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Economics

Professors Murray, Williams, Aschauer, Hughes (chair), and Maurer-Fazio; Associate Professors Schwinn and Lewis; Visiting Associate Professors Perkins and Bauer; Assistant Professor Chen; Visiting Assistant Professor Fakhar; Lecturer Farber

Intelligent citizenship makes increasing demands on an individual's knowledge of economics. Policy makers in business, government, and the nonprofit sector must frequently evaluate complex economic issues. The goal of the economics curriculum is to educate students, both majors and nonmajors, about the ideas of economics and how they apply to today's world.

Introductory economics courses at Bates (courses numbered 100–199) emphasize a broad nontechnical understanding of economic institutions, policy, and analysis. Courses numbered between 200 and 249 provide nontechnical introductions to more specialized topics. Courses numbered between 250 and 299 cover intermediate economic theory and introduce students to the methods of empirical analysis. Three-hundred-level courses integrate practical economic issues with empirical and theoretical analyses, enabling students to develop sophisticated insight into both contemporary and historical economic problems. More information on the economics department is available on the Web site (www.bates.edu/ECON.xml).

Cross-listed Courses. Note that unless otherwise specified, when a department/program references a course or unit in the department/program, it includes courses and units cross-listed with the department/program.

Major Requirements. There are five requirements for the economics major:

1) ECON 101, 103, 250, 255, 260, and 270. Selected statistics courses from other departments are acceptable substitutes for ECON 250. A list of these courses appears on the department Web site. At least three of these four 200-level courses must be taken at Bates.

2) MATH 105 or 106 or the equivalent. MATH 105 is a prerequisite for ECON 255, 260, and 270.

3) Three 300-level electives in economics. At least two of these 300-level electives must be taken at Bates.

4) A fourth economics elective, which may be numbered 220–249 or 300–399. The following courses may substitute for a 200-level elective for purposes of the major only:

ANTH 339. Production and Reproduction.
PLTC 222. International Political Economy.
SOC 260. Economic Sociology.

5) ECON 457 or 458. Senior Thesis.

More information about the major is available on the department Web site.

Students planning to study abroad are strongly urged to consult the study-abroad section of the economics department Web site. Most basic questions concerning departmental study-abroad requirements are answered there. Students should then consult with the department chair concerning the acceptability of particular courses for the major.

Because of the numerous, vital, and constantly developing interconnections between economics and other social sciences, economics majors are urged to take as many courses as possible in related disciplines such as anthropology, history, politics, psychology, and sociology.

Pass/Fail Grading Option. Pass/fail grading may not be elected for courses applied toward the major except for Economics 101 and 103.

Secondary Concentration. The department offers a secondary concentration in economics. The secondary concentration consists of seven courses: Economics 101, Principles of Microeconomics; Economics 103, Principles of Macroeconomics; Economics 250, Statistics (or a substitute course from the list on the department Web site); and any four other economics offerings, only one of which may be a Short Term unit.

Pass/Fail Grading Option. Pass/fail grading may not be elected for courses applied toward the secondary concentration except for Economics 101 and 103.

Non-Bates Credit. Students receiving scores of four or five on the Economics AP exam receive credit for Economics 101 or 103. Students receiving a score of four or five on the Statistics AP exam receive credit for Economics 250. A-Level credit: Students receiving a grade of A or B on the A-Level Economics examinations may receive credit for Economics 101 and 103. No credit is given for the O-Level examinations. International Baccalaureate credit: Students receiving a grade of six or seven in the IB HL program may receive credit for Economics 101 and 103. No credit is given for the IB SL program.

Students who have failed a core economics course (ECON 101, 103, 250, 255, 260 or 270) at Bates College may not receive major or secondary concentration credit for an equivalent course taken at another institution.

General Education. Economics 101 and 103, or either 101 or 103 with any course numbered 220–249 may serve as a department-designated set. Advanced Placement, International Baccalaureate, or A-Level credit awarded by the department may be used as the third course. No Short Term units are designated as serving as part of a set or as an option for the third course. The quantitative requirement may be satisfied through Economics 250 or 255.

Courses

ECON 101. Principles of Microeconomics: Prices and Markets.A study of competition and monopoly, antitrust policy and public-utility regulation, determination of wages and other sources of income, income distribution, and pollution and public policy. Enrollment limited to 35. Normally offered every semester. D. Bauer, G. Perkins, Staff.

