Department of Economics - Massachusetts Institute of ...catalog.mit.edu/...social.../economics/economics.pdf · DEPARTMENT OF ECONOMICS DEPARTMENT OF ECONOMICS Economics is the study

DEPARTMENT OF ECONOMICS


Economics is the study of all those aspects of individual andsocial activities related to the choice, production, distribution,and consumption of goods and services. In relation to thesedecisions, economics is concerned with the behavior andinteraction of individuals, private rms, and other institutions andgovernment agencies. Economics contributes to the understandingof many important social problems: changes in eciency andproductivity, fluctuations in the overall levels of economic activityand employment, inflation, the eects of government decits, thegrowth and decline of industries, changes in foreign exchange rates,increases in international indebtedness, and the behavior of thecentrally planned and less developed countries.

Subjects are oered in the major areas of economics: theoretical andapplied analysis at the levels of the individual consumer, the rm,and the industry, as well as aggregate economic activity, industrialorganization and health economics, econometrics, public nance,energy economics, labor economics, game theory, internationaltrade and nance, economic history, economic development, andpolitical economy.

Undergraduate Study

Bachelor of Science in Economics (Course 14-1)Course 14-1, leading to the Bachelor of Science in Economics (http://catalog.mit.edu/degree-charts/economics-course-14), combinestraining in technical economics with opportunities for a broad andbalanced undergraduate education. Students may choose from adiversied group of undergraduate subjects and are encouraged toengage in independent research.

The aims of the SB in Economics degree program are threefold: togive students a rm grounding in modern economic theory and abasic understanding of economic processes; to provide a descriptiveknowledge of the US and world economies; and to develop instudents the capabilities for quantitative analysis and independentthought. These aims correspond roughly to the requirementsin the Course 14-1 program of theory, electives, statistics andeconometrics, and research.

The requirements allow substantial freedom for students indesigning individual programs within economics and balancingthe programs with subjects in other disciplines. The large amountof unrestricted elective time encourages students to shapeprograms close to their own needs and interests. Students mayselect programs that concentrate on economics and other socialsciences or may combine economics with other elds. They mayemphasize the relation of economics and technology by choosingtheir free electives in engineering and science, or they may combine

their studies in economics with subjects in history and the otherhumanities.

The successful completion of the degree program preparesstudents for further study in economics or for careers in businessadministration and nance, consulting, law and related elds, andpublic policy.

Although there are several satisfactory alternative subjectsequences, students who by the end of their second year havetaken 14.01 Principles of Microeconomics and 14.02 Principles ofMacroeconomics can follow a program that permits considerabledepth in electives in their third and fourth years. With thatpreparation, students can complete an intermediate microsubject, 14.05 Intermediate Macroeconomics or 14.18 MathematicalEconomic Modeling, 14.30 Introduction to Statistical Methods inEconomics, and 14.32 Econometric Data Science in the third year.This program satises the prerequisites for all subjects (including14.33 Research and Communication in Economics: Topics, Methods,and Implementation) and prepares students for research on theirthesis and in other elective subjects. The department stronglyrecommends that students take additional subjects in mathematicsif professionally interested in economics.

Bachelor of Science in Mathematical Economics (Course 14-2)The SB in Mathematical Economics (http://catalog.mit.edu/degree-charts/mathematical-economics-course-14-2) is designed forstudents who desire a deeper mathematical foundation than thatprovided by the SB in Economics, and allows them to concentrate ina subset of economics subjects, typically those more oriented towardmicroeconomics or technical subjects. Course 14-2 majors will gainthe strong mathematical and theoretical preparation needed forsubsequent graduate study in economics. This program is well suitedto students interested in game theory, other types of microeconomictheory, and econometrics.

Students majoring in Mathematical Economics are required tosuccessfully complete the most important introductory courses ineconomics before undertaking more technical and mathematicalstudies in economics. Substantial coursework in mathematics isrequired, including 18.100x Real Analysis, a choice between 18.06Linear Algebra or 18.03 Dierential Equations, and at least oneelective in mathematics.

Bachelor of Science in Computer Science, Economics, and DataScience (Course 6-14)Contemporary electronically mediated platforms for market-leveland individual exchange combine complex human decisions withintensive computation and data processing, all interacting withinan engineered economic environment. Examples include: onlinemarkets, crowdsourcing platforms, spectrum auctions, nancialplatforms, crypto currencies, and large scale matching/allocationsystems such as kidney exchange and public school choice systems.These platforms encompass a growing slice of economic activityand are shiing the scope and eciency of market and non-market

Department of Economics | 3


exchanges. Some forms of exchange that were simply infeasibledue to coordination or information frictions (centralized kidneyexchange, vehicle sharing) are suddenly available and important.Other market activities that were previously thought to requirecentralization and oversight, can now be decentralized and self-regulated (crypto-currency being the leading example). Moreover,the technology enabling that decentralization (so-called blockchain)is likely to have many further applications.

The Bachelor of Science in Computer Science, Economics andData Science (Course 6-14) (http://catalog.mit.edu/degree-charts/computer-science-economics-data-science-course-6-14) is aimed ateducating students at this intellectual nexus and equipping themwith a foundational knowledge of economic analysis, computing,optimization and data science, as well as hands-on experience withempirical analysis of economic data, to identify, analyze and solvereal-world challenges in real and virtual settings.

Minor in EconomicsThe objective of the minor is to extend the understanding ofeconomic issues beyond the level of the concentration. This is donethrough specialized analytical subjects and elective subjects thatprovide an extensive treatment of economic issues in particularareas.

The Minor in Economics consists of six subjects arranged into threelevels of study:

Tier I14.01 Principles of Microeconomics 1 1214.02 Principles of Macroeconomics 1 1214.30 Introduction to Statistical Methods in

Economics12

or 18.05 Introduction to Probability and StatisticsTier IISelect one of the following: 12

14.03 Microeconomic Theory and PublicPolicy

14.04 Intermediate Microeconomic Theory14.05 Intermediate Macroeconomics

Tier IIISelect two elective subjects in applied economics. 2 24

Total Units 72

1 Under no circumstances may a student complete a minor with fewer thansix subjects. Any student who receives permission from the EconomicsDepartment to skip 14.01 and/or 14.02 in order to take a higher-levelsubject must take a replacement subject for each subject that is skipped.

2 See the department's website (http://economics.mit.edu/under/minors)for a list of available subjects.

Graduate Study

Admission Requirements for Graduate StudyThe Department of Economics species the following prerequisitesfor graduate study in economics: one full year of collegemathematics and an appreciable number of professional subjectsin economics for those qualied students who have majored inelds other than economics. Applicants for admission who havedeciencies in entrance requirements should consult with thedepartment about programs to remedy such decits.

Master of Science in EconomicsUnder special circumstances, admission may be granted to currentMIT students seeking the Master of Science degree. The generalrequirements for the SM are given in the section on GraduateEducation (http://catalog.mit.edu/mit/graduate-education).

Master of Applied Science in Data, Economics, and DevelopmentPolicyThe blended Master of Applied Science in Data, Economics, andDevelopment Policy (http://catalog.mit.edu/degree-charts/master-applied-data-economics-development-policy) is anintensive program consisting of a series of nine subjects and threeseminars plus a capstone experience (a summer internship and acorresponding project report). Students will gain a strong foundationin microeconomics, development economics, probability, andstatistics; engage with cutting-edge research; and develop practicalskills in data analysis and the evaluation of social programs. Onlystudents who have successfully completed the MITx MicroMasterscredential in Data, Economics and Development are eligible to applyto the on-campus Master’s program.

For more information, please visit the website (https://micromasters.mit.edu/dedp/blended-masters-program) or [email protected].

Doctor of PhilosophyA candidate for the doctorate must demonstrate a masteryof economic theory, including both microeconomics andmacroeconomics, and four elds of study; achieve a speciedlevel of competence in econometrics; submit and defend adissertation that represents a contribution to knowledge; and bein residence for a minimum of two years. Two of the four eldsare covered by the written General Examination. Two minor eldsmay each be satised by one year of coursework. The four majorand minor elective elds may be chosen from advanced economictheory, econometrics, economic development, nance, industrialorganization, international economics, labor economics, monetaryeconomics, organizational economics, political economy, and publiceconomics.

There is no required minimum number of graduate subjects in thedepartment. However, candidates ordinarily need two full academic

4 | Department of Economics


years of study to prepare adequately for the General Examinationsand to meet the other pre-thesis requirements. The doctoral thesismust be written in residence, which typically requires three years ofresearch.

Interdisciplinary Program

Economics and StatisticsThe Interdisciplinary Doctoral Program in Statistics providestraining in statistics, including classical statistics and probabilityas well as computation and data analysis, to students who wishto integrate these valuable skills into their primary academicprogram. The program is administered jointly by the departmentsof Aeronautics and Astronautics, Economics, Mathematics, andPolitical Science, and the Statistics and Data Science Center withinthe Institute for Data, Systems, and Society. It is open to currentdoctoral students in participating departments, who may apply toenroll in the program at any time aer the end of their rst year.For more information, see the full program description (http://catalog.mit.edu/interdisciplinary/graduate-programs/phd-statistics)under Interdisciplinary Graduate Programs.

Financial SupportA limited number of students are supported by scholarshipand fellowship grants, as well as by teaching and researchassistantships.

InquiriesFor more information regarding admissions or nancial aid,contact Julia Martyn-Shah ([email protected]), 617-253-8787. Forundergraduate admissions and academic programs, contact GaryKing ([email protected]), 617-253-0951. For any other information,contact Kelly Tyman ([email protected]), 617-253-3807.

Faculty and Teaching Sta

Nancy L. Rose, PhDCharles P. Kindleberger Professor of Applied EconomicsProfessor of EconomicsHead, Department of Economics

Jonathan Gruber, PhDFord ProfessorProfessor of EconomicsAssociate Head, Department of Economics

ProfessorsAlberto Abadie, PhDProfessor of EconomicsAssociate Director, Institute for Data, Systems, and Society

Daron Acemoglu, PhDInstitute ProfessorProfessor of EconomicsMember, Institute for Data, Systems, and Society

George-Marios Angeletos, PhDProfessor of Economics

Joshua Angrist, PhDFord ProfessorProfessor of Economics

David Atkin, PhDProfessor of Economics

David H. Autor, PhDFord ProfessorProfessor of Economics

Abhijit Banerjee, PhDFord International ProfessorProfessor of Economics

Ricardo J. Caballero, PhDFord International ProfessorProfessor of Economics

Victor V. Chernozhukov, PhDFord International ProfessorProfessor of EconomicsMember, Institute for Data, Systems, and Society(On leave)

Arnaud Costinot, PhDProfessor of Economics

David J. Donaldson, PhDProfessor of Economics

Esther Duflo, PhDAbdul Latif Jameel Professor in Poverty Alleviation and Development

EconomicsMember, Institute for Data, Systems, and Society

Glenn Ellison, PhDGregory K. Palm (1970) ProfessorProfessor of Economics

Amy Finkelstein, PhDJohn and Jennie S. MacDonald ProfessorProfessor of Economics

Drew Fudenberg, PhDPaul A. Samuelson ProfessorProfessor of Economics



Robert S. Gibbons, PhDSloan Distinguished Professor of ManagementProfessor of Applied Economics

Jerey E. Harris, MD, PhDProfessor of Economics(On leave, fall)

Bengt Holmström, PhDPaul A. Samuelson ProfessorProfessor of EconomicsProfessor of Applied Economics

Paul L. Joskow, PhDElizabeth and James Killian Professor of Economics and ManagementProfessor Post-Tenure of Economics

Stephen Morris, PhDProfessor of Economics

Whitney K. Newey, PhDFord ProfessorProfessor of Economics

Benjamin A. Olken, PhDProfessor of Economics

Parag Pathak, PhDJane Berkowitz Carlton and Dennis William Carlton Professor of

MicroeconomicsProfessor of Economics

James M. Poterba, PhDMitsui Professor in Problems of Contemporary TechnologyProfessor of Economics

Drazen Prelec, PhDDigital Equipment Corp. Leaders for Global Operations Professor of

ManagementProfessor of Marketing and Management ScienceProfessor of EconomicsProfessor of Brain and Cognitive Sciences

Robert Townsend, PhDElizabeth and James Killian (1926) ProfessorProfessor of Economics

John Van Reenen, PhDGordon Y Billard Professor in Management and EconomicsProfessor of Applied EconomicsProfessor of Economics

Ivan Werning, PhDRobert M. Solow ProfessorProfessor of Economics

Michael Whinston, PhDSociety of Sloan Fellows Professor of ManagementProfessor of EconomicsProfessor of Applied Economics(On leave)

Muhamet Yildiz, PhDProfessor of Economics

Associate ProfessorsNikhil Agarwal, PhDAssociate Professor of Economics

Anna Mikusheva, PhDAssociate Professor of Economics

Alp Simsek, PhDRudiger Dornbusch Career Development ProfessorAssociate Professor of Economics

Alexander Greenberg Wolitzky, PhDAssociate Professor of Economics

Assistant ProfessorsClare Balboni, PhD3M Career Development Professor of Environmental EconomicsAssistant Professor of Economics

Martin Beraja, PhDPentti Kouri Career Development ProfessorAssistant Professor of Economics

Simon Jaeger, PhDSilverman (1968) Family Career Development ProfessorAssistant Professor of Economics(On leave)

Tobias Salz, PhDAssistant Professor of Economics

Frank Schilbach, PhDGary Loveman Career Development ProfessorAssistant Professor of Economics

Visiting ProfessorsElias Papaioannou, PhDHal Varian Visiting Professor of Economics

Visiting Assistant ProfessorsLeonardo Bursztyn, PhDVisiting Assistant Professor of Economics

Federico Esposito, PhDVisiting Assistant Professor of Economics



Annie Liang, PhDVisiting Assistant Professor of Economics

Natalia Zinovyeva, PhDYrjo Jahnsson FellowVisiting Assistant Professor of Economics

Senior LecturersSara F. Ellison, PhDSenior Lecturer in Economics

Professors Emeriti

Olivier Jean Blanchard, PhDRobert M. Solow Professor EmeritusProfessor Emeritus of Economics

Peter A Diamond, PhDInstitute Professor EmeritusProfessor Emeritus of Economics

Richard S. Eckaus, PhDFord International Professor EmeritusProfessor Emeritus of Economics

Stanley Fischer, PhDProfessor Emeritus of Economics

Jerry A. Hausman, PhDJohn and Jennie S. MacDonald Professor EmeritusProfessor Emeritus of Economics

Michael J. Piore, PhDDavid W. Skinner Professor EmeritusProfessor Emeritus of Political EconomyProfessor Emeritus of Political Science

Richard Schmalensee, PhDHoward W. Johnson Professor EmeritusProfessor Emeritus of ManagementProfessor Emeritus of Economics

Robert M. Solow, PhDInstitute Professor EmeritusProfessor Emeritus of Economics

Peter Temin, PhDElisha Gray II Professor EmeritusProfessor Emeritus of Economics

William C. Wheaton, PhDProfessor Emeritus of Urban Studies and PlanningProfessor Emeritus of Economics

General Economics and Theory

14.00 Undergraduate Internship in EconomicsPrereq: Permission of instructorU (IAP, Summer)Units arranged [P/D/F]Can be repeated for credit.

For Course 14 students participating in o-campus internshipexperiences in economics. Before registering for this subject,students must have an employment oer from a company ororganization and must identify a Course 14 supervisor. Uponcompletion of the internship, student must submit a letter fromthe employer describing the work accomplished, along with asubstantive nal report from the student approved by the MITsupervisor. Subject to departmental approval. Consult departmentalundergraduate oce.Consult D. Donaldson

14.000 Graduate Internship in EconomicsPrereq: Permission of instructorG (IAP, Summer)Units arranged [P/D/F]Can be repeated for credit.

For Course 14 students participating in o-campus internshipexperiences in economics. Before registering for this subject,students must have an employment oer from a company ororganization and must identify a Course 14 supervisor. Uponcompletion of the internship, student must submit a letter fromthe employer describing the work accomplished, along with asubstantive nal report from the student approved by the MITsupervisor. Subject to departmental approval. Consult departmentalgraduate oce.Consult R. Caballero

14.001 Data Economics and Development Policy SummerInternshipPrereq: Permission of departmentG (Summer)0-1-0 units

Provides students in the blended DEDP Master's program theopportunity to synthesize their coursework and professionalexperience in development economics and data analysis. In thecontext of a summer internship, students apply the knowledgegained in the program towards a project with a host organization,typically in the development sector. Students will be supported innding a suitable opportunity or research project. All internshipplacements are subject to approval by the program director. Eachstudent must write a capstone project report. Restricted to blendedDEDP MASc students.E. Duflo



14.003 Microeconomic Theory and Public PolicySubject meets with 14.03Prereq: 14.01 or permission of instructorG (Fall, Spring)4-0-8 units

Applies microeconomic theory to analysis of public policy. Buildsfrom microeconomic model of consumer behavior; extends tooperation of single and multiple markets and analysis of whymarkets sometimes fail. Empirical examples to evaluate theory,focusing on the casual eects of policy interventions on economicoutcomes. Topics include minimum wages and employment,food stamps and consumer welfare, economics of risk and safetyregulation, the value of education, and gains from internationaltrade. Graduate students are expected to complete additionalassignments.D. Autor, N. Agarwal

14.009 Economics and Society's Toughest Problems (New)Prereq: NoneU (Fall)1-0-2 units

Should we trade more with China? Why are some countries poor, andsome countries rich? Why are the 1% getting richer? Should the UShave universal health insurance? How can you x failing schools?What should we do to prevent the next Great Recession? Economicsshows you how to think about some of the toughest problems facingsociety -- and how to use data to get some answers. This exploratorycourse will feature a series of lectures by MIT's economics faculty,showing how their cutting-edge research can help you answer thesequestions and more. Subject can count toward the 9-unit discovery-focused credit limit for rst year students.B. Olken

14.01 Principles of MicroeconomicsPrereq: NoneU (Fall, Spring)3-0-9 units. HASS-S

Introduces microeconomic concepts and analysis, supply anddemand analysis, theories of the rm and individual behavior,competition and monopoly, and welfare economics. Applications toproblems of current economic policy.J. Gruber, S. Ellison

14.02 Principles of MacroeconomicsPrereq: NoneU (Fall, Spring)3-0-9 units. HASS-S

Provides an overview of macroeconomic issues including thedetermination of national income, economic growth, unemployment,inflation, interest rates, and exchange rates. Introduces basicmacroeconomic models and illustrates key principles throughapplications to the experience of the US and other economies.Explores a range of current policy debates, such as the economiceects of monetary and scal policy, the causes and consequencesof the 2008 global nancial crisis, and the factors that influencelong-term growth in living standards. Lectures are recorded andavailable for students with scheduling conflicts.M. Beraja, R. Caballero

14.03 Microeconomic Theory and Public PolicySubject meets with 14.003Prereq: 14.01 or permission of instructorU (Fall, Spring)4-0-8 units. HASS-S

Applies microeconomic theory to analysis of public policy. Buildsfrom microeconomic model of consumer behavior; extends tooperation of single and multiple markets and analysis of whymarkets sometimes fail. Empirical examples to evaluate theory,focusing on the casual eects of policy interventions on economicoutcomes. Topics include minimum wages and employment,food stamps and consumer welfare, economics of risk and safetyregulation, the value of education, and gains from internationaltrade.T. Salz, N. Agarwal

14.04 Intermediate Microeconomic TheoryPrereq: Calculus II (GIR) and 14.01U (Fall)4-0-8 units. HASS-S

Analysis of consumer and producer decisions including analysisof competitive and monopolistic markets. Price-based partialand general equilibrium analysis. Introduction to game theoryas a foundation for the strategic analysis of economic situations.Imperfect competition, dynamic games among rms. Failures ofgeneral equilibrium theory and their resolutions: externalities,public goods, incomplete information settings, signaling, screening,insurance, alternative market mechanisms, auctions, design ofmarkets.R. Townsend



14.05 Intermediate MacroeconomicsPrereq: 14.01 and (14.02 or permission of instructor)U (Spring)4-0-8 units. HASS-S

Uses the tools of macroeconomics to investigate variousmacroeconomic issues in depth. Topics range from economic growthand inequality in the long run to economic stability and nancialcrises in the short run. Surveys many economic models used today.Requires a substantial research paper on the economics of long-runeconomic growth.A. Simsek

14.06 Advanced MacroeconomicsPrereq: 14.01 and 14.02U (Spring)4-0-8 units. HASS-S

Blends a thorough study of the theoretical foundations of modernmacroeconomics with a review of useful mathematical tools,such as dynamic programming, optimal control, and dynamicsystems. Develops comfort with formal macroeconomic reasoningand deepens understanding of key macroeconomic phenomena,such as business cycles. Goes on to study more specic topics,such as unemployment, nancial crises, and the role of scal andmonetary policy. Special attention to reviewing relevant facts anddisentangling them from their popular interpretations. Uses insightsand tools from game theory. Includes applications to recent andhistorical events.G. M. Angeletos

14.07 Financial Markets and the MacroeconomyPrereq: 14.01 and 14.02U (Fall)4-0-8 units. HASS-S

Analyzes the macroeconomic eects of nancial markets, withemphasis on understanding nancial crises. Surveys the benchmarktheories of asset pricing, investment, and the capital structure.Topics include risk, arbitrage, nancial market equilibrium, andmarket eciency. Also introduces nancial frictions, and analyzesthe mechanisms by which frictions cause nancial crises; focuseson asymmetric information, leverage, nancial intermediation,belief disagreements, asset bubbles, re sales, bank runs,interconnections, and complexity.A. Simsek

14.08 Technical Topics in EconomicsPrereq: 14.01U (Fall, Spring)4-0-8 unitsCan be repeated for credit.

Considers technical issues of current research interest in economics.Consult Department Headquarters

14.09 Reading Seminar in EconomicsPrereq: 14.04 and 14.06U (Fall, IAP, Spring, Summer)Units arranged [P/D/F]Can be repeated for credit.

Reading and discussion of particular topics in economics. Opento undergraduate students by arrangement with individual facultymembers. Consult Department Headquarters.D. Donaldson

14.10 Reading Seminar in EconomicsPrereq: 14.04 and 14.06U (Fall, IAP, Spring, Summer)Units arrangedCan be repeated for credit.

Reading and discussion of particular topics in economics. Opento undergraduate students by arrangement with individual facultymembers. Consult Department Headquarters.D. Donaldson

14.11 Topics in EconomicsPrereq: 14.01U (Fall)Not oered regularly; consult department4-0-8 units. HASS-SCan be repeated for credit.

Considers issues of current research interest in economics.Consult Department Headquarters

14.12 Economic Applications of Game TheoryPrereq: 14.01 and (6.041B or permission of instructor)U (Fall)4-0-8 units. HASS-S

Analysis of strategic behavior in multi-person economic settings.Introduction to solution concepts, such as rationalizability,backwards induction, Nash equilibrium, subgame-perfectequilibrium, and sequential equilibrium, with a strong emphasison the assumptions behind these solution concepts. Issues ofincomplete information, such as signaling and reputation formation.Applications drawn from microeconomics and political economy.M. Yildiz



14.121 Microeconomic Theory IPrereq: 14.04 and permission of instructorG (Fall; rst half of term)3-0-3 units

Covers consumer and producer theory, markets and competition,general equilibrium and the welfare theorems; featuringapplications, uncertainty, identication and restrictions modelsplace on data. Enrollment limited; preference to PhD students.P. Pathak

14.122 Microeconomic Theory IIPrereq: 14.121 and permission of instructorG (Fall; second half of term)3-0-3 units

Introduction to game theory. Topics include normal form andextensive form games, and games with incomplete information.Enrollment limited.G. Ellison

14.123 Microeconomic Theory IIIPrereq: 14.121, 14.122, and permission of instructorG (Spring; rst half of term)3-0-3 units

Models of individual decision-making under certainty anduncertainty. Additional topics in game theory. Enrollment limited.D. Fudenberg

14.124 Microeconomic Theory IVPrereq: 14.123 or permission of instructorG (Spring; second half of term)3-0-3 units

Introduction to statistical decision theory, incentive contracting(moral hazard and adverse selection), mechanism design andincomplete contracting. Enrollment limited.A. Wolitzky

14.125 Market DesignPrereq: 14.124G (Spring)4-0-8 units

Theory and practice of market design, building on ideas frommicroeconomics, game theory and mechanism design. Prominentcase studies include auctions, labor markets, school choice,prediction markets, nancial markets, and organ exchangeclearinghouses.P. Pathak

14.126 Game TheoryPrereq: 14.122G (Spring)3-0-9 units

Rigorous investigation of the evolutionary and epistemic foundationsof solution concepts, such as rationalizability and Nash equilibrium.Covers classical topics, such as repeated games, bargaining,reputation, and supermodular games as well as new topics suchas global games, heterogeneous priors, psychological games, andgames without expected utility maximization. Applications providedwhen available.D. Fudenberg, M. Yildiz

14.129 Advanced Contract TheoryPrereq: 14.121, 14.281, or permission of instructorG (Spring; rst half of term)3-0-3 units

Recent developments in contract theory. Includes advancedmodels of moral hazard, adverse selection, mechanism designand incomplete contracts with applications to theory of the rm,organizational design, and nancial structure.Consult R. Townsend

14.13 Psychology and EconomicsSubject meets with 14.131Prereq: 14.01U (Spring)4-0-8 units. HASS-S

Introduces the theoretical and empirical literature of behavioraleconomics. Examines important and systematic departures fromthe standard models in economics by incorporating insights frompsychology and other social sciences. Covers theory and evidenceon time, risk, and social preferences; beliefs and learning; emotions;limited attention; and frames, defaults, and nudges. Studiesapplications to many dierent areas, such as credit card debt,procrastination, retirement savings, addiction, portfolio choice,poverty, labor supply, happiness, and government policy. Studentsparticipate in surveys and experiments in class, review evidencefrom lab experiments, examine how the results can be integratedinto models, and test models using eld and lab data. Studentstaking graduate version complete additional assignments.F. Schilbach



14.130 Reading Economic TheoryPrereq: 14.121 and 14.451Acad Year 2019-2020: Not oeredAcad Year 2020-2021: G (Fall)2-0-10 unitsCan be repeated for credit.

Class will read and discuss current research in economic theory witha focus on game theory, decision theory, and behavioral economics.Students will be expected to make one presentation and to readand post comments on every paper by the day before the paper ispresented. Permission of the instructor required, and auditors arenot allowed.D. Fudenberg

14.131 Psychology and EconomicsSubject meets with 14.13Prereq: 14.01G (Spring)4-0-8 units

Introduces the theoretical and empirical literature of behavioraleconomics. Examines important and systematic departures fromthe standard models in economics by incorporating insights frompsychology and other social sciences. Covers theory and evidenceon time, risk, and social preferences; beliefs and learning; emotions;limited attention; and frames, defaults, and nudges. Studiesapplications to many dierent areas, such as credit card debt,procrastination, retirement savings, addiction, portfolio choice,poverty, labor supply, happiness, and government policy. Studentsparticipate in surveys and experiments in class, review evidencefrom lab experiments, examine how the results can be integratedinto models, and test models using eld and lab data. Studentstaking graduate version complete additional assignments.F. Schilbach

14.137[J] Psychology and EconomicsSame subject as 9.822[J]Prereq: NoneG (Spring)4-0-8 units

Examines "psychology appreciation" for economics students.Aims to enhance knowledge and intuition about psychologicalprocesses in areas relevant to economics. Increases understandingof psychology as an experimental discipline, with its own distinctrules and style of argument. Topics include self-knowledge, cognitivedissonance, self-deception, emotions, social norms, self-control,learning, mental accounting, memory, individual and group behavior,and some personality and psycho-analytic models. Within each ofthese topics, we showcase eective and central experiments anddiscuss their role in the development of psychological theory. Termpaper required.D. Prelec

14.147 Topics in Game TheoryPrereq: 14.126G (Fall)4-0-8 units

Advanced subject on topics of current research interest.D. Fudenberg

14.15[J] NetworksSame subject as 6.207[J]Prereq: 6.041 or 14.30U (Spring)4-0-8 units. HASS-S

Highlights common principles that permeate the functioning ofdiverse technological, economic and social networks. Utilizesthree sets of tools for analyzing networks--random graph models,optimization, and game theory--to study informational and learningcascades; economic and nancial networks; social influencenetworks; formation of social groups; communication networksand the Internet; consensus and gossiping; spread and controlof epidemics; control and use of energy networks; and biologicalnetworks.A. Wolitzky



14.16 Strategy and InformationPrereq: 14.01 or permission of instructorU (Spring)4-0-8 units. HASS-S

Covers modern applications of game theory where incompleteinformation plays an important role. Applications include bargaining,auctions, global games, market design, information design, andnetwork economics.M. Yildiz

14.160 Behavioral EconomicsPrereq: 14.122G (Spring)4-0-8 units

Covers recent theory and empirical evidence in behavioraleconomics. Topics include deviations from the neoclassical modelin terms of (i) preferences (present bias, reference dependence,social preferences), (ii) beliefs (overcondence, projection bias), and(iii) decision-making (cognition, attention, framing, persuasion), aswell as (iv) market reactions to such deviations. Applications willcover a large range of elds, including labor and public economics,industrial organization, health economics, nance, and developmenteconomics.A. Banerjee, F. Schilbach

14.18 Mathematical Economic ModelingPrereq: 14.04, 14.12, 14.15[J], or 14.19Acad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)4-0-8 units. HASS-S

Guides students through the process of developing and analyzingformal economic models and eectively communicating their results.Topics include decision theory, game theory, voting, and matching.Instruction and practice in oral and written communication provided.Prior coursework in microeconomic theory and/or proof-basedmathematics required.Consult Department Headquarters

14.19 Market DesignPrereq: 14.01U (Fall)4-0-8 units. HASS-S

Covers the design and operation of organized markets, building onideas from microeconomic and game theory. Topics may includemechanism design, auctions, matching markets, and other resourceallocation problems.P. Pathak

14.191 Independent Research PaperPrereq: Permission of instructorG (Fall, IAP, Spring, Summer)0-12-0 unitsCan be repeated for credit.

Under supervision of a faculty member approved by GraduateRegistration Ocer, student writes a substantial, probablypublishable research paper. Must be completed by the endof a student's second year to satisfy the departmental minorrequirement.Sta

14.192 Advanced Research and Communication (New)Prereq: 14.124, 14.382, and 14.454G (Fall, IAP, Spring)2-4-6 unitsCan be repeated for credit.

Guides second-year Economics PhD students through the process ofconducting and communicating economic research. Students choosetopics for research projects, develop research strategies, carry outanalyses, and write and present research papers. Limited to secondyear Economics PhD students.Consult Department Headquarters

14.193 Advanced Seminar in EconomicsPrereq: 14.121 and 14.451G (Fall, Spring, Summer)Units arrangedCan be repeated for credit.

Reading and discussion of current topics in economics. Opento advanced graduate students by arrangement with individualmembers of the sta.Consult Department headquarters

14.195 Reading Seminar in EconomicsPrereq: 14.121G (Fall, Spring, Summer)Units arranged [P/D/F]Can be repeated for credit.

Reading and discussion of current topics in economics. Opento advanced graduate students by arrangement with individualmembers of the sta.Sta



14.197 Independent ResearchPrereq: NoneG (Fall, IAP, Spring, Summer)Units arranged [P/D/F]Can be repeated for credit.

Under supervision of a faculty member approved by GraduateRegistration Ocer, student conducts independent research.Sta

14.198, 14.199 Teaching Introductory EconomicsPrereq: NoneG (Fall, Spring)2-0-2 unitsCan be repeated for credit.

Required of teaching assistants in introductory economics (14.01and 14.02), under supervision of the faculty member in charge of thesubject.14.198: J. Gruber, C. Rothschild. 14.199: R. Caballero, M. Beraja

Industrial Organization

14.20 Industrial Organization: Competitive Strategy and PublicPolicySubject meets with 14.200Prereq: 14.01U (Spring)4-0-8 units. HASS-S

Analyzes the current debate over the rise of monopolies, thestrategic behavior and performance of rms in imperfectlycompetitive markets, and the role of competition policy.Topics include monopoly power; pricing, product choice, andinnovation decisions by rms in oligopoly markets; static anddynamic measurement of market performance; and incentives inorganizations. Requires regular participation in class discussion andteamwork in a competitive strategy game. Students taking graduateversion complete additional assignments.N. Rose

14.200 Industrial Organization: Competitive Strategy and PublicPolicy (New)Subject meets with 14.20Prereq: 14.01G (Spring)4-0-8 units

Analyzes the current debate over the rise of monopolies, thestrategic behavior and performance of rms in imperfectlycompetitive markets, and the role of competition policy.Topics include monopoly power; pricing, product choice, andinnovation decisions by rms in oligopoly markets; static anddynamic measurement of market performance; and incentives inorganizations. Requires regular participation in class discussion andteamwork in a competitive strategy game. Students taking graduateversion complete additional assignments.N. Rose

14.21 Health EconomicsPrereq: 14.01Acad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)3-0-9 units. HASS-S

Applies theoretical and empirical tools of economics to problems ofhealth and medical care delivery. Concentrates on selected topicssuch as decision-making under uncertainty, cost-benet analysis,health insurance, physician remuneration, government regulation,health care systems of developing countries, and the economics ofAIDS.J. E. Harris

14.26[J] Economics of Incentives: Theory and ApplicationsSame subject as 15.039[J]Subject meets with 14.260Prereq: 14.01U (Spring)4-0-8 units. HASS-S

Provides a rigorous, but not overly technical introduction to theeconomic theory of incentives and organization together witha varying set of applications. These include, among others, theoptimal design of sales and CEO incentive schemes; the impact ofincentives on risk taking and innovation; tournament design; theanalysis of venture capital and other forms of nancial incentivecontracts; relational and behavioral aspects of incentive contracts;and various organizational design problems. Students takinggraduate version complete additional assignments. Limited to 60.R. Gibbons



14.260 Economics of Incentives: Theory and Applications (New)Subject meets with 14.26[J], 15.039[J]Prereq: NoneG (Spring)4-0-8 units

Provides a rigorous, but not overly technical introduction to theeconomic theory of incentives and organization together witha varying set of applications. These include, among others, theoptimal design of sales and CEO incentive schemes; the impact ofincentives on risk taking and innovation; tournament design; theanalysis of venture capital and other forms of nancial incentivecontracts; relational and behavioral aspects of incentive contracts;and various organizational design problems. Students takinggraduate version complete additional assignments. Limited to 60.R. Gibbons

14.27 Economics and E-CommercePrereq: 14.01 and (6.041 or 14.30)U (Fall)4-0-8 units. HASS-S

Uses theoretical economic models and empirical evidence to helpunderstand the growth and future of e-commerce. Economic modelshelp frame class discussions of, among other topics, contentprovision, privacy, piracy, sales taxation, group purchasing, pricesearch, and advertising on the internet. Empirical project and paperrequired.S. Ellison

14.271 Industrial Organization IPrereq: 14.04G (Fall)5-0-7 units

Covers theoretical and empirical work dealing with the structure,behavior, and performance of rms and markets and core issues inantitrust. Topics include: the organization of the rm, monopoly,price discrimination, oligopoly, and auctions. Theoretical andempirical work are integrated in each area.N. Agarwal, G. Ellison

14.272 Industrial Organization IIPrereq: 14.271G (Spring)5-0-7 units

Continuation of 14.271, which focuses on government interventionsin monopoly and oligopoly markets, and addresses both competitionand regulatory policy. Topics include horizontal merger policy anddemand estimation, vertical integration and vertical restraints,and the theory and practice of economic regulation. Applicationsinclude the political economy of regulation; the performance ofeconomic regulation; deregulation in sectors, including electricpower, transportation, and nancial services; and pharmaceuticaland environmental regulation in imperfectly competitive productmarkets.N. Rose

14.273 Advanced Topics in Industrial OrganizationPrereq: 14.271G (Spring)5-0-7 units

Empirical analysis of theoretically derived models of marketbehavior. Varied topics include demand estimation, dierentiatedproducts, production functions, analysis of market power, entryand exit, vertical relationships, auctions, matching markets,network externalities, dynamic oligopoly, moral hazard and adverseselection. Discussion will focus on methodological issues, includingidentication, estimation, counter-factual analysis and simulationtechniques.N. Agarwal, T. Salz

14.281 Contract EconomicsPrereq: 14.124G (Fall)4-0-8 units

Covers theoretical research on contracts in static as well as dynamicsettings. Emphasis is on canonical models in contracting (agencytheory, mechanism design, incomplete contracting) illustrated bymajor areas of application (e.g. compensation, labor and capitalmarkets, property rights, organizational design, corporate nance).S. Morris



14.282 Introduction to Organizational EconomicsPrereq: 14.124G (Fall)5-0-7 units

Begins with survey of contract theory for organizational economists,then introduces the main areas of the eld, including the boundaryof the rm; decision-making, employment, structures and processesin organizations; and organizations other than rms.R. Gibbons, J. Van Reenen

14.283 Advanced Topics in Organizational Economics IPrereq: 14.282G (Spring; rst half of term)2-0-4 units

Builds on the work done in 14.282 to develop more in-depth analysisof topics in the eld.R. Gibbons

14.284 Advanced Topics in Organizational Economics IIPrereq: 14.282G (Spring; second half of term)2-0-4 units

Builds on the work done in 14.282 to develop more in-depth analysisof topics in the eld.J. Van Reenen

Statistics and Econometrics

14.30 Introduction to Statistical Methods in EconomicsSubject meets with 14.300Prereq: Calculus II (GIR)U (Fall)4-0-8 units. REST

Self-contained introduction to probability and statistics withapplications in economics and the social sciences. Covers elementsof probability theory, statistical estimation and inference, regressionanalysis, causal inference, and program evaluation. Couplesmethods with applications and with assignments involving dataanalysis. Uses basic calculus and matrix algebra. Students takinggraduate version complete additional assignments. May not counttoward HASS requirement.A. Abadie

14.300 Introduction to Statistical Methods in EconomicsSubject meets with 14.30Prereq: Calculus II (GIR)G (Fall)4-0-8 units

Self-contained introduction to probability and statistics withapplications in economics and the social sciences. Covers elementsof probability theory, statistical estimation and inference, regressionanalysis, causal inference, and program evaluation. Couplesmethods with applications and with assignments involving dataanalysis. Uses basic calculus and matrix algebra. Students takinggraduate version complete additional assignments.A. Abadie, K. Evdokimov

14.310 Data Analysis for Social ScientistsPrereq: NoneG (Spring)Not oered regularly; consult department4-0-8 units

Introduces methods for harnessing data to answer questions ofcultural, social, economic, and policy interest. Presents essentialnotions of probability and statistics. Covers techniques in moderndata analysis: regression and econometrics, prediction, designof experiment, randomized control trials (and A/B testing),machine learning, data visualization, analysis of network data, andgeographic information systems. Projects include analysis of datawith a written description and interpretation of results; may involvegathering of original data or use of existing data sets. Applicationsdrawn from real world examples and frontier research. Instructionin use of the statistical package R. Students taking graduate versioncomplete additional assignments.Consult E. Duflo



14.32 Econometric Data ScienceSubject meets with 14.320Prereq: 14.30U (Fall, Spring)4-4-4 units. Institute LAB

Introduces multiple regression methods for causal inferenceand descriptive analysis in economics and related disciplines.Extensions include instrumental variables methods, analysis ofrandomized experiments and quasi-experimental research designs,and regression with time series data. Develops the skills neededto conduct - and critique - empirical studies in economics andrelated elds. Students complete an empirical project with a writtendescription and interpretation of results; this may involve originaldata collection or use of existing data sets. Applications drawn fromreal-world examples and frontier research. Familiarity with statisticalprogramming languages is helpful. Students taking graduate versioncomplete additional assignments.A. Mikusheva, J. Angrist

14.320 Econometric Data ScienceSubject meets with 14.32Prereq: 14.300G (Fall, Spring)4-4-4 units

Introduces multiple regression methods for causal inferenceand descriptive analysis in economics and related disciplines.Extensions include instrumental variables methods, analysis ofrandomized experiments and quasi-experimental research designs,and regression with time series data. Develops the skills neededto conduct - and critique - empirical studies in economics andrelated elds. Students complete an empirical project with a writtendescription and interpretation of results; this may involve originaldata collection or use of existing data sets. Applications drawn fromreal-world examples and frontier research. Familiarity with statisticalprogramming languages is helpful. Students taking graduate versioncomplete additional assignments.A. Mikusheva, J. Angrist

14.33 Research and Communication in Economics: Topics,Methods, and ImplementationPrereq: 14.32 and (14.01 or 14.02)U (Fall, Spring)3-4-5 units. HASS-S

Exposes students to the process of conducting independent researchin empirical economics and eectively communicating the resultsof the research. Emphasizes econometric analysis of an assignedeconomic question and culminates in each student choosing anoriginal topic, performing appropriate analysis, and delivering oraland written project reports.D. Donaldson, S. Jaeger

14.36 Advanced EconometricsSubject meets with 14.387Prereq: 14.32Acad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)4-0-8 units

Emphasizes econometric theory, methods, and applications usingregression, instrumental variables, dierences-in-dierences,regression discontinuity designs, machine learning and big datasets, and problems related to standard errors and statisticalinference. Includes a project with a theoretical, written and data-analytic component. Familiarity with Stata or a similar statisticalprogramming language recommended. Students taking graduateversion complete additional assignments.J. Angrist, V. Chernozhukov

14.380 Statistical Method in Economics (New)Prereq: Calculus II (GIR) and permission of instructorG (Fall; rst half of term)3-0-3 units

Introduction to probability and statistics as background for advancedeconometrics. Covers elements of probability theory, samplingtheory, asymptotic approximations, hypothesis testing, andmaximum-likelihood methods. Illustrations from economics andapplication of these concepts to economic problems. Limited to 40.A. Mikusheva

14.381 Applied EconometricsPrereq: 14.380 or permission of instructorG (Fall; second half of term)3-0-3 units

Explains basic econometric ideas and methods through empiricalapplications, emphasizing cross-sectional causal inference. Topicsmay include randomized trials, regression, instrumental variables,dierences-in-dierences, regression discontinuity designs, andproblems related to standard errors and statistical inference.Includes an empirical project.J. Angrist



14.382 EconometricsPrereq: 14.381 or permission of instructorG (Spring)5-0-7 units

Covers key models as well as identication and estimation methodsused in modern econometrics. Presents modern ways to set upproblems and do better estimation and inference than the currentempirical practice. Introduces generalized method of moments andthe method of M-estimators in addition to more modern versionsof these methods dealing with important issues, such as weakidentication or biases arising in high dimensions. Also discussesthe bootstrap and explores very high dimensional formulations,or "big data." Students gain practical experience by applying themethods to real data sets. Enrollment limited.W. Newey

14.384 Time Series AnalysisPrereq: 14.382 or permission of instructorG (Fall)5-0-7 units

Studies theory and application of time series methods ineconometrics, including spectral analysis, estimation with stationaryand non-stationary processes, VARs, factor models, unit roots,cointegration, estimation of DSGE models, and Bayesian methods.Enrollment limited.A. Mikusheva

14.385 Nonlinear Econometric AnalysisPrereq: 14.382 or permission of instructorG (Fall)5-0-7 units

Studies micro-econometric models, including large sample theory forestimation and hypothesis testing, generalized method of moments,estimation of censored and truncated specications, quantileregression, structural estimation, nonparametric and semiparametricestimation, panel data, bootstrapping, and simulation methods.Methods illustrated with economic applications. Enrollment limited.A. Abadie, W. Newey

14.386 New Econometric MethodsPrereq: 14.382G (Spring)4-0-8 units

Focuses on recent developments in econometrics, especiallystructural estimation. Topics include nonseparable models, modelsof imperfect competition, auction models, duration models, andnonlinear panel data. Results illustrated with economic applications.A. Abadie, W. Newey

14.387 Applied EconometricsSubject meets with 14.36Prereq: 14.382Acad Year 2019-2020: Not oeredAcad Year 2020-2021: G (Spring)4-0-8 units

Emphasizes econometric theory, methods, and applications usingregression, instrumental variables, dierences-in-dierences,regression discontinuity designs, machine learning and big datasets, and problems related to standard errors and statisticalinference. Includes a project with a theoretical, written and data-analytic component. Students taking graduate version completeadditional assignments.J. Angrist, V. Chernozhukov

14.391 Workshop in Economic ResearchPrereq: 14.124 and 14.454G (Fall)2-0-10 unitsCan be repeated for credit.

Develops research ability of students through intensive discussionof dissertation research as it proceeds, individual or group researchprojects, and critical appraisal of current reported research.Workshops divided into various elds, depending on interest andsize.Sta

14.392 Workshop in Economic ResearchPrereq: 14.124 and 14.454G (Spring)2-0-10 unitsCan be repeated for credit.

Develops research ability of students through intensive discussionof dissertation research as it proceeds, individual or group researchprojects, and critical appraisal of current reported research.Workshops divided into various elds, depending on interest andsize.Sta

14.399 Seminar in Data Economics and Development PolicyPrereq: Permission of instructorG (Spring)2-0-10 units

Group study of current topics in development policy and research. Includes student presentations and invited speakers. Restricted toblended DEDP MASc students.E. Duflo



National Income and Finance

14.41 Public Finance and Public PolicySubject meets with 14.410Prereq: 14.01U (Fall)4-0-8 units. HASS-S

Explores the role of government in the economy, applying tools ofbasic microeconomics to answer important policy questions suchas government response to global warming, school choice by K-12students, Social Security versus private retirement savings accounts,government versus private health insurance, setting income taxrates for individuals and corporations. Students taking the graduateversion complete additional assignments.J. Gruber

14.410 Public Finance and Public PolicySubject meets with 14.41Prereq: 14.01G (Fall)4-0-8 units

Explores the role of government in the economy, applying tools ofbasic microeconomics to answer important policy questions suchas government response to global warming, school choice by K-12students, Social Security versus private retirement savings accounts,government versus private health insurance, setting income taxrates for individuals and corporations. Students taking the graduateversion complete additional assignments.J. Gruber

14.416[J] Asset PricingSame subject as 15.470[J]Prereq: NoneG (Fall)4-0-8 units

See description under subject 15.470[J].L. Kogan, L. Schmidt

14.42 Environmental Policy and EconomicsSubject meets with 14.420Prereq: 14.01Acad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)4-0-8 units. HASS-S

Investigates the proper role of government in the regulation of theenvironment. Presents tools necessary to estimate the costs andbenets of a variety of environmental policies. Focuses on bothconceptual thinking and quantitative evaluation of environmentalissues. Gives particular attention to climate change: denes themajor concepts underlying the climate problem; examines themeasurement of climate damages as well as the costs of mitigatingthem; and discusses the various policy options available tocommunities, countries, and international coalitions. Completionof 14.30 or equivalent statistics subject strongly recommended.Students taking graduate version complete additional assignments.Consult Department Headquarters

14.420 Environmental Policy and EconomicsSubject meets with 14.42Prereq: 14.01Acad Year 2019-2020: Not oeredAcad Year 2020-2021: G (Spring)4-0-8 units

Investigates the proper role of government in the regulation of theenvironment. Presents tools necessary to estimate the costs andbenets of a variety of environmental policies. Focuses on bothconceptual thinking and quantitative evaluation of environmentalissues. Gives particular attention to climate change: denes themajor concepts underlying the climate problem; examines themeasurement of climate damages as well as the costs of mitigatingthem; and discusses the various policy options available tocommunities, countries, and international coalitions. Completionof 14.30 or equivalent statistics subject strongly recommended.Students taking graduate version complete additional assignments.Consult Department Headquarters

14.43[J] Economics of Energy, Innovation, and SustainabilitySame subject as 15.0201[J]Prereq: 14.01 or 15.0111U (Fall)4-0-8 units. HASS-SCredit cannot also be received for 15.020

See description under subject 15.0201[J].J. Li



14.44[J] Energy Economics and PolicySame subject as 15.037[J]Prereq: 14.01 or 15.0111U (Spring)4-0-8 units. HASS-SCredit cannot also be received for 14.444[J], 15.038[J]

Analyzes business and public policy issues in energy markets and inthe environmental markets to which they are closely tied. Examinesthe economic determinants of industry structure and evolution ofcompetition among rms in these industries. Investigates successfuland unsuccessful strategies for entering new markets and competingin existing markets. Industries studied include oil, natural gas, coal,electricity, and transportation. Topics include climate change andenvironmental policy, the role of speculation in energy markets,the political economy of energy policies, and market power andantitrust. Two team-based simulation games, representing theworld oil market and a deregulated electricity market, act to cementthe concepts covered in lecture. Students taking graduate versioncomplete additional assignments. Limited to 60.C. Knittel

14.440[J] Advanced Corporate FinanceSame subject as 15.473[J]Prereq: NoneG (Spring)3-0-9 units

See description under subject 15.473[J]. Primarily for doctoralstudents in nance, economics, and accounting.D. Thesmar, A. Schoar

14.441[J] Corporate FinanceSame subject as 15.471[J]Prereq: NoneG (Spring)3-0-9 units

See description under subject 15.471[J].A. Schoar, D. Thesmar

14.442[J] Advanced Asset PricingSame subject as 15.472[J]Prereq: NoneG (Fall)3-0-9 units

See description under subject 15.472[J]. Primarily for doctoralstudents in nance, economics, and accounting.D. Greenwald

14.444[J] Energy Economics and PolicySame subject as 15.038[J]Prereq: 14.01 or 15.0111G (Spring)4-0-8 unitsCredit cannot also be received for 14.44[J], 15.037[J]

Theoretical and empirical perspectives on individual and industrialdemand for energy, energy supply, energy markets, and publicpolicies aecting energy markets. Discusses aspects of the oil,natural gas, electricity, and nuclear power sectors. Examines energytax, price regulation, deregulation, energy eciency and policiesfor controlling pollution and CO2 emissions. Students taking thegraduate version complete additional assignments. Limited to 60.C. Knittel

14.448[J] Current Topics in FinanceSame subject as 15.474[J]Prereq: NoneG (Spring)3-0-9 units

See description under subject 15.474[J]. Primarily for doctoralstudents in accounting, economics, and nance.A. Malenko, C. Palmer, L. Schmidt, A. Verdelhan

14.449[J] Current Research in Financial EconomicsSame subject as 15.475[J]Prereq: Permission of instructorG (Fall, Spring)3-0-3 units

See description under subject 15.475[J]. Restricted to doctoralstudents.Sta

14.451 Dynamic Optimization Methods with ApplicationsPrereq: 14.06 and permission of instructorG (Fall; rst half of term)3-0-3 units

Provides an introduction to dynamic optimization methods,including discrete-time dynamic programming in non-stochastic andstochastic environments, and continuous time methods includingthe Pontryagin maximum principle. Applications may include theRamsey model, irreversible investment models, and consumptionchoices under uncertainty. Enrollment limited.A. Simsek



14.452 Economic GrowthPrereq: 14.451 and permission of instructorG (Fall; second half of term)3-0-3 units

Introduces the sources and modeling of economic growth andincome dierences across nations. Topics include an introduction todynamic general equilibrium theory, the neoclassical growth model,overlapping generations, determinants of technological progress,endogenous growth models, measurement of technologicalprogress, the role of human capital in economic growth, and growthin a global economy. Enrollment limited.D. Acemoglu

14.453 Economic FluctuationsPrereq: 14.452 and permission of instructorG (Spring; rst half of term)3-0-3 units

Investigation of why aggregate economic activity fluctuates, andthe role of policy in aecting fluctuations. Topics include the linkbetween monetary policy and output, the economic cost of aggregatefluctuations, the costs and benets of price stability, and the role ofcentral banks. Introduction to real business cycle and new Keynesianmodels. Enrollment limited.G. M. Angeletos

14.454 Economic CrisesPrereq: 14.453 and permission of instructorG (Spring; second half of term)3-0-3 units

Provides an overview of models of the business cycle caused bynancial markets' frictions and shocks. Topics include credit crunch,collateral shocks, bank runs, contagion, speculative bubbles, creditbooms, leverage, safe asset shortages, capital flows and suddenstops. Enrollment limited.R. Caballero

14.46 Innovation Policy and the EconomyPrereq: NoneAcad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)4-0-8 units. HASS-S; CI-H

Designed for students interested in how to best design innovation-related public policies. Addresses questions such as whether thepatent system helps or hinders innovation, how the US NationalInstitutes of Health (NIH) should allocate its funding acrossdiseases, and whether the US would benet from raising caps on theemployment of skilled immigrants through the H-1B visa program.Presentations and writing assignments strengthen skills for eectivecommunication.H. Williams

14.461 Advanced Macroeconomics IPrereq: 14.122 and 14.452G (Fall)5-0-7 units

Advanced subject in macroeconomics that seeks to bring studentsto the research frontier. Topics vary from year to year, coveringa wide spectrum of classical and recent research. Topics mayinclude business cycles, optimal monetary and tax policy, monetaryeconomics, banking, and nancial constraints on investment andincomplete markets.M. Beraja, I. Werning

14.462 Advanced Macroeconomics IIPrereq: 14.461G (Spring)5-0-7 units

Topics vary from year to year. Oen includes coordination failures;frictions in beliefs, such as rational inattention, higher-orderuncertainty, certain forms of bounded rationality, heterogeneousbeliefs, and ambiguity; implications for business cycles, assetmarkets, and policy; nancial frictions and obstacles to trade;intermediation; liquidity; safe assets; global imbalances; nancialcrises; and speculation.G. M. Angeletos, R. Townsend

14.47[J] Global Energy: Politics, Markets, and PolicySame subject as 11.167[J], 15.2191[J], 17.399[J]Prereq: NoneU (Spring)3-0-9 units. HASS-SCredit cannot also be received for 11.267[J], 15.219[J]

See description under subject 15.2191[J]. Preference to juniors,seniors, and Energy Minors.V. Karplus



14.471 Public Economics IPrereq: 14.04G (Spring)4-0-8 units

Theory and evidence on government taxation policy. Topics includetax incidence; optimal tax theory; the eect of taxation on laborsupply and savings; taxation and corporate behavior; and taxexpenditure policy.J. Poterba, I. Werning

14.472 Public Economics IIPrereq: 14.471G (Fall)3-0-9 units

Focuses on government expenditures and policies designed tocorrect market failures and/or redistribute resources. Key topicsinclude theoretical and empirical analysis of insurance marketfailures, the optimal design of social insurance programs, and thedesign of redistributive programs.A. Finkelstein

14.473 Public Policy in Health EconomicsPrereq: 14.122G (Spring)Not oered regularly; consult department4-0-8 units

Theory and evidence on the economics of the health care sector, witha particular emphasis on the economics of technological change andinnovation.Consult Department Headquarters

14.475 Environmental EconomicsPrereq: NoneG (Spring)4-0-8 units

Discusses theory and evidence on environmental externalities andregulatory, tax, and other government responses to problems ofmarket failure. Topics include cost-benet analysis; measurementof the benets of non-market goods; evaluation of the impacts ofregulation; and international environmental issues, including theeconomics of climate change and trade and the environment.C. Balboni

International, Interregional, and Urban Economics

14.54 International TradePrereq: 14.01 and 14.02U (Fall)4-0-8 units. HASS-S

Provides an introduction to theoretical and empirical topics ininternational trade. Oers a brief history of globalization. Introducesthe theory of comparative advantage and discusses its implicationsfor international specialization and wage inequality. Studies thedeterminants and consequences of trade policy, and analyzes theconsequences of immigration and foreign direct investment.A. Costinot

14.581 International Economics IPrereq: 14.04G (Fall)5-0-7 units

Covers a variety of topics, both theoretical and empirical, ininternational trade, international macroeconomics, and economicgeography. Focuses on general equilibrium analysis in neoclassicaleconomies. Considers why countries and regions trade, and whatgoods they trade; impediments to trade, and why some countriesdeliberately erect policy to impede; and implications of opennessfor growth. Also tackles normative issues, such as whether tradeopenness is benecial, whether there are winners and losers fromtrade and, if so, how they can possibly be identied.A. Costinot, D. Donaldson

14.582 International Economics IIPrereq: 14.06G (Spring)5-0-7 units

Building on topics covered in 14.581, revisits a number of corequestions in international trade, international macroeconomics, andeconomic geography in the presence of increasing returns, imperfectcompetition, and other distortions. Stresses their connection to bothmacro and micro (rm-level) data for questions related to tradepolicy, inequality, industrial policy, growth, and the location ofeconomic activities. Focuses on both theoretical models, empiricalndings, and the challenging task of putting those two together.D. Atkin, A. Costinot



Labor Economics and Industrial Relations

14.64 Labor Economics and Public PolicyPrereq: 14.30 or permission of instructorAcad Year 2019-2020: Not oeredAcad Year 2020-2021: U (Spring)4-0-8 units. HASS-S

Provides an introduction to the labor market, how it functions,and the important role it plays in people's lives. Topics includesupply and demand, minimum wages, labor market eects ofsocial insurance and welfare programs, the collective bargainingrelationship, discrimination, human capital, and unemployment.Completion of or concurrent enrollment in 14.03 or 14.04recommended.Consult J. Angrist

14.661 Labor Economics IPrereq: 14.04 and 14.32G (Fall)5-0-7 units

A systematic development of the theory of labor supply, labordemand, and human capital. Topics include wage and employmentdetermination, turnover, search, immigration, unemployment,equalizing dierences, and institutions in the labor market.Particular emphasis on the interaction between theoretical andempirical modeling.D. Acemoglu, J. Angrist

14.662 Labor Economics IIPrereq: 14.04 and 14.32G (Spring)5-0-7 units

Theory and evidence on the determinants of earnings levels,inequality, intergenerational mobility, skill demands, andemployment structure. Particular focus on the determinantsof worker- and rm-level productivity; and the roles played bysupply, demand, institutions, technology and trade in the evolvingdistribution of income.D. Autor, S. Jager

Economic History

14.70[J] Medieval Economic History in Comparative PerspectiveSame subject as 21H.134[J]Prereq: NoneU (Spring)3-0-9 units. HASS-S; CI-H

See description under subject 21H.134[J].A. McCants

14.73 The Challenge of World PovertyPrereq: NoneU (Fall)4-0-8 units. HASS-S; CI-H

Designed for students who are interested in the challenge posed bymassive and persistent world poverty. Examines extreme povertyover time to see if it is no longer a threat, why some countries growfast and others fall further behind, if growth or foreign aid help thepoor, what we can do about corruption, if markets or NGOs should bele to deal with poverty, where to intervene, and how to deal with thedisease burden and improve schools.D. Atkin, E. Duflo, F. Schilbach

Economic Development

14.740 Foundations of Development PolicyPrereq: 14.01G (Spring)Not oered regularly; consult department4-0-8 units

Explores the foundations of policy making in developing countries,with the goal of spelling out various policy options and quantifyingthe trade-os between them. Topics include education, health,fertility, adoption of technological innovations, nancial markets(credit, savings, and insurance), markets for land and labor,political factors, and international considerations (aid, trade, andmultinational rms). Some basic familiarity with probability and/orstatistics is useful for this class. Students taking graduate versioncomplete additional assignments.D. Atkins, D. Donaldson

14.75 Political Economy and Economic DevelopmentSubject meets with 14.750Prereq: 14.01U (Spring)4-0-8 units. HASS-S

Explores the relationship between political institutions andeconomic development, covering key theoretical issues as wellas recent empirical evidence. Topics include corruption, voting,vote buying, the media, and war. Discusses not just what we knowon these topics, but how we know it, covering how to cra a goodempirical study or eld experiment and how to discriminate betweenreliable and unreliable evidence. Some basic familiarity withprobability and/or statistics is useful for this class. Students takinggraduate version complete additional assignments.A. Banerjee, B. Olken



14.750 Political Economy and Economic DevelopmentSubject meets with 14.75Prereq: 14.01G (Spring)4-0-8 units

Explores the relationship between political institutions andeconomic development, covering key theoretical issues as wellas recent empirical evidence. Topics include corruption, voting,vote buying, the media, and war. Discusses not just what we knowon these topics, but how we know it, covering how to cra a goodempirical study or eld experiment and how to discriminate betweenreliable and unreliable evidence. Some basic familiarity withprobability and/or statistics is useful for this class. Students takinggraduate version complete additional assignments.A. Banerjee, B. Olken

14.76 Firms, Markets, Trade and GrowthSubject meets with 14.760Prereq: 14.01U (Spring)4-0-8 units. HASS-S

Examines how industrial development and international trade havebrought about rapid growth and large-scale reductions in poverty forsome developing countries, while globalization has simply increasedinequality and brought little growth for others. Also considers why,in yet other developing countries, rms remain small-scale and havenot integrated with global supply chains. Draws on both theoreticalmodels and empirical evidence to better understand the reasonsfor these very dierent experiences and implications for policy.Students taking graduate version complete additional assignments.D. Atkin, D. Donaldson

14.760 Firms, Markets, Trade and GrowthSubject meets with 14.76Prereq: 14.01G (Spring)4-0-8 units

Examines how industrial development and international trade havebrought about rapid growth and large-scale reductions in poverty forsome developing countries, while globalization has simply increasedinequality and brought little growth for others. Also considers why,in yet other developing countries, rms remain small-scale and havenot integrated with global supply chains. Draws on both theoreticalmodels and empirical evidence to better understand the reasonsfor these very dierent experiences and implications for policy.Students taking graduate version complete additional assignments.D. Atkin, D. Donaldson

14.770 Introduction to Collective Choice and Political EconomyPrereq: NoneG (Fall)4-0-8 units

Broad introduction to political economy. Covers topics from socialchoice theory to political agency models, including theories of voterturnout and comparison of political institutions.D. Acemoglu, B. Olken

14.771 Development Economics: Microeconomic IssuesPrereq: 14.121 and 14.122G (Fall)5-0-7 units

A rigorous introduction to core micro-economic issues in economicdevelopment, focusing on both key theoretical contributions andempirical applications to understand both why some countries arepoor and on how markets function dierently in poor economies.Topics include human capital (education and health); labor markets;credit markets; land markets; rms; and the role of the public sector.E. Duflo, B. Olken

14.772 Development Economics: MacroeconomicsPrereq: 14.121 and 14.451G (Spring)5-0-7 units

Dynamic models of growth and development emphasizing migration,modernization, risk and nance, and technological change;static and dynamic models of political economy; the dynamics ofincome distribution and institutional change; SME and larger rmstructure in developing countries; development, transparency,and information systems; and functioning of nancial markets andinstitutions in emerging markets, their design and regulation.A. Banerjee, R. Townsend



14.773 Political Economy: Institutions and DevelopmentPrereq: 14.121 and 14.451G (Spring)5-0-7 units

Economists and policymakers increasingly realize the importance ofpolitical institutions in shaping economic performance, especiallyin the context of understanding economic development. Work onthe determinants of economic policies and institutions is in itsinfancy, but is growing rapidly. Subject provides an introductionto this area. Topics covered: the economic role of institutions; theeects of social conflict and class conflict on economic development;political economic determinants of macro policies; politicaldevelopment; theories of income distribution and distributionalconflict; the eciency eects of distributional conflict; the causesand consequences of corruption; the role of colonial history; andothers. Both theoretical and empirical approaches discussed.Subject can be taken either as part of the Development Economics orthe Positive Political Economy elds.D. Acemoglu, A. Banerjee

14.781[J] Political Economy I: Theories of the State and theEconomySame subject as 15.678[J], 17.100[J]Prereq: Permission of instructorG (Spring)3-0-9 units

See description under subject 17.100[J].M. Piore, S. Berger

14.THG Graduate ThesisPrereq: Permission of instructorG (Fall, IAP, Spring, Summer)Units arrangedCan be repeated for credit.

Program of research and writing of thesis; to be arranged by thestudent with supervising committee.Sta

14.THU ThesisPrereq: 14.33U (Fall, IAP, Spring, Summer)Units arrangedCan be repeated for credit.

Program of research and writing of thesis.Sta

14.UR Undergraduate ResearchPrereq: 14.02U (Fall, IAP, Spring, Summer)Units arranged [P/D/F]Can be repeated for credit.

Participation in research with an individual faculty member orresearch group, independent research or study under the guidanceof a faculty member. Admission by arrangement with individualfaculty member.Consult D. Donaldson

14.URG Undergraduate ResearchPrereq: 14.02U (Fall, IAP, Spring, Summer)Units arrangedCan be repeated for credit.

Participation in research with an individual faculty member orresearch group, independent research or study under the guidanceof a faculty member. Admission by arrangement with individualfaculty member.Consult D. Donaldson


Documents

Department of Economics - Massachusetts Institute of ...catalog.mit.edu/...social.../economics/economics.pdf · DEPARTMENT OF ECONOMICS DEPARTMENT OF ECONOMICS Economics is the study