| LEC # | LECTURE OUTLINES | KEY DATES |
|---|---|---|
| 1 |
Introduction: what 14.03/14.003 is all about Application 1: minimum wage and employment: theory and evidence - Minimum wage and employment in the standard competitive model - Minimum wage and employment in monopsony model - How can we empirically distinguish these cases? | |
| 2 |
Continuation of minimum wage and employment: theory and evidence - The problem of causal inference—fundamental - The Rubin causal model (RCM) - Experiments and the RCM - Quasi-experiments in economics - The difference-in-difference setup - Card and Kreuger: what they did, what they found Overview of class and themes: - Why bother with economic theory? - Causality: what do we mean? How do we know it when we see it? - Experiments and quasi-experiments in economics | |
| 3 |
Introduction to consumer theory - The axioms of consumer theory - Existence of a utility function - Properties of utility function - Cardinality vs. ordinality - Monotone transformations Utility maximization and constrained optimization - Utility maximization - Expenditure minimization | Homework 1 due |
| 4 |
Revealed preference Consumer sovereignty Applications of consumer theory: lump-sum vs. in-kind transfers, price changes and consumer surplus | |
| 5 |
Revealed preference Application of consumer theory: the value of food stamps | |
| 6 |
Normal, inferior, and Giffen goods Marshallian vs. Hicksian demand Slutsky equation | |
| 7 | Income and substitution effects: the value of time | Homework 2 due |
| 8 | Wrap-up and review | |
| Exam 1 | ||
| 9 |
Applied competitive analysis - Market demand - Producer and consumer surplus - Deadweight loss Application: The U.S. sugar program | |
| 10 | Applied competitive analysis: second example | |
| 11 |
General equilibrium in a pure exchange economy - Edgeworth box - Production possibility frontier - Fundamental welfare theorems | |
| 12 |
General equilibrium continued - Jensen "digital provide" - Comparative advantage | Homework 3 due |
| 13 |
General equilibrium and trade: comparative advantage vs. competitiveness Application: The RA problem | |
| 14 |
General equilibrium and trade, applications - The method of instrumental variables - Does trade cause growth? | |
| 15 |
Externalities: definition, consequences and remedies The problem of social cost: the Coase theorem |
Homework 4 due Extra credit due 3 days after Lec #15 |
| 16 |
Externalities: wrap-up Choice under certainty: the expected utility framework | |
| Exam 2 | ||
| 17 |
Risk and safety regulation: how insurance markets work Application: using revealed preference to place a monetary value on life | |
| 18 |
Why is information different? Imperfect information in markets The lemons problem Application: adverse selection, securitization and subprime lending | |
| 19 | Economics of information: adverse selection and market failure in insurance markets | Homework 5 due |
| 20 | Economics of information: insurance markets continued | |
| 21 | Conclusion: insurance markets, private information, and market failure | |
| 22 |
Economics of information: signaling - Explanations for the economic return to schooling: human capital vs. job market signaling | Homework 6 due |
| 23 | Free range freakonomics: topics to be determined | |
| Exam 3 |
