Syllabus: Principles of Real-World Economics, Econ 397RW

We shall discuss controversial topics relevant to modern economics from an interdisciplinary perspective and explore the role of psychology, sociology and political science in economic theory and policy, topics that are usually not included in Principles of Economics courses. The course offers a wide perspective on the psychological foundations of economic activity by introducing the students to the new field of behavioural economics and behavioural finance. We enrich the standard neo-classical model by studying such concepts as bounded rationality and satisficing. We explore the main outlines of decision making under uncertainty. Other topics discussed include research on measuring happiness as an alternative welfare indicator, the problem of moral hazard in the bailouts, the principal-agent problem in industrial organisation, adverse selection in insurance markets, opportunistic behaviour in consumer theory, the new trade theory as it relates to our current account deficits, transaction cost economics, oligopoly, monopolistic competition and Keynesian macroeconomics vs monetarist approaches. The course does not involve mathematics and is not meant to be a substitute for intermediate level economics courses. Rather, the course covers topics that are usually not covered in principles courses but does so at the level of sophistication of a usual principles course. The emphasis is real-world applications rather than model building or theoretical considerations.

Grades will be based on the average grades of the 18 quizzes. Quizzes are all due at the end of the summer session. Each quiz is made up of 20 questions. Letter Grade Distribution will be as follows:

Textbooks: John Komlos, What Every Economics Student Needs to Know and Doesn’t Get in the Usual Principles Text. (Routledge: 2014). Each chapter has a quiz. A few chapters have two quizzes.

Supplementary Readings: See assignments below

Please review the course schedule below: