, and others.

E414 Economics of the Nonprofit Sector (3 cr.) P: E201. The role of nonprofit organizations (universities, churches, hospitals, orchestras, charities, day care, research, nursing homes) in mixed economics. Public policy controversies such as regulation of fundraising, antitrust against universities, ''unfair'' competition with for-profit firms, and the tax treatment of donations.

E420 History of Economic Thought (3 cr.) P: E201-E202. Examination of main theoretical developments since the beginning of the systematic study of economics. Theoretical propositions and structures of the earlier writers will be interpreted and evaluated in terms of modern economic analysis.

E430 Introduction to International Economics (3 cr.) P: E201-E202. Forces determining international trade, finance, and commercial policy under changing world conditions; theory of international trade; structure of world trade; tariff and trade control policies; the balance of payments problem; evolution of international economic institutions; and monetary relations.

E441 Economics of Labor Markets (3 cr.) P: E201, E321, and E270 or equivalent. Analysis of the functioning of labor markets with theoretical, empirical, and policy applications in determination of employment and wages in the U.S. economy.

E447 Economics of the Labor Market (3 cr.) P: E201. Analysis of the functioning of the U.S. labor market. Labor force concepts, unemployment, mobility, wages, and current manpower problems and policies. Analysis of wage determination, wage policy, and their interaction with institutional factors.

E450 Business Conditions Analysis and Forecasting (3 cr.) P: E201-E202. This course examines sources of instability in industrialized economies. Various theories of the business cycle are examined and critiqued. In addition, the empirical determinant of aggregate demand, prices, and interest rates are discussed. Alternative forecasting techniques are considered and the use of these techniques is demonstrated.

E470 Introduction to Econometrics (3 cr.) P: E270, Mathematics M119. Application of regression analysis to economic and business data. Estimation and hypothesis testing of classical regression model. Heteroscedasticity, collinearity, errors in observation, functional forms, and autoregressive models. Estimation of simultaneous equation models. Credit will not be given for both E470 and E472.

E485 Economic and Social Control of Industry (Antitrust) (3 cr.) P: E201 or permission of instructor. This course is a study of the economic reasoning behind and consequences of the application of antitrust laws aimed at altering the structure, conduct, and performance of the American economy. Specific legal cases that have been brought under the Sherman Act, the Clayton Act, as amended, and the Federal Trade Commission Act are analyzed.

Graduate Courses

E504 Mathematics for Economists (3 cr.) Topics in mathematics that are particularly useful in the application of microeconomic theory, macroeconomic theory, and econometrics. Topics covered include: matrix algebra, comparative-static analysis, constrained optimization, difference equations in discrete time, game theory, and set theory as applied to general equilibrium analysis.

E513 Special Topics in Economic History (3 cr.) Explicit methodology and economic analysis applied to major issues in American and European economic history.

E514 The Nonprofit Economy and Public Policy (3 cr.) P: E201. The role of nonprofit organizations (universities, churches, hospitals, orchestras, charities, day care, research, nursing homes) in mixed economies. Public policy controversies such as regulation of fundraising, antitrust against universities, ''unfair'' competition with for-profit firms, and the tax treatment of donations. (This course may not be taken for credit by anyone who has received credit in ECON E414.)

E519 Regional Economics (3 cr.) Regional economics is the study of economic behavior in space. The course examines the internal and interregional determinants of growth and decline of a region from supply and demand perspectives. Public policies to influence these determinants are considered.

E521 Theory of Prices and Markets (3 cr.) P: E504 or consent of the instructor. Pure theory of consumer behavior, competitive exchange, theory of production; resource allocation, Pareto optimum, monopoly and monopsony, imperfect competition, moral hazard, adverse selection, and market signaling.

E522 Theory of Income and Employment I (3 cr.) P: E504 or consent of the instructor. Intensive study of intermediate income theory; emphasis on construction and empirical significance of aggregative economic models of the determination of income, employment, and price level.

