2012-2013 Economics Courses

Between 1947 and 1974, the productivity of the average American worker rose by approximately 104%—and the wages of the average American worker rose by 104%. But between 1975 and 2008, while productivity nearly doubled, real wages remained stagnant or even declined. What changed? This course will examine varying explanations for the rise of economic inequality in American life, including globalization/outsourcing, technological change, the influence of money on public policy, and the plummeting rate of private-sector unionization. We’ll examine the economic impact of this rising inequality, including its contribution to the recent financial/economic crisis. Finally, we’ll examine the impact of increasing inequality on our political process, including the rise of movements such as the Tea Party and Occupy Wall Street.

Economic theory attempts to explain urgent economic questions such as the causes of growth and depression, unemployment, inflation, poverty, and discrimination. Economic policy attempts to achieve desired outcomes. Yet, there is considerable controversy among theorists over the answers to economic questions and widespread dissatisfaction with the policy outcomes. This course will seek the basis for the controversy by examining the development of economic theory and the application of the theory in policy practice. The approach will emphasize the differing views offered by contending schools of economic thought and make the connection between theoretical assumptions and policy applications. Readings will include both theoretical and concrete policy-oriented writings. Topics will include the role of the Federal Reserve Bank, the effectiveness of public investment, the effects of globalization on the U.S economy, the effects of mergers and concentration on the behavior of US firms, and the use of government intervention to combat discrimination and poverty.

What are the motivations behind economic actors’ decisions to save or spend their income? Or to invest in productive capital or to refrain from taking the risk? What motivates governments’ choices about taxing and spending? The financial crisis of 2008 and the long and painful recovery have made answering these classic economic questions even more pressing. Economic analysis of necessity must include assumptions about human behavior alongside the analyses of the institutional dynamics that constrain economic choices, but those assumptions have varied drastically. Adam Smith assumed that people were motivated by a complex combination of self-interest and “sympathy” for the plight of others. Jeremy Bentham, in contrast, argued that only self-interest mattered, as people strived to “maximize pleasure, minimize pain.” Karl Marx emphasized the ways that human choices and human potential were limited by the logic and imperatives of the economic system. John Maynard Keynes attributed entrepreneurs’ willingness to invest in the face of uncertainty to “spontaneous optimism” and an “urge to action rather than inaction.” Modern neoclassical economics has largely based itself in Bentham’s utilitarian view, relying upon a simplified model of humans as “individual rational maximizers,” one-dimensional beings sometimes referred to as “homo economicus.” These differing assumptions about human behavior matter, because they lead to different understandings of how an economic system functions, how human well-being can be achieved (and even what is meant by well-being), and what roles government policy can play. In recent years, a new focus on economic behavior has combined insights from economics, psychology, and biology with a growing body of empirical study to examine more closely the motives and behaviors behind economic activity. These studies are revealing human behavior to be both more multidimensional and more contradictory than the simplified assumptions behind “homo economicus.” For example, people are self-interested but also can be generous, including to others that they don’t even know. They can exhibit convictions about ethics and fairness in their economic choices and will, at times, go against their own interests in order to discipline someone who has behaved against the ethical rules. Their choices may also violate narrow assumptions about rationality, as research shows that people may find it difficult to act in their own long-term interest, even when it is their stated intention—finding it much easier, for example, to plan to save tomorrow than to actually save today. This course will examine the development of economic arguments about human behavior, beginning with Smith and moving to the present. We will then investigate the studies of the behavioral economists to see how their findings have affected public policy, with a particular emphasis on the financial crisis and its aftermath. 

In the last few decades, there has been a dramatic increase in inequality at both the national and international levels. While there is increasing acceptance of the importance of monitoring inequality (e.g., by the World Bank, UNDP), there is far more disagreement about national and global inequality trends, what the fundamental determinants of inequality are, how inequality should be measured, what causes shifts in inequality, what impact it will have upon domestic and global politics and economic relations, and what policy responses are appropriate. This interdisciplinary course will consider a wide range of theoretical analyses to address these questions. At the international level, since states are embedded in an increasingly interwoven market system, we will discuss the issue of persistent market inequalities by analyzing different theories of market competition and their implications for international trade. This analysis of international competition will allow us to study the constraints within which individual states operate in order to promote domestic socioeconomic development policies. In the fall semester, we will discuss the theoretical debates and their implications; in the spring, we will analyze the concrete development experiences of a number of countries in order to consider the interactions among development, democracy, and economic inequality. In both semesters, we will discuss the relationship between the welfare state and the developmental state and how they have shaped the links among development, inequality, and poverty. Issues of taxation and industrial policies will be combined with analyses of state capacity building and the ways in which domestic and international power structures shape a state’s ability to bring about socioeconomic development. This seminar is designed for students who are interested in studying concrete problems in development along with the analytical/theoretical factors that underpin them. It requires no prior background in economics but does require some background in the social sciences. Students are advised to take the class for the whole year in order to gain a comprehensive understanding of the subject.