ECON 103. Principles of Macroeconomics: Income and Employment.A survey of major economic issues in the United States, such as economic growth, employment, and inflation. Students discuss the causes and consequences of fluctuations in income, employment, and inflation, and analyze fiscal and monetary policies designed to correct them. Economics 101 is helpful preparation, but not required. Enrollment limited to 35. Normally offered every semester. W. Chen, A. Fakhar.

ECON 217. Introduction to Accounting.The theory of accounting is presented to the beginner as knowledge fundamental to understanding any business enterprise. The course includes practice with accounting methods and exposure to financial statement relationships. Not open to students who have received credit for Economics s21. Open to first-year students. Enrollment limited to 30. Normally offered every year. B. Farber.

ECON 221. The World Economy.Trends and patterns in international trade and finance are discussed in relation to topics such as trade and growth, tariffs and trade restrictions, economic integration, and international economic cooperation and policy. Not open to students who have received credit for Economics 334. Prerequisite(s): Economics 101 and 103. Offered with varying frequency. W. Chen, Staff.

ECON 222. Environmental Economics.The preservation of environmental quality and the struggle of people to improve their economic circumstances are often in conflict. This course explores the economic basis of environmental problems and examines alternative policies aimed at reducing environmental degradation. Among the topics are the deficiencies in the market system and existing property-rights system that contribute to environmental problems, cases where public intervention offers the potential for improvement, cases amenable to market-based approaches, and the public-policy tools available to promote environmental goals. Prerequisite(s) or corequisite(s): Economics 101. Not open to students who have received credit for Economics s36. Open to first-year students. Enrollment limited to 25. Normally offered every year. L. Lewis.

ECON 223. Law and Economics.This course introduces the use of economic methods to examine laws and legal institutions. The fundamental concepts of economics-scarcity, maximization, and marginal analysis are used to predict the effect of legal rules on behavior, and to evaluate how well a particular rule achieves its intended end. At another level, civil law may be viewed as another system of resource allocation and wealth distribution, as the legal system is often used to craft a remedy when markets fail in their allocative role. Topics may include property law, contract law, accident law, family law, criminal law, and copyright and trademark law. Prerequisite(s): Economics 101. Not open to students who have received credit for Economics s35. Enrollment limited to 20. Offered with varying frequency. J. Hughes.

ECON 228. Antitrust and Regulation.This course analyzes economic-policy issues of government intervention in the private sector through antitrust and regulatory policies. Specific topics examined include theories of monopoly and competition, the evolution of United States antitrust policy, key antitrust issues and cases, regulation of natural monopoly and oligopoly, capture theory, and comparative antitrust and regulatory policies. Prerequisite(s): Economics 101. Open to first-year students. Normally offered every other year. C. Schwinn.

AS/EC 229. Economics of Greater China.The Chinese are among the world's leading experimentalists in economics. The twentieth-century economic history of China, Taiwan, Hong Kong, and the overseas Chinese diaspora spans the entire gamut of economic regimes from virtually unrestricted competition to rigid state management. This course surveys economic development in Greater China with emphasis on understanding how institutions and institutional change affect economic and social development. Prerequisite(s): Economics 101 or 103. Not open to students who have received credit for Economics 229. Open to first-year students. Enrollment limited to 45. Offered with varying frequency. M. Maurer-Fazio.

ECON 230. Economics of Women, Men, and Work.An examination of the changing roles of women and men in the market economy. Introductory topics include the family as an economic unit, discrimination, and occupational segregation. Other topics include the economics of marriage, fertility, divorce, child care, and the growing feminization of poverty. The final section of the course examines the feminist critique of the assumptions and methodology of neoclassical economics, and the potential for incorporating these insights into the practice of economics. Prerequisite(s): Economics 101. Open to first-year students. Enrollment limited to 22. Offered with varying frequency. J. Hughes.

AS/EC 231. The Economic Development of Japan.This course surveys the development of Japan's economy. A brief historical introduction focuses on the preconditions for economic modernization and the role of the government in Japan's late nineteenth- and early twentieth-century experience. The course then concentrates on an overview of Japan's post–World War II experience of recovery, explosive growth, slowdown, and attempted reform. Students consider whether the Japanese economy operates according to principles, objectives, and structures that are substantially different from those of the West. Japan's economic impact on other East Asian countries and relatedness with the world economy are also explored. Prerequisite(s): Economics 101 or 103. Not open to students who have received credit for Economics 231. Open to first-year students. Offered with varying frequency. M. Maurer-Fazio.

