Course: ECON 630 (T, 7:20-10:00)
Term: Fall 2008
Instructor: Professor Garett Jones
Office
hours: Tuesday, 6-7pm, location TBD in
Phone: (314) 973-7243
Email: gjonesb@gmu.edu
Website: I will use WebCT this semester for all course-related materials.
Course Description
The primary goal of this
course is to provide an introduction to a modern language widely used in
economics: The language of mathematics.
Economists use only a narrow set of idioms and expressions in this rich
language, and we’ll focus on the most important ones: linear algebra, multivariate
calculus, and probability. By gaining
comfort with this language, you will be able to read academic articles
yourself, without having to depend on third- or fourth-hand translations
written by other economists or by journalists.
Another important goal of the course is to help you survive and thrive in your elective courses here at GMU: In many of those courses, whether in public choice or industrial organization or labor, you will be in courses with Ph.D. students who have usually had much more rigorous mathematical training. This course should help you bridge the gap.
Required Texts
Alpha C. Chiang and Kevin Wainwright, Fundamental Methods of Mathematical Economics, fourth edition. The classic in the field, frequently updated and still quite useful.
Hal R. Varian, Intermediate Microeconomics: A modern
approach. A leading figure in the
economics of information in the 1970’s, Varian is now Chief Economist at
Google: Maybe you’ll find the secret to his success in this textbook. Officially it’s an undergraduate textbook,
but it’s quite rigorous, and the appendices (all of which are required reading)
bridge the gap between undergraduate microeconomics and the ability to read
academic journal articles.
Edward T. Dowling, Schaum’s Outlines: Introduction to Mathematical
Economics, third edition. You can never have too many solved problems. An inexpensive way to practice the skills
you’ll be building.
Schedule Notification
We
will miss class on the day after Columbus day: On that
Tuesday only, Monday classes will
meet instead.
As
a result, we will meet on the Tuesday before Thanksgiving. Please plan
accordingly.
Tentative Schedule
Chiang
and Wainwright, Chapters 1-4: Algebra review, mathematical syntax, and the
basics of linear algebra. (Schaum: 1-2, 10).
Quiz 1 (all quizzes last 30
minutes, and will take place at beginning of class)
Chiang
and Wainwright, Chapters 5-8: Linear algebra and differential calculus. (Schaum: 11-12, 3)
Application: Sargent, Macroeconomic Theory, Chapter 1.
Quiz 2
Chiang
and Wainwright, Chapters 9-12: Optimization. (Schaum: 4-9)
Application: Mankiw, Romer,
Weil, (1992). “A Contribution to the Empirics of Economic
Growth,” Quarterly Journal of Economics.
Quiz 3
Varian,
Chapters 3-6: Preferences, Utility, and Choice. (Note: Read chapters 1 and 2 of
Varian for background)
Application: Becker, Murphy, Grossman, (2006). “The
Market for Illegal Goods: The Case of Drugs,” Journal of Political Economy.
Quiz 4
Varian,
Chapters 10-13 and 37: Time, Uncertainty, and Information
Applications:
Akerlof, (1970). “The Market for 'Lemons':
Quality Uncertainty and the Market Mechanism”. Quarterly Journal of Economics
Friedman and Savage (1948). “The Utility Analysis of Choices
involving Risk,” Journal of Political
Economy.
McFadden, (1999). “Rationality for Economists?” Journal of Risk and
Uncertainty.
Final Exam
In addition, I reserve the right to make minor changes, as well as to provide a few short (<5 pages) handouts in class.
Grading Procedures
You will have regular quizzes and a comprehensive final. Ten percent of your grade will be based on informed class participation (a proxy for attendance and civil, intelligent comments).
Quizzes 40% (10% each)
Class Participation 10%
Final Exam 50%
Academic Ethics
Please note that you are at an Honor Code university. You are expected to conduct yourself in a manner that is consistent with the learning mission of the University. All forms of academic dishonesty are strictly forbidden. This includes but is not limited to the following: communicating with other students during exams; unapproved references to books, notes or “cheat sheets” during exams; and plagiarism–representing another person’s work as your own. You should be aware that plagiarism is often easy to recognize. The minimum penalty for an incident of academic dishonesty will be a score of zero on the assignment where the dishonesty occurred. For further information on academic ethics, please consult the student handbook.
Class Attendance/Missed Exams
I highly recommend class attendance, since I believe there is strong correlation between class attendance and academic performance. If you happen to miss a class, you should ask a classmate to borrow their notes. I will not, as a general rule, offer make-up exams or early finals. Exceptions will be made for students with documented illnesses.
For Further
Avinish K. Dixit, Optimization
in Economic Theory. A short classic that covers most of this semester’s topics in 183
fast-moving, elegantly written pages.
David Kreps, A Course in
Microeconomic Theory. The first few chapters
of this text give a slow, masterful, coverage of the basics of the microeconomic
theory of choice.
Dennis
Lindley, Making Decisions. A low-tech coverage of choice under uncertainty. He recently wrote a similar book entitled Understanding Uncertainty.
Jean-Jacques Laffont, John Bonin, Helene Bonin, Economics of Information and Uncertainty. A fast-moving treatment by a great theorist.
Hal Varian, Microeconomic Analysis. I was torn between using Varian’s intermediate
text and beefing it up versus using his graduate text
and slowing it down. If you’re looking
to speak the language of microeconomics, this is a great place to start.
Schaum’s
Outline of Probability and Statistics. Recommended if you’ve never
seen probability or statistics before.