The Directory of Courses is a comprehensive volumeof all courses, not all of which are offered in any given term. The course catalog provides descriptions of core courses and elective courses offered during both years of study at the MA program in Economics.
The whole course is concerned with developing the basic mathematical tools needed for advanced study in economics. This course is dedicated to one variable calculus: Special kinds of functions – polynomial, rational, exponential, logarithmic; main notions about functions: continuity, differentiability, convexity; graphing of 1 variable functions, optimization methods – first and second order conditions; indefinite and definite integrals. Economical applications: cost, revenue, profit, utility functions, optimization problems, elasticity, surplus.
This course provides students with basic notions, facts, methods of Linear Algebra needed in economical problems: Matrix algebra, determinants, rank, solution of systems of linear equations, linear spaces and their transformations, eigenvalues and eigenvectors, basis, inner product. Economical applications: InputOutput Analysis, Markov models, introduction to Linear Programming.
This course is concerned with developing the basic mathematical tools from multivariable calculus needed for building mathematical models for economical processes, finding parameters which can be controlled, finding optimal solutions. Main topics of this course are: Functions of several variables, quadratic forms, definiteness, partial derivatives, gradient and Hessian, optimization of multivariable functions – unconstraint case and cases with equality, inequality, mixed constraints, first and second order conditions. Economical applications: Regression analysis, shadow price, optimization of utility function, binding and nonbinding constraints.
This course provides the students with additional advanced topics: Homogenous and homothetic functions, concave and convex functions, concave optimization, differential equations, solution of first and second order differential equations. Economical applications: Exponential and hyperbolic models of population growth, comparison of dynamics of string motion and price dynamics.
The first module of Microeconomics is devoted to the study of consumer choice theory. In this module students study theory that economists use to explain how individuals make choice in a wide variety of contexts. The course starts by introducing students to the axioms of consumer preferences based on which a utility function with desired properties is defined. Next, derivation of individual demand functions from utility maximization problem (primal problem) is shown, with attention to special cases, such as: corner/multiple solutions or cases when standard mathematics of optimization does not work. In parallel, students learn how to setup and solve expenditure minimization problem (dual problem) and obtain compensated demand functions. Next, properties of demand functions are studied in detail, and many important relationships in consumer theory (such as: indirect utility and expenditure functions and their interrelation, Shephard’s lemma, Roy’s identity, Slutsky equation) are established. As the next topic students learn the definition of elasticity and derive important elasticity aggregation rules. This is followed by definition of consumer surplus and evaluation of consumer welfare and its changes. The final goal of the course is to develop the notion of market or aggregate demand so that this concept can be used in later sections of Microeconomics.
This course is part of the first-year sequence in microeconomic theory and covers the theory of the firm. Topics include production technology, profit maximization, cost minimization, and cost functions. Both mathematical and graphical techniques will be used. Will this be interesting? Unfortunately, not really. The basic theory of the firm taught in this course is simple, crude, and will tell us little about how actual firms behave. But there are two good reasons for this two course. One, more complex and realistic theories of the firm build on what we learn in this course. This will be for the second year of your studies at ISET. Second, even a simple theory of the firm is good enough if the actual interest is not the firm, but larger structures. This will be for the remaining miniterms, when the theory of the consumer and the theory of the firm will be combined to analyze different types of markets.
The course introduces a partial equilibrium model of an economy. Using this model, in the first part of the course it is shown under what conditions markets are Pareto efficient (the First Fundamental Theorem of Welfare Economics). Then we analyze the welfare effects of taxes and touch on the issue of tax incidence. Finally, we discuss the effects of redistribution and derive the Second Fundamental Theorem of Welfare Economics. In the second part of the course, we introduce externalities into our model. It is shown that these externalities cause markets to lose Pareto efficiency, and we discuss three ways how to alleviate the problem: quotas, Pigou taxes, and applying the Coase Theorem. Finally, we discuss the related topic of public goods.
Games in Extensive and Normal Form; Zero Sum Games; Nash Equilibrium; Chance Moves; Information sets; von Neumann - Morgenstern utility; Mixed Strategies; Dominating Strategies; Centipede Game; Backwards and Forward Induction; Correlated Equilibria; Repeated Games; Incomplete Monitoring; Social Contract; Signaling Games
This is the first course in a sequence of five courses in Macroeconomic Theory. The goal of the sequence is to familiarize the students with the most important questions of modern macroeconomics and the theories that are used in studying them. The courses survey the main methods and models of macroeconomics, looking at both long run performance and short run fluctuations.
In this module of the Macroeconomics sequence we focus on an open economy framework. We will talk about the country’s balance of payments accounts, examine the nature of the foreign exchange markets; explore the theory behind exchange rate fluctuations in the short run as well as in the long run, macroeconomic stabilization policy options under fixed and flexible exchange rate regimes. Finally, we will discuss the nature, causes and economic mechanisms behind the currency crises. We will also discuss the issues pertaining to the macroeconomic policy and coordination challenges under fixed and floating exchange rate regimes.
The goal of this course is to review some central topics and issues in modern macroeconomic theory. In addition to macro theory, we will also study in some detail mathematical methods which are essential for working with dynamic macroeconomic models. These include difference and differential equations, backward-looking and forward-looking solutions, phase diagram analysis, etc. We will spend some time studying in depth various types of expectation formation mechanisms and their uses in macroeconomic theory. This will be followed by studying some topics in macroeconomic theory.
The goals of the course are to: 1. Introduce students to the study of economic growth 2. Familiarize students with the classic economic growth models 3. Assess mathematical techniques for analyzing economic growth 4. Conduct introductory empirical assessments of economic growth patterns 5. Critically examine the seminal ideas and findings from the growth economics literature, discussing their limitations and potential areas for future research.
This is the first module in the Statistics/Econometrics sequence offered in the first year of the MA. The course starts by introducing students to the simple concepts of sample mean and variance, covariance and correlation and discusses the ways of graphical representation of data, depending on the type of the variable and/or its measurement. This introduction is complemented by Excel lab sessions to help building some basic computational skills. The next block in the course is devoted to the study of the probability theory and it starts by definition of an experiment and its basic outcomes, which form the sample space. Definition of more complex events is introduced next together with basic operations with events. The notion of probability is introduced and operations with the probability are studied. As part of this study students cover rules of counting outcomes (such as listing, mxn rule, permutations, combinations). Next, some important concepts are introduced to students, including: concepts of conditional probability, law of total probability and Bayes’ theorem. The course then delves into discussion of discrete random variables and their distributions, covering: Bernoulli, Binomial, Poisson, geometric distributions as examples. The next step is to introduce students to continuous random variables and some important distributions, such as: uniform, exponential, Gaussian, t, F, chi-square distributions. The course concludes by presenting the Chebyshev’s theorem and showing students how to work with transformations of random variables.
We plan to study: Central Limit Theorem; Estimation of Parameters and Econometrics; Statistical Inference; Point Estimation; Confidence Intervals; Hypothesis Testing; Regression: Linear and Quadratic. Estimation of Coefficients.
Following Statistics I and II, this course starts a sequence of 3 modules in Econometrics. The main aim of Econometrics I is to provide students with rigorous introduction to econometric theory and applications. This course focuses on the fundamental building block of econometrics – the single linear regression model and its estimation under classical assumptions. The course starts by introducing the idea of linear econometric model and develops the logic of the ordinary least squares method of parameter estimation: first for the case of simple and then for a more general case of multiple regression model. The properties of OLS estimators, including finite and large sample, are then analyzed, given certain assumptions. Variance and sample size are discussed in detail and the issue of multicollenearity is introduced. Discussion then turns to the issue of under- and over-specification of the model and problems that these situations bring with them. Next, students move to the topic of inference and learn the tools of hypothesis testing in the framework of the linear regression model. The final subset of topics walks students through: the impact of measurement units of variables on coefficient estimates and presents the idea of beta-coefficients; discussion of the most commonly used simple functional forms and interpretation of results given the form; use of binary/dummy and more general categorical explanatory variables; measures of goodness of fit and model selection. In parallel with the lectures the course offers a series of lab sessions where students are introduced to STATA software and learn now to apply it to implement all steps of analysis covered in lectures. Students successfully completing this course should be able to apply basic econometric tools in their own empirical work and to understand use of the tools covered in this course in academic literature.
