KOMMENTIERTES VORLESUNGSVERZEICHNIS (MODULHANDBUCH) COURSE CATALOGUE STUDIENGANG MASTER – M.Sc. IN ECONOMICS

Compulsory Courses MASTER – M.Sc. in Economics

Mathematics for Economists Modul Mathematics for Economists (CM 1)

Professor/Lecturer N.N.Course type Lecture and TutorialCompulsory/Optional CompulsoryHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishPrerequisites „Abiturwissen” mathematics; basic knowledge of

linear algebra and multivariable calculus; being open for a rigorous approach - theorems stated carefully and some proofs given

Syllabus/Course outline 1.Introduction 2.Methods of Proof 3.Matrix Algebra 4.Functions 5.Integration 6.Optimization 7.Basics in Probability Theory 8.Basic Stochastic Processes 9.Basics in Dynamic Programming 10.More Advanced Material in Topology Literature Most of the material is covered in any good math for econ book. We will mostly be using the ones below. Most of the relevant core material is covered in the Jehle/Reny appendix.

de la Fuente. Mathematical Methods and Models for Economists. Cambridge University Press (2000)

M. Hoy, J. Livernois, C.J. McKenna, R. Rees, and T. Stengos. Mathematics for Economics. MIT Press. 2nd edition (2001)

G. Jehle and P.J. Reny. Advanced Microeconomic Theory. Addison Wesley. 2nd edition (2000)

Mas-Colell, M.D. Whinston, and J.R. Green. Microeconomic Theory. Oxford University Press (1995)

C.P. Simon and L.E. Blume. Mathematics for Economists. W. W. Norton & Company (1994)

K. Wainwright and A. Chiang. Fundamental Methods of Mathematical Economics. McGraw-Hill/Irwin. 4th edition (2004)

Econometrics Modul Econometrics (CM 2)

Professor/Lecturer Winter, JoachimCourse type Lecture and TutorialCompulsory/Optional CompulsoryHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishPrerequisites Empirische Ökonomie für Fortgeschrittene or an

equivalent course in econometrics; basic knowledge of matrix algebra and probability theory.

Syllabus/Course Outline This course introduces graduate students to econometric methods for the analysis of cross-sectional and panel data. The course presents commonly used inference methods for linear and nonlinear specifications, including linear and nonlinear regression models, maximum likelihood estimation, instrumental variables estimation, generalized method-of-moments estimation, and estimation methods for models with qualitative and limited dependent variables. In the accompanying exercise sessions, participants practice the application of these methods to real-world problems, using the econometrics package STATA.The linear model and OLS estimation

1. Instrumental variables 2. Linear models for panel data 3. Treatment effects 4. M estimators

Literature The course is based on the textbook by Jeffrey M. Wooldridge, Econometric Analysis of Cross Section and Panel Data, Cambridge, MA: MIT Press, 2002, complemented by material from the new book by Joshua D. Angrist, Mostly Harmless Econometrics, Princeton, NJ, and Oxford: Princeton University Press, 2009. Additional references will be given as appropriate.

Optional Courses MASTER – M.Sc. in Economics

Advanced Macroeconomics Modul Foundations of Applied Economics (OM 1)

Professor/Lecturer Carstensen, KaiCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishPrerequisites Undergraduate macroeconomics Syllabus/Course Outline This course introduces to economic growth and business cycle theory. 1. Neoclassical Growth Model (Solow/Swan Model) 2. Ramsey Model 3. New Growth Theory 4. Real Business Cycle Model Literature David Romer (2011) Advanced Macroeconomics, Fourth Edition, McGraw-Hill,

Boston.

Advanced Microeconomics Modul Foundations of advanced Economics (OM 1)

Professor/Lecturer Schnitzer, MonikaCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishPrerequisites Undergraduate microeconomics Syllabus/Course Outline This course is addressed to master students who are not currently planning on following up with a PhD degree or doing research on their own. It will introduce the theoretical concepts needed in field courses throughout the master program. The emphasis is less on methodology, but rather on examples where to use these theoretical concepts. The topics covered in this module include game theory, market behavior in oligopolistic markets and decision making under risk and uncertainty. The rational-choice foundations of microeconomics are examined critically, particularly in the light of experimental evidence and of alternative theories of economic decision-making. The Course will focus on the following topics:

Topic 1: Introduction, Game theory: Static games (with notes) Topic 2: Game theory: Dynamic games (with notes) Topic 3: Game theory: Static games with incomplete information (with notes) Topic 4: Game Theory: Dynamic games with incomplete information (with notes) Topic 5: Price Competition with capacity constraints (with notes) Topic 6: Product Differentiation (with notes) Topic 7: Strategic substitutes versus strategic complements (with notes) Topic 8: Innovation (with notes) Topic 9: Monopolistic competition (with notes) Topic10: Decision making under uncertainty (with notes) Topic11: Risk sharing, securitization (with notes) Topic12: Limitations of expexted utility theory (with notes) Topic13: Time preferences and discounting (with notes) Topic 14: Final discussion Literature Core texts are: Gibbons, R., A primer in Game Theory, Prentice Hall 1992. Tirole, J., Industrial Organization, 7th edition, 1993. Gravelle, H., Rees, R., Microeconomics, 3rd edition, Pearson Education, 2004.

Public Economics Modul Foundations of Applied Economics (OM 1)

Professor/Lecturer Holzner, Christian / Sinn, Hans-Werner Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishPrerequisites Undergraduate Level Economics Syllabus/Course Outline 0. Introduction 0.1. Distribution − Allocation − Stabilisation 0.2. Efficiency and equity 0.3. Statistics 1. History of the welfare state 1.1. From ancient times to present 1.2. Bismarck‘s reforms 1.3. Social development in the 19th century 2. Pensions and intergenerational contract 2.1. Pension system 2.2. Pension formula and the reforms from 1992 and 1999 2.3. PAYGO system 2.4. Excursus: Interest and growth rate in the Solow Model 2.5. Capital cover vs. PAYGO system: implicit sovereign debt, implicit taxes and the

transition problem 2.6. Mackenroth Thesis 2.7. Crisis of the German pension system 2.8. Reform proposal of the Wissenschaftliche Beirat beim Bundesministerium für

Wirtschaft 2.9. Value of children and immigrants for the pension system 2.10. Social Security Hypothesis 2.11. PAYGO system as insurance against childlessness 2.12. PAYGO system, one-sided altruism and the investment in human capital 3. Health insurance 3.1. Some facts 3.2. Moral Hazard 3.3. Reasons for insurance compliance 3.3.1. Kinked utility function 3.3.2. Adverse Selection 4. Social benefits and unemployment insurance 4.1. Country comparison 4.2. Disincentives 4.3. Reform proposals 5. Theory of the welfare state 5.1. Redistribution as insurance: Evaluation under the veil of ignorance 5.2. Private versus public insurance 5.3. Risk taking, insurance and redistribution 6. Welfare state under systems competition 6.1. Redistribution and factor mobility 6.2. Social politics in Europe: Centralisation or Nationality PrincipleLiterature References will be given in the lecture.

Macroeconomics (Research) Modul Foundations of Economic Research (OM 2)

Professor/Lecturer Illing, Gerhard / Sunde, UweCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 9 Language EnglishPrerequisites Good knowledge in macro-, microeconomics, and

mathematical methods (calculus) Syllabus/Course Outline Macroeconomics has two goals: It (should) develop theories to describe/understand the evolution of important aggregate variables such as consumption, output, investment, employment, as well as prices such as interest rates and wages. It should judge policy measures in a normative way based on the relevant macroeconomic theories. In it’s methods, modern macroeconomics is based on the concept of dynamic, stochastic, general equilibrium models. The Course will focus on the following topics:

I Growth 1. Neoclassical Growth Model: Solow-Swan and Extensions 2. Neoclassical Growth Model: Ramsey-Cass-Koopmans 3. Extensions of the Neoclassical Growth Model

a. AK-Models b. Growth through Externalities c. Public Sector Investments d. Human Capital

4. Endogenous Growth 5. Heterogeneity: Overlapping Generations Models 6. Growth Empirics and Current Research Topics II Fluctuations (Business Cycles) 1. Fluctuations: Stylized Facts and Recap of Models 2. Real Business Cycles 3. New Keynesian Models of Fluctuations III Policy (Fiscal, Monetary, Unemployment) 1. Fiscal Policy

a. Debt and Deficit b. Ricardian Equivalence c. The Fiscal Multiplier d. Strategic Debt e. Delayed Stabilization f. Debt Crises g. Fiscal Policy and Growth

2. Monetary Policy 3. Unemployment

a. Hiring, Firing, and Adjustment Costs b. Efficiency Wages c. Frictions

Literature: D. Romer, Advanced Macroeconomics, McGraw Hill, 3rd edition, 2006. Further references will be given in the lecture.

Microeconomics (Research) Modul Foundations of Economic Research (OM 2)

Professor/Lecturer Schmidt, KlausCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 9 Language EnglishPrerequisites Good knowledge in microeconomics Syllabus/Course Outline This course is addressed to master students who are interested in economic research and who would like to learn modern methods of microeconomic theory at a more rigorous level. The course is structured in a similar way as microeconomic courses at top international graduate schools. It is entirely based on the leading textbook of Mas-Colell, Whinston and Green and offers a solid preparation for more applied research in almost all fields of micro- and macroeconomics. If you think about writing a doctoral dissertation or if you consider working in a research institution you should definitely take this course. But the course is also addressed to students who enjoy rigorous thinking and precise arguments and who may consider a career in an international organization, in a consultancy, in public service or private enterprise. The only prerequisite is that you are open-minded and interested in the deep questions of economics and how to answer them rigorously. This does not require any specific mathematical knowledge that goes beyond the mathematics course offered in our master program. The course is not necessarily more difficult or labor intensive than the courses on Advanced Microeconomics, but the emphasis is different. If you don't know which course to take, try it out.