E528 Economic Analysis of Health Care (3 cr.) A graduate introduction to health economics. Applications of economic theory and econometric techniques to problems in various areas in health care. Topics include how physicians, institutions, and consumers respond to economic incentives and what policies contribute maximally to efficiency and welfare.

E541 Labor Market Analysis (3 cr.) P: consent of instructor. An analytical approach to the labor market. Theoretical underpinning and statistical testing of issues on demand and supply of labor, household decision making, human capital, contract theories, unionism, minimum wages, and discrimination.

E545 Applied Labor Economics (3 cr.) P: E321 or E470 or equivalents. Discussion of wage rates and working conditions, searches by workers or firms, investment in training, quits and layoffs, shirking, discrimination, the division of household labor, retirement, and implicit contracts. The course also examines the impact of institutions such as unions and the government on the efficiency of the labor market.

E551 Monetary Theory and Control (3 cr.) P: consent of instructor. Theory of portfolio allocation with specific reference to commercial banking; theory and practice of central bank control instruments and models of Federal Reserve behavior; role of money in determining equilibrium and growth.

E568 Public Finance I (3 cr.) P: E308 and E470. Partial equilibrium, microeconomic analysis of how tax and subsidy policies affect various types of individual and firm behavior. Theoretical models are introduced to assess and develop quantitative studies of fiscal policy. Summaries of the empirical impact of policy will be formed for the purpose of becoming an ''input'' in the complete general equilibrium analysis conducted in Public Finance II.

E569 Public Finance II (3 cr.) P: E568. Empirical examination of the general equilibrium effects of major tax and subsidy programs, such as personal income taxation, corporate profit taxation, income maintenance, social security, and government provision of education. In addition, proposed reforms to these programs will be analyzed using empirically based simulation models.

E570 Fundamentals of Statistics and Econometrics (3 cr.) Mathematical overview of statistics and econometrics at graduate level. Topics covered include probability and probability distributions, sampling distributions, tests of hypotheses, estimation, simple regression, multiple regression, generalized linear model and its applications, simultaneous equation system.

E574 Applied Econometrics and Forecasting (3 cr.) P: E570. An overview of techniques employed in economic model building, estimation, and usage. Topics covered include single and multi-equation system estimation, limited dependent variable regression techniques, hypothesis testing, policy analysis, and forecasting. Various forecasting techniques are discussed, including smoothing and decomposition methods and time series analysis. A number of projects are assigned throughout the semester in order to give the student hands-on experience with the different techniques.

E581 Topics in Applied Microeconomics I(3 cr.) P: E521. This course is a graduate-level introduction to theoretical and empirical applications in two areas of microeconomics. Applications to problems in the subdiscipline under study will be discussed. From an empirical standpoint, appropriate estimation techniques will also be discussed. Further discussion will consider how the system of firms, institutions, and consumers respond to economic incentives as well as normative issues-in determining which policies will contribute maximally to economic efficiency and social welfare.

E582 Topics in Applied Microeconomics II (3 cr.) P: E521. As in E581, this course will apply theoretical and empirical applications in two areas of microeconomics. Problems from a number of areas will be selected for demonstrating solutions. Theoretical model building and prediction, numerical model solving, and hypotheses testing empirically with real data will be included in the course.

E583 Introduction to Applied Macroeconomics (3 cr.) P: E522. This course is a graduate-level introduction to theoretical and empirical applications in two areas of macroeconomics. Applications to problems in the subdiscipline under study will be discussed. Application of estimation and calibration techniques appropriate for the problems in the area will be discussed.

E585 Industrial Organization and Control (3 cr.) P: consent of instructor. Analysis of interrelated structure, behavior, and performance in industrial markets and multimarket corporations; multidimensional nature of competitive processes. Public controls. Topics include patterns of oligopoly, vertical integration, entry barriers, ''cartelized'' coalescence, limit pricing, price discrimination, long-term contracts, capacity expansion and utilization, resource reallocation and innovation.

E600 Research in Economics (cr. arr.)

E808 Thesis (M.A.) (cr. arr.)