ECN2145 Economics II

COURSE DESCRIPTION

Economics II is an advanced course that delves deeper into the complexities of economic theory, policy, and real-world applications. This course builds upon foundational economic concepts to explore nuanced topics such as market failures, advanced macroeconomic and microeconomic theory, international finance, and behavioral economics. It provides a comprehensive analysis of how economies function in a globalized context, the role of government intervention, and the impact of economic decisions on societal welfare. Through this course, students will gain a robust understanding of economic dynamics, policy implications, and the interrelationships between various economic sectors.

Participants will engage with complex economic models, examine case studies on policy intervention, and explore the intricacies of global trade, finance, and labor markets. By understanding advanced economic concepts, students will be equipped to analyze current economic issues critically, formulate informed policy recommendations, and apply theoretical knowledge to practical scenarios. This course is designed for students pursuing careers in economics, public policy, international relations, finance, and related fields, aiming to deepen their expertise and analytical skills in economic analysis.

Key Points 

1. Market Failures and Government Intervention: This key point explores the causes and consequences of market failures, including monopoly power, public goods, and externalities. It analyzes how government intervention can address these failures through regulation, taxation, and subsidies to promote social welfare. Students will examine the delicate balance between market forces and state intervention, learning to critically evaluate the effectiveness and limitations of different policy measures in correcting market inefficiencies.
2. Advanced Macroeconomic Theory: This section provides an in-depth analysis of macroeconomic phenomena such as inflation, unemployment, and economic growth. It covers key theoretical frameworks, including aggregate demand and supply, the Phillips curve, and the role of expectations in shaping macroeconomic outcomes. Students will explore how fiscal and monetary policies influence economic stability, the trade-offs between inflation and unemployment, and the long-term determinants of growth, such as technological progress and capital accumulation.
3. International Finance and Capital Flows: This key point delves into the complexities of international finance, covering exchange rate dynamics, balance of payments, and the determinants of capital flows. Students will learn how different exchange rate regimes impact international trade and investment, the role of foreign direct investment (FDI) in global economic integration, and the challenges posed by exchange rate volatility. This section equips students with the analytical tools needed to understand the interactions between national economies in a globalized financial environment.
4. Behavioral Economics and Financial Decision-Making: This section integrates psychological insights into economic theory, exploring how cognitive biases and heuristics influence financial decision-making. It examines common biases like loss aversion, overconfidence, and framing effects, highlighting their impact on investment behavior, savings, and consumption. The course also discusses the role of behavioral interventions, such as nudging, in guiding individuals toward more rational financial decisions, thereby addressing market anomalies and promoting financial well-being.
5. Environmental Economics and Policy: This key point focuses on the economic implications of environmental challenges and the role of policy in addressing them. It covers the concepts of externalities, particularly negative externalities like pollution, and the economic rationale for environmental regulation. Students will explore policy instruments such as taxes, subsidies, and market-based mechanisms like cap-and-trade systems. The section emphasizes the importance of sustainable development and the need to balance economic growth with environmental preservation.
6. Advanced Topics in International Economics: This section provides a comprehensive overview of advanced international economic concepts, including trade theory, foreign direct investment, exchange rate dynamics, and globalization. Students will explore how comparative advantage drives trade patterns, the impact of exchange rate movements on trade competitiveness, and the role of multinational corporations in global economic integration. The course also discusses the influence of international institutions and trade agreements on global economic policy, preparing students to analyze the complexities of global economic interactions and develop strategies for sustainable economic development.

Core Learning Outcomes

• Analyze Market Failures and Policy Interventions: Critically evaluate market failures and assess the effectiveness of government interventions in promoting social welfare.
• Apply Advanced Macroeconomic Theories: Use theoretical frameworks to analyze macroeconomic issues and understand the impact of fiscal and monetary policies on economic stability.
• Understand International Finance Dynamics: Examine the complexities of international finance, including exchange rates, capital flows, and the role of FDI in global economic integration.
• Incorporate Behavioral Insights into Economic Analysis: Understand the impact of cognitive biases on economic decisions and apply behavioral economics principles to address market anomalies.
• Evaluate Environmental Economics and Policy: Assess the economic rationale for environmental policies and understand their role in promoting sustainable development.
• Analyze Advanced International Economic Topics: Explore international trade theories, exchange rate dynamics, and the influence of globalization on economic policy and development.