The course will focus on following topics 1. Game Theory 2. Consumer and Producer Theory 3. Decisions under Uncertainty 4. Information Economics 5. Partial and General Equilibrium Theory

Literature Core text: The main reference is Mas-Colell, Whinston and Green, Microeconomic Theory, Oxford: Oxford University Press 1995. All participants have to work with this book. Additional references will be given in the lecture.

Advanced Economic History Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Cantoni, DavideCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Term Paper and PresentationCycle Winter-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites Basic macroeconomics (esp. growth theory) and

econometrics MSc-Course Prerequisites Advanced (or Applied) Macroeconomics,

Econometrics Syllabus/Course outline This course aims to explain the very long run trends in economic history. The two main questions that underlie the classes will be: (1) why are our societies so much more productive/rich than our ancestors’ ones? and (2) why are there such large differences in income levels across societies today? To investigate these questions, we will look for the explanatory power of various factors, such as geography, technology, institutions, and culture, trying to isolate fundamental determinants from proximate ones. As put by North and Thomas in 1973: “The factors we have listed (innovation, economies of scale, education, capital accumulation etc.) are not causes of growth; they are growth”—instead, causes of growth will be the focus of this class.

As such, this class is highly complementary to any courses or readings you might do in economic growth, economic development, or political economy. Moreover, the focus of this class will be on reading and discussing research papers with a strongly empirical focus; it will thus be complementary to the (micro)econometrics classes in the program and should be viewed as good preparation to one’s own writing of applied research papers. Literature Specific readings will be indicated in the course.

New Keynesian Macroeconomics Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Carstensen, Kai and Wollmershäuser, Timo Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Written Exam (120 minutes)Cycle Summer-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites Advanced (or Applied) Macroeconomics (Real

Business Cycle models, dynamic modeling); Time-series Econometrics;

MSc-Course Prerequisites Advanced (or Applied) Macroeconomics, Econometrics

Syllabus/Course Outline Objectives: The main goal of the course is to introduce into New Keynesian Macro-economics (NKM) both from an empirical and a theoretical perspective in order to explain business cycles. A particular emphasis will be put on inflation and monetary policy: How do we measure monetary policy shocks? What are the empirical effects of monetary policy? Can we explain these effects theoretically? How should optimal monetary policy look like?

1. Stylized Macroeconomic Facts of the European and US Business Cycle a. The Hodrick-Prescott filter b. Some stylized facts

2. Stylized Microeconomic Facts of the Price Setting Mechanism a. Evidence based on micro price data b. Evidence based on firm surveys

3. VAR Models a. The identification problem in macroeconomics b. The VAR model c. Identification strategies for VAR models d. The monetary transmission mechanism in the US e. The monetary transmission mechanism in the euro area

4. The New Keynesian Baseline Model 5. Monetary Policy Design in the New Keynesian Model

a. Sources of suboptimality b. Optimal monetary policy I c. Simple policy rules I d. The welfare function e. Monetary policy tradeoffs f. Optimal monetary policy II (discretion versus commitment) g. Simple policy rules II h. Monetary policy under uncertainty

6. Extensions of the Baseline New Keynesian Model Literature Galí, J. (2008), “Monetary Policy, Inflation, and the Business Cycle”, Princeton

University Press. Walsh, C. (2003), “Monetary Theory and Policy”, The MIT Press.

Empirical Public Economics Modul Economic Theory (OM 3) or Modul Applied Economic Analysis and Empirical Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Dwenger, NadjaCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2 Exam Written Exam (60 minutes) and Exercises Cycle Summer-Semester (irregularly)ECTS-Points 6 Language EnglishGeneral Prerequisites Knowledge of linear regression analysis MSc-Course Prerequisites Econometrics Syllabus/Course Outline The central goal of this course is to provide an introduction to the use of empirical methods for answering economic and political questions. You will learn to critically assess empirical papers in the area of public economics and you will be taught how to apply modern econometric methods, which are commonly used in empirical public economics, to a variety of research questions. Topics include the effect of taxation on the behavior of individuals and firms, the evaluation of social programs, the incentive effects of subsidies, and the design of transfer programs such as unemployment insurance or the pension system. When discussing the relevant literature, we will focus not only on the content, but also on the empirical methodology used to identify causal effects. Empirical approaches covered in the course include, amongst others, natural and field experiments, difference-in-differences estimations, instrumental variables, discrete-choice analysis, regression discontinuity design, and panel data analysis. Computer exercises and real-world micro data sets will help you to better understand these methods and to develop fluency in the usage of the statistical software package Stata. Literature Lecture notes and papers read in the course are made available at the beginning of the course on http://www.tax.mpg.de/en/pub/public_economics/courses/empirical_public_economics.cfm

Frontiers in International Trade Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Eckel, CarstenCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (60 minutes) and Presentation Cycle Winter-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Students are expected to be familiar with and have a

working knowledge of graduate level micro and at least some background of international trade.

MSc-Course Prerequisites Advanced (or Applied) Microeconomics Syllabus/Course outline This course takes a firm level approach to the theory of international trade and is intended to bring students to the frontier of research in this field. 1. Introduction 2. Monopolistic Competition

1.1 Love of variety 2.2 Ideal variety 2.3 Heterogeneous Firms

3. Oligopoly 3.1 Partial Equilibrium: Reciprocal Dumping 3.2 General Equilibrium: GOLE

4. Recent Topics 4.1 Multi-Product Firms 4.2 Quality and Trade 4.3 Frictions and Trade

Literature

Time Series Analysis Modul Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Flaig, GebhardCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Good knowledge of econometric methods and

statistical analysis; basic knowledge of time series models (ARIMA models)

MSc-Course Prerequisites Econometrics Syllabus/Course Outline The aim of the course is to present important concepts of time series analysis (Stationarity of stochastic processes, ARIMA models, spectral analysis, state space modelling etc.). The course is a mixture of theory and practical applications of time series methods. The theoretical material (presented mainly in the lecture) focuses upon properties of stationary time series and their analysis in the time and frequency domain. In the tutorial, problems of specification and estimation of time series are treated. We use the programming language GAUSS for empirical applications.

Outline of lecture 1) Stationary time series models (basic concepts) 2) ARIMA models 3) Spectral analysis 4) Analysis of important filters in economics 5) An introduction to state space modelling and the Kalman filter

Outline of tutorial 1) Lag operators and some properties of lag polynomials 2) Trigonometric functions and complex numbers 3) Fundamentals of programming language GAUSS 4) Descriptive analysis of time series 5) Model selection and estimation of ARIMA models 6) Empirical aspects of spectral analysis 7) Applications of filters (Trend and cycles, seasonal adjustment etc) Literature James Hamilton (1994), Time Series Analysis. Princeton University Press. Andrew Harvey (1993), Time Series Models. MIT Press. Robert Shumway/David Stoffer (2011), Time Series Analysis and its Applications.

Springer.

Advanced Industrial Organization Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6) ) or Economic Research & Public Economics (OM 7) Professor/Lecturer Harhoff, Dietmar and Schnitzer, Monika Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Participants should have a solid knowledge of

Economics (Bachelor of Economics major) MSc-Course Prerequisites Advanced (or Applied) Microeconomics

Econometrics Syllabus/Course Outline The aim of this course is to present advanced topics in Industrial Organisation, with both theoretical and empirical research questions. Participants should have a good knowledge of microeconomics and basic knowledge of game theory. A basic know-ledge of econometrics would also be an advantage. Students should be willing to participate actively in lectures and classes, to read the original literature, and to regularly solve problem sets. The course is directed to doctoral students and M.A. students. The course will be taught in English. There will be a written examination (2 hours) at the end of the semester. The relevant material for this course as well as references will be made available throughout the course. Literature Belleflamme and Peitz, Industrial Organization - Markets and Strategies. Cabral, L., Introduction to Industrial Organization. Tirole, J., The Theory of Industrial Organization. Angrist and Pischke, Mostly harmless econometrics: an empiricst’s companion.

Advanced Theory of Taxation Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Haufler, AndreasCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2 Exam Written Exam (120 minutes)

Cycle Summer-Semester ECTS-Points 9 Language EnglishGeneral Prerequisites good understanding of microeconomic theory;

willingness to do in-depth analysis of optimal tax results; Bachelor-level course on taxation

MSc-Course Prerequisites Advanced (or Applied) Macroeconomics , Advanced (or Applied) Microeconomics

Syllabus/Course Outline The lecture aims to cover a broad range of research questions in the field of taxation, and simultaneously provide an introduction to the methods used in recent theoretical work on public economics. Starting from the benchmark models of optimal commodity and income taxation, the theory of optimal taxation and tax reform is successively extended to account for issues of risk, public goods and externalities, market imperfections and strategic interaction between both firms and countries. The analysis will be predominantly theoretical, but empirical applications are also included for most subjects.

The purpose of the tutorial is to deepen the understanding of the material. This is done primarily in the form of exercise questions that often employ fully specified utility and production functions so that complete allocations can be (parametrically) computed. In addition structured reading assignments are given which include guidelines and questions that point to the role of specific modelling assumptions and core results in the paper. Literature Gareth D. Myles (1995): Public Economics. Cambridge University Press. Original journal articles

Search and Matching Theory with Applications in Labour Market Policy Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Public Economics (OM 5) or Economic Research (OM 6) or Economic Research & Public Economics (OM 7)Professor/Lecturer Holzner, ChristianCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam written exam (120 minutes)Cycle Summer-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites Solid background knowledge in mathematics for

economists, and microeconomics MSc-Course Prerequisites Advanced (or Applied) Microeconomics Syllabus/Course outline I. Labour Market Theory 1. Beyond a perfect labour market 2. Mortensen-Pissarides matching model 3. Models with search and on-the-job search 4. Directed search models II. Labour Market Policy 1. Labour unions 2. Employment protection 3. Minimum wages 4. Optimal UI-benefits and income taxation Literature There is no single textbook which covers the whole course. However all of the following cover some aspects: Pierre Cahuc and Andr´e Zylberberg (2004): Labor Economics, MIT Press. Christopher A. Pissarides (2000): Equilibrium Unemployment Theory, MIT Press. Dale Mortensen (2005): Wage dispersion, MIT Press.

