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 3000-word essay and empirical project (20%) and a three-hour examination (80%)

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 role of models in economics and the crucial nature of assumptions and simplification in building economic models and deriving their implications
• understand the roles of key elements of a modern economy: firms, workers, consumers, markets, technology, financial institutions, the legal framework and institutions
• use key economic principles, such as the insights that can be gained from models of constrained choice; equilibrium and game theory
• understand the impact of asymmetric information on markets and the role of design of contracts
• understand the impact of market structure on economic outcomes
• understand the problem of market failures and design of policy and institutions addressing externalities and public goods, with application to environmental economics
• use models of social choice
• understand basic macroeconomic concepts and policies aimed at both short-run demand management and long-run growth
• understand causes and consequence of inequality
• use historical and theoretical approaches to explain why banks and financial markets are vulnerable to crises, and analyse the role of regulatory policy and institutions
• access economic and financial data, carry out basic numerical transformations and graphical representations in software packages, and use these tools to elucidate key issues in economics
• demonstrate familiarity with the concepts of correlation and regression, and know how to interpret common statistical techniques as applied to economic hypotheses.