Economics: Theory, Policy and Institutions

• Credit value: 30 credits at Level 7
• Convenors and tutors: Professor Stephen Wright, Arup Daripa, Professor Sandeep Kapur
• Assessment: a series of structured essays, 3000 words in total (100%)

This module trains postgraduate students from a range of different backgrounds in the key concepts and skills of economics, including the use of empirical evidence in testing economic hypotheses using both informal and formal methods.

The key objective will be to equip you with the analytical tools to address major issues where economics, politics and/or philosophy overlap, with a particular focus on public policy.

A central feature of the new module is that it will not require prior training in economics or mathematical or statistical techniques. The module will require you to get to grips with some of the key techniques economists use; but these will be introduced in an intuitive way, and with a clear emphasis on their direct application to practical policy questions. If you are new to the discipline, economics can present a major intellectual challenge, so you should expect to be stretched.

By the end of this module, you will be able to:

• understand the three basic pillars of economics (microeconomics, macroeconomics and econometrics) and the role of economics models, and critically assess the conventional criticisms of economics as a discipline
• contrast the Classical vs Keynesian view of the macroeconomy and use them to critically analyse policy responses to recent crises
• identify why economists disagree by analysing variations of standard macroeconomic models
• analyse the sources of long-term economic growth and critically assess the relevant empirical evidence
• analyse the distribution of income and patterns of employment and unemployment using standard models of the labour market
• use economic analysis to understand current economic problems (e.g. inflation) and formulate policy responses
• understand the basic ideas of constrained choice and properties of consumer demand, labour supply and intertemporal choice
• understand the basics of supply decisions by competitive firms, the notion of efficiency in the context of a single market as well as the entire economy, and the impact of a variety of policies
• understand the basic ideas of strategic behaviour using game theory, and understand why cooperation can emerge among self-interested agents
• understand the impact of market structure on economic outcomes, and the impact of asymmetric information on markets and the role of design of contracts
• understand the problem of market failures arising from externalities and public goods and design of policy and institutions addressing these problems, with application to environmental economics.