Information about specific readings will be given in the course.

Monetary Theory Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Illing, GerhardCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2 Exam written exam (120 minutes) Cycle Summer-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites You must be familiar with basic inter-temporal

optimization and the analysis of static and dynamic systems with rational expectations, providing you with a good understanding of macroeconomic general equilibrium models. You are expected to have taken a master course in Advanced (or Applied) Macroeconomics at a level corresponding to David Romer’s textbook.

MSc-Course Prerequisites Macroeconomics , Microeconomics , Econometrics Syllabus/Course Outline The aim of the course is to introduce into core models of Monetary Theory and to show how they can be used to provide insights for the design of monetary policy. The course will also survey selected current research topics in this field. Topics include the role of money in flexible-price general equilibrium models and in models with sticky price adjustment; Monetary Transmission mechanisms, Monetary policy rules; credibility issues in monetary policy; the importance of institutional design for monetary policy and issues in monetary policy implement-tation. Apart from New Keynesian models, the course will also cover the interaction between monetary and fiscal policy, the role of government debt and the theory of the fiscal price level; monetary policy and financial stability; incomplete financial markets and models of liquidity crises; monetary policy in Open Economies.

Emphasis will be both on rigorously formulated theoretical models and on economic intuition. Even though the course will be mainly theoretical, empirical relevance will be emphasized. It aims to get both a deeper understanding of current central bank practise and a good intuition of recent theoretical advances. Literature Gali, Jordi, Monetary Policy, Inflation and the Business Cycle, Princeton University

Press, 2008. Illing, Gerhard, Money: Theory and Policy, Script 2012. Walsh, Carl E. Monetary Theory and Policy, 3nd edition, MIT-Press, 2010. Woodford, Michael, Interest and Prices: Foundations of a Theory of Monetary

Policy, Princeton University Press, 2003.

Behavioral and Experimental Economics Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Kocher, MartinCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Presentation and Term PaperCycle Summer-Semester (irregularly)ECTS-Points 9 Language EnglishGeneral Prerequisites Basic economic thinking (microeconomics) and

standard game-theoretic concepts MSc-Course Prerequisites Advanced (or Applied) Microeconomics Syllabus/Course Outline The course focuses on how psychological insights and experimental methods have been influencing economic thinking. We will discuss several selected topics in microeconomics and public economics, most of which involve situations with strategic interaction.

Introduction, methodology Bargaining games Social preferences Cooperation Individual decision-making Laboratory, programming, statistics Guessing game and learning Auctions Team decision-making Self-control (and neuro-economics) Literatur: There is no single textbook which covers the course. Information about specific readings will be given in the course.

Political Economics Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public Economics (OM 5) or Economic Research (OM 6)Professor/Lecturer Meier, VolkerCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Summer-Semester (sporadic)ECTS-Points 6 Language EnglishGeneral Prerequisites Basic economic thinking (micro-economics) and

public economics MSc-Course Prerequisites Advanced (or Applied) Microeconomics, Public

Economics Syllabus/Course outline 1. Introduction: Public Finance and Public Choice 2. Preferences and Voting 3. Electoral Competition 4. Agency Models 5. Partisan Politicians 6. General-Interest Politics 7. Special-Interest Politics 8. Political Regimes 9. Electoral Cycles Literature D. C. Mueller (2003), Public Choice III. Cambridge University Press: Cambridge etc. T. Persson and G. Tabellini (2000), Political Economics. MIT Press: Cambridge and

London.

Distribution Theory and Policy Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public Economics (OM 5) Professor/Lecturer Meier, VolkerCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Summer-Semester (sporadic)ECTS-Points 6 Language EnglishGeneral Prerequisites Basic economic thinking (micro-economics and

public economics) MSc-Course Prerequisites Advanced (or Applied) Microeconomics , Public

Economics Syllabus/Course Outline In its first part, the course discusses various measures of inequality and both classical and neoclassical theories of distribution. The second part is devoted to applications in International Economics, Labour Economics, Social Policy and Political Economics. Literature A.B. Atkinson, F. Bourguignon (2000): Introduction: Income Distribution and

Economics, in: A.B. Atkinson, F. Bourguignon (Eds), Handbook of Income Distribution, Vol. 1, Amsterdam etc. , pp. 1-58.

F.A. Cowell (1995): Measuring Inequality, LSE Handbooks in Economics, Second Edition.