ECON 235. Growth, Inequality, and Globalization.Over the past fifty years, economic growth has raised hundreds of millions of people out of poverty, while leaving the lives of additional hundreds of millions untouched or worse. The enormous expansion in world trade since the end of the Cold War has fueled concern about threats to national culture and identity and the homogenization of society. This course introduces students to classical and contemporary economic growth models and measures of income inequality. Students examine elements of trade theory such as comparative advantage, gains from trade, and trade liberalization in order to ascertain whether globalization may threaten economic growth. Prerequisite(s): Economics 101 and 103. Open to first-year students. Enrollment limited to 22. Offered with varying frequency. Staff.

ECON 250. Statistics.Topics include probability theory, sampling theory, estimation, hypothesis testing, and linear regression. Prospective economics majors should take this course in or before the fall semester of the sophomore year. Open to first-year students. Enrollment limited to 36. Normally offered every semester. A. Williams.

ECON 255. Econometrics.Topics include multiple regression using time series and cross-sectional data, simultaneous equation models, and an introduction to forecasting. Prerequisite(s): Economics 250 and Mathematics 105. Normally offered every semester. C. Schwinn.

ECON 260. Intermediate Microeconomic Theory.Compares models of perfect competition and market failure, with emphasis on the consequences for efficiency and equity. Topics include consumer choice, firm behavior, markets for goods and inputs, choice over time, monopoly, oligopoly, monopolistic competition, externalities, and public goods. Prerequisite(s): Economics 101 and Mathematics 105. Normally offered every semester. J. Hughes.

ECON 270. Intermediate Macroeconomic Theory.This study of national income determination includes movements involving consumption, saving, investment, demand for money, supply of money, interest rates, price levels, wage rates, and unemployment. Monetary policy, fiscal policy, inflation, and growth models are considered. Prerequisite(s): Economics 101 and 103 and Mathematics 105. Enrollment limited to 24 per section. Normally offered every semester. D. Aschauer, W. Chen.

ECON 309. Economics of Less-Developed Countries.The course examines the causes of the poverty of nations, various potential paths to economic growth, and the effects of policies of the rich countries on less-developed countries. Included are such topics as industrialization, the "green revolution," population growth, environmental degradation, trade policies, debt, multinational corporations, and foreign aid. The development of individual countries is examined in light of the great diversity of experiences among developing economies. Prerequisite(s): Economics 255, 260, and 270. Offered with varying frequency. M. Maurer-Fazio, Staff.

ECON 310. Economics of Not-for-Profit Firms.This course studies the not-for-profit (NFP) firm as an institutional form that society has used in response to market failures, such as those caused by the presence of jointly consumed goods, asymmetric information, or principal-agent problems. Examples are taken from industries where the NFP form is prevalent: health care, education, museums, performing arts, and public radio and television. Issues related to the financing of NFPs, including their capital structure and their reliance on donations as opposed to commercial revenues, are also explored. Prerequisite(s): Economics 255 and 260. Enrollment limited to 20. Offered with varying frequency. G. Perkins.

ECON 311. Public Economics.An analysis of basic issues in the field of public finance. The course covers a wide range of topics, including the welfare implications of expenditure and taxation policies of governments, the economic rationale of governmental provision of goods and services, fiscal institutions in the United States, efficiency and distributive aspects of taxation, effects of taxation on household and firm behavior, intergovernmental fiscal relations, and the public debt. Prerequisite(s): Economics 255, 260, and 270. Normally offered every other year. M. Murray.

ECON 318. Advanced Macroeconomics.Theories and empirical studies of business cycles: fixed-investment behavior, inventory activity, and monetary fluctuations. The course examines recent work on inflation, expectations, economic growth theory, and techniques in current use for forecasting general economic activity. Prerequisite(s): Economics 255 and 270. Normally offered every other year. D. Aschauer, Staff.

