INTRODUCTION TO ECONOMICS-2

The aim of the course is to cover basic concepts and tools of economics and emphasize how they can be used to understand a broad range of real world problems. In the first module, we will cover general topics of microeconomics that include firms’ behaviour, market equilibria, principles of game theory and the role of the government in the economy. In the second module, we will analyse topics related to the market failures, growth theory and innovation, and international trade.

- knowledge of basic economic concepts
- capacity to solve simple economic models
- capacity to simplify complex economic problems
- development of logical skills and problem solving
- development of social and language skills

You are expected to be comfortable with basic principles of Mathematics. Knowledge from Introduction to Economics-1 are important to understand the topics covered in Introduction to Economics-2.

Asymmetric Information
1. Information in Economics analysis
2. Moral Hazard and Adverse Selection
3. Signalling, Contracts and Organizations
4. Applications: credit and labour markets

Game Theory
5. Basics
6. Nash Equilibria
7. Repeated games and cooperation
8. Market structure, oligopoly and games

Innovation and Growth
9. Production function and growth accounting
10. Knowledge and public goods
11. The Appropriability problem for knowledge investments
12. Market and non-market solutions to the appropriability problem

Externalities and the Environment
13. Externalities and missing markets
14. Application to pollution and environmental problems
15. Public policies
16. Climate change: strategic interactions and global public goods

Goolsbee, A., Levitt, S., and Syverson, C., 2012, Microeconomics Worth Publishers, New York, NY.

The slides of the lectures as well as all the material concerning the tutorials will be uploaded on the course website

Written exam 75%, continuous evaluation 25%. Continuous evaluation based on presentations of reading groups

- lectures
- tutorials
- group presentations and class discussions

written