In this seminar, we will analyze the nature of money and finance from a variety of theoretical perspectives, including both heterodox and orthodox approaches. The theoretical discussions will be related to the current and previous financial crises. Since the Reagan/Thatcher era of the early 1980s, the conventional wisdom is the doctrine of monetarism and the policy of laissez-faire financial globalization, which is based on the theory of rational expectations and the efficient markets hypothesis. These policy proposals came into prominence on the heels of the global economic crisis that started in the late 1960s/early 1970s and the Third World Debt Crisis of the 1980s. We will critically analyze the monetarist doctrine by first studying the nature of money and debt from both the monetarist and alternative approaches. The goal of this part of the course is to analyze monetarist policies regarding the supposed ability of central banks to control the money supply so as to maintain the economy at its full-employment level of output. These policies are at the core of the so-called Washington Consensus (IMF and US Treasury Department) policies. With a laissez-faire policy in place, according to this perspective, the economic system will not exhibit endogenous financial instability. This approach will be contrasted with rival ones in which incalculable uncertainty prevails and financial instability is endogenous and recurrent, while the central bank cannot control the money supply. We will study alternative theoretical analyses of business cycles and seek to situate all of these debates in the context of the history of economic thought on monetary issues. The second part of the course will be an analysis of the current financial crisis and situate it in a historical context. This part of the course will introduce students to the relatively new literature on monetary stocks and flows and their implications for the accumulation of debt. Finally, the third part of the course will focus on the policy responses of debt crises, as well as their effects. Here, we will focus on alternative policy proposals; in particular, monetary and fiscal policies. This course requires interested students to have some background in economics or social science and a strong interest in political economy.

The term social entrepreneurship refers to an approach to creating sustainable and scalable social change. This seminar will define and explore social entrepreneurship as a field. It is not a course on how to become a social entrepreneur or how to build a social enterprise. Rather, we will examine theory, promise and practice in an emerging and dynamic field. What is the potential of social entrepreneurship as a catalyst for social change? What are the barriers, limits and constraints to achieving sustainable social impact? Focusing on global poverty gives us a context to look at social entrepreneurship as one approach to addressing complex and systemic problems. Issues and controversy are part of the terrain; for example, microcredit as a sustainable strategy for poverty alleviation and women’s empowerment or path toward deeper indebtedness of the poorest or the poor; market - based interventions to reach new consumers versus distribution of government or NGO aid to the most vulnerable populations; continuum of subsidy, sustainability and profit maximization. In addition to readings and other resources.

Contemporary economists who deal with labor relations (e.g. the analysis of wage determination and working conditions) do not explicitly discuss business investment and competitive decisions while scholars in the industrial organization literature (who study the business firm and competition) do not deal with issues surrounding labor relations.  And yet in the real world labor relations and industrial organization shape each other in complex ways.  The purpose of this course is to investigate the nexus between these two fields, in both theoretical and historical terms, and the implications for current problems.

The course has three broad parts.  In the first part we will investigate controversies regarding the nature of the business enterprise.  It is part of the conventional discourse on economic policy that free-market competition is the key to bringing about national wealth creation with rising standards of living. And yet there is considerable debate in the literature on industrial organization theory regarding the nature of the capitalist firm and the environment within which it grows or dies. Drawing on the classic writings of Schumpeter, the Oxford Economists’ Research Group, the Institutionalist tradition, and others, this part of the class will introduce students to a wide variety of theoretical perspectives on the firm by contrasting the textbook neoclassical theories of the firm with other theoretical perspectives.

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

Contemporary economists who deal with labor relations (e.g. the analysis of wage determination and working conditions) do not explicitly discuss business investment and competitive decisions while scholars in the industrial organization literature (who study the business firm and competition) do not deal with issues surrounding labor relations.  And yet in the real world labor relations and industrial organization shape each other in complex ways.  The purpose of this course is to investigate the nexus between these two fields, in both theoretical and historical terms, and the implications for current problems.