ECON 320. Advanced Econometrics.Econometric estimation techniques beyond least squares, including instrumental variables, maximum likelihood, the generalized method of moments, and both nonparametric and simulation methods are introduced. Models for panel data, stochastically trending variables, and limited dependent variables are also discussed. Students' choice of projects determines which topics are considered in detail. Prerequisite(s): Economics 255. Enrollment limited to 22. Offered with varying frequency. M. Murray.

ECON 321. Monetary Policy and Financial Markets.An analysis of money supply, money demand, alternative theories of the monetary mechanism, central banking, and the conduct of monetary policy. Prerequisite(s): Economics 255 and 270. Normally offered every year. D. Aschauer, Staff.

ECON 324. Corporate Finance.The cost of capital, dividend policy, security valuation, portfolio theory, capital budgeting, and the efficient-markets hypothesis are among the topics investigated. Emphasis is on the testing of hypotheses derived from economic theory. Prerequisite(s): Economics 255 and 260. Normally offered every year. C. Schwinn.

ECON 325. Prices, Property, and the Problem of the Commons.An analysis of water resources and fisheries economics. Topics include water allocation, scarcity and pricing, water rights, cost-benefit analysis, valuation, water markets, and problems related to common-property resources such as underground aquifers and fisheries. Economic incentives for pollution control including tradable pollution permit programs for water quality maintenance are also covered. Prerequisite(s): Economics 250, 255, and 260. Enrollment limited to 25. Normally offered every year. L. Lewis, Staff.

ECON 331. Labor Economics.A study of human resources and the labor market. Topics include racial and sexual discrimination, theories of unemployment and job search, income distribution and poverty, Becker's new household economics, unions and collective bargaining, and government intervention in the labor market. Prerequisite(s): Economics 255 and 260. Enrollment limited to 25. Normally offered every other year. J. Hughes.

ECON 333. International Trade.Classical and modern theories of international trade analyzed in light of current trends and patterns in the world economy. Attention is focused on the gains from trade, the impact of tariffs and other types of trade restrictions on national economic welfare, the trade problems of less-developed countries, and the theory of economic integration. Prerequisite(s): Economics 255 and 260. Offered with varying frequency. Staff.

ECON 334. International Macroeconomics.Study of the impact of international trade; international capital movements; and balance of payments policies on domestic output, employment, and price levels. Prerequisite(s): Economics 255 and 270. Enrollment limited to 30. Offered with varying frequency. D. Aschauer, Staff.

ECON 339. Industrial Organization.Theories of the firm are used to explain the organization of economic activity across markets and within firms. The effects of pricing behavior, merger activity, advertising, and research and development on efficiency and social welfare are examined. Prerequisite(s): Economics 255 and 260. Normally offered every other year. C. Schwinn.

ECON 348. Urban Economics.Microeconomic tools are applied to analyze cities. Among the topics are the spatial structure of cities, trends in urban development in the United States, urbanization and African development, industrial and residential location choices, rent control, housing subsidies, squatter settlements, racial segregation, and urban finance. Prerequisite(s): Economics 255 and 260. Normally offered every other year. M. Murray.

ECON 349. The Economics of Taxation.Governments finance their activities by taxing or borrowing. Do taxes promote economic efficiency? Are taxes fair? In this context and with a focus on the U.S tax structure, students examine taxes on personal and corporate income as well as taxes on consumption and wealth, considering these questions: Should we repeal the "death" tax? Should we reduce taxes on capital gains? Should we eliminate double taxation on dividends? Should we replace our income tax with a flat tax plus a negative-income tax? Would a value-added tax be better than an income tax? Are deficits a tax on future generations? Prerequisite(s): Economics 255, 260, and 270. G. Perkins.

ECON 360. Independent Study.Students, in consultation with a faculty advisor, individually design and plan a course of study or research not offered in the curriculum. Course work includes a reflective component, evaluation, and completion of an agreed-upon product. Sponsorship by a faculty member in the program/department, a course prospectus, and permission of the chair are required. Students may register for no more than one independent study per semester. Normally offered every semester. Staff.

ECON 457. Senior Thesis.Prior to entrance into Economics 457, students must submit for approval a thesis proposal based on work done in a nonintroductory course. Economics 457 is for fall theses and Economics 458 is for winter theses. Honors thesis writers enroll for both Economics 457 and Economics 458. Prerequisite(s): at least two 300-level economics courses. Normally offered every year. Staff.

