MICROECONOMICS AND POLICY ANALYSIS I U8213
Columbia University Rajeev H. Dehejia
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Section 1 Lectures: MW TAs: Erika Lundquist (erl2104) Mariam
Dayoub (md2208) Section 2
Lectures: MW
2.10pm – 4pm (407 IAB) TA: Clara Albuquerque
(cda2102) PA: Claire Husson (ceh2102) PA: Tara Herrick (tmh2106) PA: Sebastien Morel (smm2114) |
Professor’s Contact information 807B IAB Telephone: 854-4659 Office
Hours: MW |
TA’s and Tutorials
The
teaching assistant (TA) will run a weekly session to review class material and
help with the problem sets, and in addition will schedule weekly office hours.
The program assistant (PA) will have weekly office hours and, before the
midterm, will run weekly math review sessions.
Robert S. Pindyck and Daniel
L. Rubinfeld (2005). Microeconomics,
6th edition (required).
The accompanying study guide is optional. Some chapters of The Microeconomics of Policy Analysis by
Lee Friedman will be assigned, but will be available at the library or on-line. Alternatively, all of the
relevant pages in the Friedman text have been collected in a Course Book that
will be available at the Village Copier on Broadway (between 111th
& 112th). This text is a useful reference for advanced
material.
Problem sets
There
will be six or seven problem sets. If you complete all of the problem sets, the
lowest grade will be dropped. Note that there are no late submissions; a late
is a zero.
Group Project
Students
should form groups of three; the TA will assist those students who are unable
to form their own groups. Each group is responsible for finding an article from
a general-interest newspaper or magazine from the calendar year 2004, and
presenting an economic analysis of the content of the article. The articles
need not explicitly be about economic policy issues. The key is to use the
analytic tools presented in class to shed light on the issue being discussed.
Groups must have their article approved by the TA (deadline: 28
October), and then present a 15-minute (maximum) analysis in class and a three
page (maximum, including all figures and charts) written analysis summarizing
their presentation (presentation dates and submission deadlines to be selected
at random for the latter half of November).
Grading
The grade will be determined by: (i) one final exam (40%); (ii) one midterm (30%); (iii) problem sets (15%); (iv) newspaper article analysis/presentation (10%); and, (v) class participation (5%). Failure to complete the final exam will result in a failing grade. Failure to complete the midterm, a problem set, or the presentation will lead to zero being assigned for that evaluation. There are no make-up exams or alternate dates. Failure to participate in a group project will lead to a full letter reduction in the grade.
Attending class
It
is essential that you are able to attend all classes. Do not plan
travel, take other classes, enroll in internships, or make
other commitments that conflict with class dates. Note that the midterm, final
exam, and group presentation are all in class time. Dates of the exams, problem
sets, and group projects may change depending on the pace of the lectures.
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September 8 |
Introduction, or Why (not)
to study Microeconomics; Demand and supply review; Math review. PowerPoint Unit 1
Introduction |
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September 13 |
Marshallian demand and Producer and Consumer Surplus. PowerPoint
Unit 2 Demand and Supply |
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September 15 |
No classes. |
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September 20 |
Tax Incidence and
elasticity of demand PowerPoint Unit 3 Tax
Incidence and Elasticity |
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September 22 |
Preferences and Utility PowerPoint Unit 4
Introduction to Utility |
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September 27 |
Utility, Budget Constraints
and Income and Substitution Effects PowerPoint Unit 5 Utility
and Demand and Unit 6 Income and Substitution Effects |
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September 29 |
Welfare Analysis:
compensating variation, equivalent variation. Application: Welfare costs
of a tax. Reading: Friedman chapter
4, pp. 179-208. PowerPoint Unit 7
Compensating Variation & Equivalent Variation and Unit 8 In-Kind Transfer
and Income Maintenance |
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October 4 |
Time and discounting. Application: Savings
behavior. PowerPoint Unit 9
Intertemporal Decisions |
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October 6 |
Uncertainty. PowerPoint Unit 10
Uncertainty and Lotteries |
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October 11 |
Application: The demand for
insurance, risk pooling, risk spreading. PowerPoint Unit 10 Uncertainty and Lotteries |
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October 13 |
Concepts of efficiency:
exchange economies, and Pareto optimality and potential Pareto improvements.
Utility possibilities. Social Welfare PowerPoint Unit 11 Exchange
Economies and Pareto Optimality |
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October 18 |
The efficiency of the
market: welfare theorems. The inefficiency of the
market: Arrow impossibility. PowerPoint Unit 12 Exchange
Economy and Social Welfare Functions |
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October 20 |
Game Theory Application: The arms race. PowerPoint Unit 13 Game
Theory |
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October 25 |
The inefficiency of the
market: externalities and the justification for intervention. Application: regulating
pollution, cigarette taxes. PowerPoint Unit 14
Externalities |
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October 27 |
Midterm. |
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November 1 |
University holiday. |
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November 3 |
Application: common
property resources (parks, public health care). PowerPoint Unit 15 Public
Goods and Common Property Resources |
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November 8 |
Market solutions to market
failures: the Coase Theorem. PowerPoint Unit 15 Public
Goods and Common Property Resources |
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November 10 |
Asymmetric Information. Application: Moral hazard
in health insurance, Why did banks build such nice buildings? PowerPoint Unit 16
Asymmetric Information and PowerPoint Unit 17 Asymmetric Information and
Adverse Selection |
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November 15 |
International trade and
globalization. |
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November 17 |
In-class presentations. |
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November 22 |
Auctions as a means of
provision and sale of public property. PowerPoint Unit 18 Auctions |
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November 24 |
No
classes. |
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November 29 |
Application: The market for
regulation. |
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December 1 |
In-class presentations. |
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December 6 |
The fundamental paradox of
public policy. |
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December 8 |
In-class presentations. |
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December 13 |
Final Exam. |