The course has three broad parts.  In the first part we will investigate controversies regarding the nature of the business enterprise.  It is part of the conventional discourse on economic policy that free-market competition is the key to bringing about national wealth creation with rising standards of living. And yet there is considerable debate in the literature on industrial organization theory regarding the nature of the capitalist firm and the environment within which it grows or dies. Drawing on the classic writings of Schumpeter, the Oxford Economists’ Research Group, the Institutionalist tradition, and others, this part of the class will introduce students to a wide variety of theoretical perspectives on the firm by contrasting the textbook neoclassical theories of the firm with other theoretical perspectives.

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

In the third, and final, part of the class we will discuss factors that have influenced business innovation and, in turn, been shaped by the latter, drawing in particular on contemporary writings in the National Systems of Innovation (NSI) literature. We will discuss the role of labor in the NSI framework, in particular the implications of technological change for employment and skills, given that technological change is of the labor-saving type.  Further, we will use the NSI framework to understand the growing challenge posed in the last three decades by firms from less wealthy nations. Finally, we will analyze the challenges faced by smaller firms in developing environmentally sustainable production methods. This course requires some background in economics/social sciences and an interest in historically informed analysis.

Macroeconomics studies the dynamics of an economy as a whole, looking at the forces that lead to economic growth or recession, the overall distribution of income, and the causes of unemployment and inflation. Different schools of economic thought offer varying and often contradictory explanations of these dynamic trends. Public policy debates play a central role in this discussion, as the different macroeconomic models have implications for the roles of fiscal and monetary policy, the desirable level of governmental intervention into and regulation of the private economy, and even what constitutes a good macroeconomic outcome. In this course, we will build and examine the competing macro models beginning with Keynes and moving up to the present theoretical debates—including the monetarist, new classical, neo-Keynesian, post-Keynesian, and political economic schools of thought—with attention to their differing policy implications. We will then focus on the 2008 financial crisis and its aftermath as a case study, examining the debates about its causes and appropriate policy responses. This course requires a background in economics.

Between 1947 and 1974, the productivity of the average American worker rose by approximately 104%—and the wages of the average American worker rose by 104%. But between 1975 and 2008, while productivity nearly doubled, real wages remained stagnant or even declined. What changed? This course will examine varying explanations for the rise of economic inequality in American life, including globalization/outsourcing, technological change, the influence of money on public policy, and the plummeting rate of private-sector unionization. We’ll examine the economic impact of this rising inequality, including its contribution to the recent financial/economic crisis. Finally, we’ll examine the impact of increasing inequality on our political process, including the rise of movements such as the Tea Party and Occupy Wall Street.

Economic theory attempts to explain urgent economic questions such as the causes of growth and depression, unemployment, inflation, poverty, and discrimination. Economic policy attempts to achieve desired outcomes. Yet, there is considerable controversy among theorists over the answers to economic questions and widespread dissatisfaction with the policy outcomes. This course will seek the basis for the controversy by examining the development of economic theory and the application of the theory in policy practice. The approach will emphasize the differing views offered by contending schools of economic thought and make the connection between theoretical assumptions and policy applications. Readings will include both theoretical and concrete policy-oriented writings. Topics will include the role of the Federal Reserve Bank, the effectiveness of public investment, the effects of globalization on the U.S economy, the effects of mergers and concentration on the behavior of US firms, and the use of government intervention to combat discrimination and poverty.