ECON 457, 458. Senior Thesis.Prior to entrance into Economics 457, students must submit for approval a thesis proposal based on work done in a nonintroductory course. Economics 457 is for fall theses and Economics 458 is for winter theses. Honors thesis writers enroll for both Economics 457 and Economics 458. Prerequisite(s): at least two 300-level economics courses. Normally offered every year. Staff.

ECON 458. Senior Thesis.Prior to entrance into Economics 457, students must submit for approval a thesis proposal based on work done in a nonintroductory course. All majors take Economics 457; honors candidates take Economics 458 after completing Economics 457. Prerequisite(s): at least two 300-level economics courses. Department chair permission is required. Normally offered every year. Staff.

Short Term Courses

EC/SO s19. Issues for a United Europe in the Twenty-First Century.As European integration deepens, issues related to governance, economic life, and identity emerge. A united Europe requires common political, economic, and cultural systems. This unit examines the nature, limitations, potential, and legitimacy of those systems, by providing firsthand visits to key countries, institutions, and associations. Students visit Brussels, Paris, London, Copenhagen, and Barcelona. Different cities offer different opportunities to investigate political, economic, or cultural systems. Enrollment limited to 15. Instructor permission is required. Offered with varying frequency. F. Duina.

ECON s21. Principles and Applications of Accounting.An introduction to the concepts and uses of accounting utilizing case studies. Emphasis is on the accounting cycle, construction and analysis of financial statements, asset valuation, and corporate accounting. Not open to students who have received credit for Economics 217. Enrollment limited to 30. Normally offered every year. B. Farber.

EC/ES s27. Sustaining the Masses.Students in this unit investigate the contradictions and complementarities between economic development and global economic integration on the one hand and environmental protection on the other. Students spend up to four weeks in China visiting farming communities, large- and small-scale industrial enterprises, reforestation sites, nature reserves, and pollution control facilities. They also meet with villagers, workers, and government officials. Linkages between local and international economics, politics, history, culture, and the environment are explored using China as a case study. Recommended background: one or more of the following: Economics 101, 222, 227, 229; Environmental Studies 202. Open to first-year students. Enrollment limited to 10. Instructor permission is required. Offered with varying frequency. M. Maurer-Fazio, J. Hughes.

ECON s31. Economic Growth and Productivity Enhancement.An intensive study of economic growth from theoretical and empirical perspectives, including the Solow growth model, the Ramsey optimizing model, and theories emphasizing imperfect competition and increasing returns to scale. This unit examines empirical studies of economic growth and factors found to be important determinants of growth in real output, with particular emphasis on productivity growth. Prerequisite(s): Economics 255 and 270. Not open to students who have received credit for Economics 235. Enrollment limited to 15. Offered with varying frequency. D. Aschauer.

EC/ES s33. Valuation of Human-Altered Ecosystems.How is the value of an ecosystem altered by human development? Answering this question requires an understanding of both economics and ecosystem structure and function. In this interdisciplinary unit, students explore the structure and function of ecosystems before and after human modification and the relationship of these characteristics to their economic value. Students focus on river systems in Maine from source to sea. This unit involves many day trips and two longer trips off campus. Prerequisite(s): Environmental Studies 203 or Economics 222. Enrollment limited to 12. Instructor permission is required. Offered with varying frequency. H. Ewing, L. Lewis.

ECON s34. Democratic Enterprises and Corporate Governance.Democratic decision making, involving all the employees of a firm, represents a form of corporate governance that seems natural in a democratic society. Why, then, are so few firms governed in this manner? After examining democratically managed firms in the former Yugoslavia, firms in the Mondragón community of Spain, and plywood cooperatives in the Pacific Northwest, this unit explores the economic incentives and political forces that have shaped the dominant, nondemocratic form of corporate governance found in democratic societies. Prerequisite(s): Economics 101 and 103. Open to first-year students. Offered with varying frequency. C. Schwinn.

ECON s50. Independent Study.Students, in consultation with a faculty advisor, individually design and plan a course of study or research not offered in the curriculum. Course work includes a reflective component, evaluation, and completion of an agreed-upon product. Sponsorship by a faculty member in the program/department, a course prospectus, and permission of the chair are required. Students may register for no more than one independent study during a Short Term. Normally offered every year. Staff.