Systems Competition Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Meier, Volker and Stimmelmayr, Michael Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites Basic economic thinking (micro-economics) and

public economics MSc-Course Prerequisites Advanced (or Applied) Microeconomics , Public

Economics Syllabus/Course outline Introduction: Competition among States Taxes and Public Infrastructure Goods The Erosion of the Welfare State Hamiltonians Social Dumping in the Transformation Process Ecological Competition The Competition of Product Standards Limited liability, Risk Taking and the Competition of Bank Regulators The Competition of Competition Rules The Implications of Systems Competition for Europe and the Greek Crisis Literature D. C. Mueller (2003), Public Choice III. Cambridge University Press: Cambridge etc. T. Persson and G. Tabellini (2000), Political Economics. MIT Press: Cambridge and

London

Growth and Natural Resources Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public Economics (OM 5) or Economic Research (OM 6)Professor/Lecturer Pittel, KarinCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Basic knowledge in the fields of environment and

resource economics as well as in dynamic modeling is helpful but not essential.

MSc-Course Prerequisites Advanced (or Applied) Macroeconomics Syllabus/Course Outline The course focuses on the intertemporal implications of resource scarcity for economic growth. To lay the foundations for the analytical analysis, the course starts with a short repetition of neoclassical growth theory and a longer introduction to endogenous growth theory. It then focuses on specific aspects with respect to the extraction of exhaustible and the harvest of renewable resources. Topics dealt with include the socially optimal extraction path, effects of environmental policies, the long-run potential for economic growth under resource scarcity, the direction of technological development and the role of property rights.Literature Barro, R. J., Sala–i–Martin, X. (2004), Economic Growth, MIT Press. Chiang, A.C. (1992), Elements of Dynamic Optimization, McGraw Hill. Perman, R. et. al (2003), Natural Resource and Environmental Economics, Pearson.

The Political Economy of Intergenerational Transfers Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Poutvaara, PanuCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written Exam (120 minutes)Cycle Winter-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Participants should have a solid knowledge of

Economics MSc-Course Prerequisites Advanced (or Applied) Macro- and Microeconomics Syllabus/Course outline This course analyzes political economy models related to various intergenerational transfers, most notably, social security (public pensions) and public education. The course starts with an overview of median voter models in the presence of overlapping generations, and discusses also interest-group based models. After this, more structure is added into the discussion by including different types of social security, with focus on how the political support to social security depends on whether social security benefits are earnings-related or flat-rate, and also on the effects of early retirement provisions. After this, the course analyzes political support for public education, and how public education and social security can be linked in the political process. The course also explores the scope for reforming social security, military draft as a form of intergenerational redistribution, and the effects of the mobility of labor.

Topics are:

1. Median voter and interest groups models of social security 2. Earnings-related and flat-rate benefits 3. Population aging 4. Education and social security 5. Early retirement 6. Scope for reforming social security 7. Generational incidence and political economy of conscription 8. Mobility of labor and public provision of higher education 9. Migration and Social Security Literature Specific Readings will be given for each topic.

Contract Theory Modul Economic Theory (OM 3) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Schmidt, KlausCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2 Exam Written Exam (60 minutes) and Presentation Cycle Summer-Semester ECTS-Points 9 Language EnglishGeneral Prerequisites Participants should have a solid knowledge of

Microeconomics and Game Theory. MSc-Course Prerequisites Microeconomics Research Syllabus/Course Outline The course is directed to advanced master and doctoral students. Participants should be willing

to participate actively in lectures and classes, to read the original literature, to regularly solve demanding problem sets, and to give a presentation on a paper in the second part of the course.

All participants have to hand in individual solutions to all problem sets before these problems are discussed in class. At most one problem set may be handed in late.

In the first eight weeks this will be a regular lecture with classes covering the following topics:

1. Introduction 2. Static Moral Hazard Models 3. Dynamic Moral Hazard Models 4. Adverse Selection 5. Mechanism Design 6. Incomplete Contracts 7. Behavioral Contract Theory

In the last four weeks we will have student presentations of several papers on some or all of the following topics: Foundations of Incomplete Contracts, Contracts and Competition, Implicit Contracts, Career Concerns, Organizations, Behavioral Contract Theory, Experimental Contract Theory Literature Bolton, Patrick and Matthias Dewatripont (2005), Contract Theory, Cambridge: MIT-

Press. (This textbook captures many issues to be discussed in the course. A detailed list of further references will be given as the course starts).

Labor Economics: Theory and Applications Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Sunde, UweCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam written exam (120 minutes)Cycle Summer-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites The course is largely self-contained. Nevertheless,

solid background knowledge in mathematics for economists, microeconomics and empirical methods is required.

MSc-Course Prerequisites Advanced (or Applied) Microeconomics , Econometrics

Syllabus/Course Outline This course offers an introduction to modern labor economics. The course focuses on the combination of theoretical models and empirical applications, and on the distinction between standard theories of the labor market and implications of considering imperfect labor markets. The course covers the main areas of labor economics and presents standard contributions, as well as recent research articles in the respective fields.

The course covers the following topics:

1. Quantitative Labor Supply a. Static Labor Supply b. Dynamic Labor Supply c. Empirical Studies and Policy Applications

2. Qualitative Labor Supply: Human Capital Theory a. The Becker Model of Human Capital b. Life Cycle Models of Education c. Human Capital Externalities d. Estimating the Return on Human Capital

3. Labor Demand a. Static Labor Demand b. Dynamic Labor Demand and Adjustment Costs c. Empirical Applications

4. Search a. The Individual Search Problem b. Search and Equilibrium c. Search Empirics

5. Unemployment a. Wage Rigidity and Unemployment: Efficiency Wages b. Minimum Wages c. Frictional Unemployment and Search-Matching Models d. Empirical Applications

Literature Main Reference: P. Cahuc and M. Zylberberg: Labor Economics, MIT Press, 2004. Additional references are given in the course.

Long-Run Development Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Sunde, UweCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Term Paper and Presentation Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites The course is largely self-contained. Nevertheless,

advanced knowledge in macroeconomics (particularly growth) is required.

MSc-Course Prerequisites Macroeconomics Research Syllabus/Course Outline This course offers an introduction to modern macroeconomics. The course addresses master and PhD students interested in long-run development. The course focuses on recent contributions to theories of unified growth that account for long run stagnation, sustained growth, and the endogenous transition between the two regimes. Particular attention is paid to demographic development and institutional change.

The course covers the following topics:

1. Long-Run Economic Growth: Traditional Approaches 2. Unified Growth

a. Fertility Models b. Subsistence Models c. Technological and Sectoral Change d. Longevity

3. Accounting for Patterns of Comparative Long-Run Development 4. Institutional Change

Literature References are given in a pre-meeting to the course in February 2012.

Topics in International Trade Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6)Professor/Lecturer Tarasov, AlexanderCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written exam (60 minutes) and Presentation Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites International Trade Theory, Microeconomics MSc-Course Prerequisites Advanced (or Applied) Microeconomics or Research

Microeconomics Syllabus/Course Outline This course covers the theory of international trade at a graduate level. Specifically, it includes basic trade theories (the Heckscher-Ohlin and Ricardian models of trade), new trade theory (the Krugman model), the so-called “New New” trade theory (the Melitz and Eaton-Kortum models), and assorted topics such as “Firm Boundaries and Trade”, “Multinational Production”, “Income Distribution and Trade”, etc. Literature Feenstra, R. (2003): "Advanced International Trade: Theory and Evidence,"

Princeton University Press.

Microeconometrics Modul Applied Economic Analysis and Empirical Economics (OM 4) or Economic Research (OM 6) Professor/Lecturer Winter, JoachimCourse type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Written exam (120 minutes)Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Econometrics at the level of a 1st semester graduate

course MSc-Course Prerequisites Econometrics Syllabus/Course Outline 1. Review of linear regression models 2. Maximum likelihood estimation 3. Hypothesis and specification tests, bootstrap methods 4. Binary dependent variables 5. Multinomial models and discrete choice 6. Censoring and selection models 7. Count data models 8. Mixture models and unobserved heterogeneity Literature A. C. Cameron and P. K. Trivedi: Microeconometrics: Methods and Applications.

New York: Cambridge University Press, 2005. A. C. Cameron and P. K. Trivedi: Microeconometrics Using Stata. College Station,

TX: Stata Press, 2008.

Econometric Evaluation of Education Policies Applied Economic Analysis and Empirical Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic Research (OM 6) or Economic Research & Public Economics (OM 7) Professor/Lecturer Wößmann, Ludger and Schwerdt, Guido Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 2+2Exam Term Paper and Presentation Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Advanced knowledge and interest in applied

econometrics, experience with working with Stata, willingness to conduct own empirical research

MSc-Course Prerequisites Econometrics Syllabus/Course Outline This Ph.D. course, which is open for advanced Masters students, is not a traditional lecture course, but rather a reading-&-paper course. The main part of the course will be that each participant develops her/his own applied paper project, and the main course requirement will not be a traditional exam, but rather a term paper that should look like the first draft of a small empirical paper, plus a presentation. The course is devised to ensure that participants learn about education policy, about evaluation methods, and about (the reality of) how to do applied research. At the same time, it tries to convey the enjoyment of doing economic research and requires participants to be creative and productive.

After a brief introduction on research methods for empirical identification and on selected hot topics in the economics of education, the main part of the course will consist of sessions to discuss papers that everyone has read in advance and of sessions where everybody presents and discusses her/his ongoing paper project, new ideas and practical problems that turn up while working on it. The main content of the meetings will be well-founded discussions of policy and of research strategies. The specific topics covered in the course will partly be endogenous to the specific interests expressed by participants.

Selected possible topics: - Research methods to identify causal effects in the economics of education - Educational production, class-size effects - Accountability, reforms of the school system - Choice, autonomy, competition, vouchers, private schools - Teacher quality, teacher incentives, teaching methods - Intergenerational mobility, family effects, nature vs. nurture - Peer effects, social interaction - Non-cognitive skills - Early childhood intervention programs - Tuition fees and financial aid for universities - Vocational education, training, and lifelong learning with technological change Selected Literature Angrist, J.D., J.-S. Pischke (2009). Mostly Harmless Econometrics: An Empiricist’s Companion.

Princeton, NJ: Princeton University Press. Schlotter, M., G. Schwerdt, L. Woessmann (2011). Econometric Methods for Causal Evaluation of

Education Policies and Practices: A Non-Technical Guide. Education Economics 19 (2): 109-137. Abdulkadiroglu, A., J. Angrist, S. Dynarski, T. Kane, P. Pathak (2011). Accountability and Flexibility

in Public Schools: Evidence from Boston's Charters and Pilots. QJE 126 (2): 699-748. Lavy, V. (2010). Effects of Free Choice among Public Schools. RES 77 (3): 1164-1191. Rothstein, J. (2010). Teacher Quality in Educational Production: Tracking, Decay, and Student

Achievement. QJE 125 (1): 175-214. Urquiola, M., E. Verhoogen (2009). Class-size Caps, Sorting, and the Regression-discontinuity

Design. AER 99 (1): 179-215.

Currently not offered optional courses Advanced Game Theory Modul Economic Theory (OM 3) or Economic Research (OM 6) or Economic Research & Public Economics (OM 7)Professor/Lecturer Rady, Sven (now University of Bonn) Course type Lecture and TutorialCompulsory/Optional OptionalHours/week 4+2Exam Written Exam (120 minutes)Cycle Summer-SemesterECTS-Points 9 Language EnglishGeneral Prerequisites The course is intended for students who have

already had an introductory course in game theory or its applications to economics and who master the standard mathematical techniques (algebra, analysis, probability) needed for a rigorous formulation of the theory and its main results. Students with good formal skills should be able to make up for a lack of background in game theory.

MSc-Course Prerequisites Research Microeconomics Syllabus/Course outline This course studies noncooperative game theory with particular emphasis on dynamic games.

1. Introduction 2. Neoclassical Growth 3. Endogenous Growth 4. Growth and Non-Renewable Resources 5. Growth and Renewable Resources 6. Growth and Pollution

Literature Osborne, Martin J. and Ariel Rubinstein (1994), A Course in Game Theory, MIT

Press. Fudenberg, Drew and Jean Tirole (1991), Game Theory MIT Press.

Courses Master of Science Betriebswirtschaftslehre (for M.Sc. Betriebswirtschaftslehre students only)

Managerial Economics 1 Professor/Lecturer Kocher, Martin / Zöttl, GregorCourse type Lecture and TutorialCompulsory/Optional CompulsoryHours/week 2+2Exam Written exam Cycle Winter-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Basic knowledge in microeconomics Syllabus/Course Outline This course is part of the M.Sc. Programme of the Faculty of Management (BWL). It presents fundamental microeconomic concepts with a focus on managerial decision making. The course focuses on microeconomic contributions to managerial decision making and includes areas such as profit maximization, pricing, strategic decision making, information asymmetries and behavioral economics.

Topics:

1. Introduction 2. Maximization 3. Maximization, Consumer Behavior 4. Price Discrimination 5. Price Discrimination, Perfect Competition 6. Market Failure 7. Strategic Behavior 8. Implicit Collusion 9. Strategic Behavior, Implicit Collusion 10. Expected Utility 11. Risk Sharing 12. Incentives and Moral Hazard 13. Incentives and Moral Hazard (Experiment)

Literature David M. Kreps, Microeconomics for Managers, Norton. Robert S. Pindyck and Daniel L. Rubinfeld, Microeconomics, Pearson Education

(Prentice Hall). Hal R. Varian, Intermediate Microeconomics: A Modern Approach, Norton.

Managerial Economics 2 Professor/Lecturer Eckel, Carsten / Wollmershäuser, Timo Course type Lecture and TutorialCompulsory/Optional CompulsoryHours/week 2+2Exam Written exam Cycle Summer-SemesterECTS-Points 6 Language EnglishGeneral Prerequisites Basic knowledge in macroeconomics Syllabus/Course Outline 1 Introduction 2 The closed economy 2.1. Goods and financial markets: the IS-LM model 2.2. The labour market and aggregate supply 2.3. The AS-AD model 2.4. The Phillips curve 3 Intertemporal aspects 3.1. The Ricardian (Non-)equivalence 3.2. Dynamic inconsistency 4 Economic growth 4.1. The Solow-Swan model 4.2. The Ramsey model 4.3. Endogenous growth 5 The open economy 5.1. The foreign exchange market 5.2. Balance of payments and national accounts 5.3. The Mundell-Fleming model 5.4. Exchange rate regimes Literature Blanchard, O. (2003), Macroeconomics, Prentice Hall. Felderer, B. and S. Homburg (1992), Macroeconomics and New Macroeconomics,

Springer. Heijdra, B. and F. van der Ploeg (2002), Foundations of Modern Macoreconomics,

Oxford University Press King, P. and S. King (2009), International Economics, Globalization, and Policy,

McGraw-Hill. Krugman, P. and M. Obstfeld (2009), International Economics: Theory and Policy,

Pearson