What are the motivations behind economic actors’ decisions to save or spend their income? Or to invest in productive capital or to refrain from taking the risk? What motivates governments’ choices about taxing and spending? The financial crisis of 2008 and the long and painful recovery have made answering these classic economic questions even more pressing. Economic analysis of necessity must include assumptions about human behavior alongside the analyses of the institutional dynamics that constrain economic choices, but those assumptions have varied drastically. Adam Smith assumed that people were motivated by a complex combination of self-interest and “sympathy” for the plight of others. Jeremy Bentham, in contrast, argued that only self-interest mattered, as people strived to “maximize pleasure, minimize pain.” Karl Marx emphasized the ways that human choices and human potential were limited by the logic and imperatives of the economic system. John Maynard Keynes attributed entrepreneurs’ willingness to invest in the face of uncertainty to “spontaneous optimism” and an “urge to action rather than inaction.” Modern neoclassical economics has largely based itself in Bentham’s utilitarian view, relying upon a simplified model of humans as “individual rational maximizers,” one-dimensional beings sometimes referred to as “homo economicus.” These differing assumptions about human behavior matter, because they lead to different understandings of how an economic system functions, how human well-being can be achieved (and even what is meant by well-being), and what roles government policy can play. In recent years, a new focus on economic behavior has combined insights from economics, psychology, and biology with a growing body of empirical study to examine more closely the motives and behaviors behind economic activity. These studies are revealing human behavior to be both more multidimensional and more contradictory than the simplified assumptions behind “homo economicus.” For example, people are self-interested but also can be generous, including to others that they don’t even know. They can exhibit convictions about ethics and fairness in their economic choices and will, at times, go against their own interests in order to discipline someone who has behaved against the ethical rules. Their choices may also violate narrow assumptions about rationality, as research shows that people may find it difficult to act in their own long-term interest, even when it is their stated intention—finding it much easier, for example, to plan to save tomorrow than to actually save today. This course will examine the development of economic arguments about human behavior, beginning with Smith and moving to the present. We will then investigate the studies of the behavioral economists to see how their findings have affected public policy, with a particular emphasis on the financial crisis and its aftermath. 

In the last few decades, there has been a dramatic increase in inequality at both the national and international levels. While there is increasing acceptance of the importance of monitoring inequality (e.g., by the World Bank, UNDP), there is far more disagreement about national and global inequality trends, what the fundamental determinants of inequality are, how inequality should be measured, what causes shifts in inequality, what impact it will have upon domestic and global politics and economic relations, and what policy responses are appropriate. This interdisciplinary course will consider a wide range of theoretical analyses to address these questions. At the international level, since states are embedded in an increasingly interwoven market system, we will discuss the issue of persistent market inequalities by analyzing different theories of market competition and their implications for international trade. This analysis of international competition will allow us to study the constraints within which individual states operate in order to promote domestic socioeconomic development policies. In the fall semester, we will discuss the theoretical debates and their implications; in the spring, we will analyze the concrete development experiences of a number of countries in order to consider the interactions among development, democracy, and economic inequality. In both semesters, we will discuss the relationship between the welfare state and the developmental state and how they have shaped the links among development, inequality, and poverty. Issues of taxation and industrial policies will be combined with analyses of state capacity building and the ways in which domestic and international power structures shape a state’s ability to bring about socioeconomic development. This seminar is designed for students who are interested in studying concrete problems in development along with the analytical/theoretical factors that underpin them. It requires no prior background in economics but does require some background in the social sciences. Students are advised to take the class for the whole year in order to gain a comprehensive understanding of the subject.

In this seminar, we will analyze the nature of money and finance from a variety of theoretical perspectives, including both heterodox and orthodox approaches. The theoretical discussions will be related to the current and previous financial crises. Since the Reagan/Thatcher era of the early 1980s, the conventional wisdom is the doctrine of monetarism and the policy of laissez-faire financial globalization, which is based on the theory of rational expectations and the efficient markets hypothesis. These policy proposals came into prominence on the heels of the global economic crisis that started in the late 1960s/early 1970s and the Third World Debt Crisis of the 1980s. We will critically analyze the monetarist doctrine by first studying the nature of money and debt from both the monetarist and alternative approaches. The goal of this part of the course is to analyze monetarist policies regarding the supposed ability of central banks to control the money supply so as to maintain the economy at its full-employment level of output. These policies are at the core of the so-called Washington Consensus (IMF and US Treasury Department) policies. With a laissez-faire policy in place, according to this perspective, the economic system will not exhibit endogenous financial instability. This approach will be contrasted with rival ones in which incalculable uncertainty prevails and financial instability is endogenous and recurrent, while the central bank cannot control the money supply. We will study alternative theoretical analyses of business cycles and seek to situate all of these debates in the context of the history of economic thought on monetary issues. The second part of the course will be an analysis of the current financial crisis and situate it in a historical context. This part of the course will introduce students to the relatively new literature on monetary stocks and flows and their implications for the accumulation of debt. Finally, the third part of the course will focus on the policy responses of debt crises, as well as their effects. Here, we will focus on alternative policy proposals; in particular, monetary and fiscal policies. This course requires interested students to have some background in economics or social science and a strong interest in political economy.

The term social entrepreneurship refers to an approach to creating sustainable and scalable social change. This seminar will define and explore social entrepreneurship as a field. It is not a course on how to become a social entrepreneur or how to build a social enterprise. Rather, we will examine theory, promise and practice in an emerging and dynamic field. What is the potential of social entrepreneurship as a catalyst for social change? What are the barriers, limits and constraints to achieving sustainable social impact? Focusing on global poverty gives us a context to look at social entrepreneurship as one approach to addressing complex and systemic problems. Issues and controversy are part of the terrain; for example, microcredit as a sustainable strategy for poverty alleviation and women’s empowerment or path toward deeper indebtedness of the poorest or the poor; market - based interventions to reach new consumers versus distribution of government or NGO aid to the most vulnerable populations; continuum of subsidy, sustainability and profit maximization. In addition to readings and other resources.

Contemporary economists who deal with labor relations (e.g. the analysis of wage determination and working conditions) do not explicitly discuss business investment and competitive decisions while scholars in the industrial organization literature (who study the business firm and competition) do not deal with issues surrounding labor relations.  And yet in the real world labor relations and industrial organization shape each other in complex ways.  The purpose of this course is to investigate the nexus between these two fields, in both theoretical and historical terms, and the implications for current problems.

The course has three broad parts.  In the first part we will investigate controversies regarding the nature of the business enterprise.  It is part of the conventional discourse on economic policy that free-market competition is the key to bringing about national wealth creation with rising standards of living. And yet there is considerable debate in the literature on industrial organization theory regarding the nature of the capitalist firm and the environment within which it grows or dies. Drawing on the classic writings of Schumpeter, the Oxford Economists’ Research Group, the Institutionalist tradition, and others, this part of the class will introduce students to a wide variety of theoretical perspectives on the firm by contrasting the textbook neoclassical theories of the firm with other theoretical perspectives.

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

Contemporary economists who deal with labor relations (e.g. the analysis of wage determination and working conditions) do not explicitly discuss business investment and competitive decisions while scholars in the industrial organization literature (who study the business firm and competition) do not deal with issues surrounding labor relations.  And yet in the real world labor relations and industrial organization shape each other in complex ways.  The purpose of this course is to investigate the nexus between these two fields, in both theoretical and historical terms, and the implications for current problems.

The course has three broad parts.  In the first part we will investigate controversies regarding the nature of the business enterprise.  It is part of the conventional discourse on economic policy that free-market competition is the key to bringing about national wealth creation with rising standards of living. And yet there is considerable debate in the literature on industrial organization theory regarding the nature of the capitalist firm and the environment within which it grows or dies. Drawing on the classic writings of Schumpeter, the Oxford Economists’ Research Group, the Institutionalist tradition, and others, this part of the class will introduce students to a wide variety of theoretical perspectives on the firm by contrasting the textbook neoclassical theories of the firm with other theoretical perspectives.

In the second part we will investigate, from a historical and an international perspective, the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. For example we will ask: how did particular worker-employer relations originate and evolve historically in Denmark, Germany, the United States, and the United Kingdom?  How did business groups, trade unions, and the Social Democratic Party in Sweden come to deal with conflictual and cooperative arrangements in the post-war period and how were these shaped by the global competitiveness of Swedish firms during economic booms and slumps?

In the third, and final, part of the class we will discuss factors that have influenced business innovation and, in turn, been shaped by the latter, drawing in particular on contemporary writings in the National Systems of Innovation (NSI) literature. We will discuss the role of labor in the NSI framework, in particular the implications of technological change for employment and skills, given that technological change is of the labor-saving type.  Further, we will use the NSI framework to understand the growing challenge posed in the last three decades by firms from less wealthy nations. Finally, we will analyze the challenges faced by smaller firms in developing environmentally sustainable production methods. This course requires some background in economics/social sciences and an interest in historically informed analysis.

Macroeconomics studies the dynamics of an economy as a whole, looking at the forces that lead to economic growth or recession, the overall distribution of income, and the causes of unemployment and inflation. Different schools of economic thought offer varying and often contradictory explanations of these dynamic trends. Public policy debates play a central role in this discussion, as the different macroeconomic models have implications for the roles of fiscal and monetary policy, the desirable level of governmental intervention into and regulation of the private economy, and even what constitutes a good macroeconomic outcome. In this course, we will build and examine the competing macro models beginning with Keynes and moving up to the present theoretical debates—including the monetarist, new classical, neo-Keynesian, post-Keynesian, and political economic schools of thought—with attention to their differing policy implications. We will then focus on the 2008 financial crisis and its aftermath as a case study, examining the debates about its causes and appropriate policy responses. This course requires a background in economics.