This is the second course in the econometrics sequence. It starts with reviewing the material covered in the first econometrics course: regression techniques, OLS, assumptions (linearity, mean independence, homoscedasticity, independence, and other basic assumptions), prediction and residual analysis; and then study extensions of the simple regression model. These revolve around violating the main assumptions of the linear model, studying their implications, and ways to correct for the resulting bias or invalidation of hypotheses testing. Covered topics include multicollinearity, heteroskedasticity, serial correlation, simultaneous equations, instrumental variables, and two-stage least squares.
The aim of the course is to improve academic writing skills in English. Throughout the course, students will be acquainted with various methods and tools for creating cohesive and professional academic work. Students will, in particular, be taught how to structure a paragraph and write a thesis statement. To succeed in the course, students will be required to read and write critically and to develop their critical thinking skills. Finally, the course will also help students improve their English language grammar and vocabulary.
The aim of the course is to improve academic writing skills in English. Throughout the course, students will be acquainted with various methods and tools for creating cohesive and professional academic work. Students will, in particular, be taught how to write critiques and comparative essays. To succeed in the course, students will be required to read and write critically and to develop their critical thinking skills. Finally, the course will also help students improve their English language grammar and vocabulary.
Students are tasked with writing a critical literature review (comparative essay) on a topic assigned to them by the faculty. Students will be provided with an introductory article to the topic and will be required to identify at least two additional sources for the review. An acceptable paper will not only include pertinent and seminal literate on the subject, but will also give students’ justification for making their literature selections. Students will be required to provide full references in their work (using APA style) and should rely on proper academic sources. Each paper should be no more than 6-8 pages long (doublespaced, 12pt font).
This course focuses on improving students’ professional communication skills, both written and oral. Students will learn how to write appropriate curricula vitae, sound cover letters and convincing statements of interest. Recitations/computer lab sessions, which will follow the weekly lectures, will include practical exercises for students to improve their CVs, cover letters and other means of professional communication. Students will also improve their interview skills. The overarching aim of the course is to help students learn to write for and talk to a particular audience: their potential future employers.
Second Year: Elective Courses
This course covers topics in Maximum Likelihood Estimation, Qualitative and Limited Dependent Variable, and Nonparametric estimation methods. During this course a special emphasis is placed on practical applications of theory in empirical work. To achieve this goal the course includes several STATA lab sections and computer assignments. Another crucial component of this course is introduction to empirical literature relevant for the covered topics.
This course is an introduction to Behavioral Economics – the intersection of psychology and economics. It describes how the use of evidence from psychology can improve the predictive power of standard economic theories. Course aims are:
1. To acquaint students with the central elements of behavioral economic theory and of the psychological concepts and evidence which motivate it;
2. To broaden students' knowledge of how psychological and experimental findings influence economic modelling;
3. To improve students' appreciation of how a psychological perspective may contribute to the understanding of economic phenomena.
This course is designed to get hands-on experience in working with big data in business, economics and finance. In addition to lectures students will have numerous business cases to be solved in groups. The course will cover basic tools of data analytics and visualization with more than 10 practical cases analyzed in R and Power BI. Students will also participate in kaggle.com competition, learn how to quickly find answers to programming questions at stackoverflow.com and discover other great resources to deepen their knowledge.
The course provides a thorough overview of historical and contemporary figures, along with numerous real-world examples, on topics such as the fair distribution of wealth both within and outside the country.
The aim of this course is to give students an understanding of the principles of Cost-Benefit Analysis and to provide them with the basic tools necessary to perform Investment Appraisal and Cost-Benefit Analysis
Using a real-world example, the course going to introduce students into the decision-making in a complex environment with conflicting interests with a special emphasis on group dynamics.
This course introduces the key concepts and major issues of the economics of education, placing emphasis on current empirical research in the field.
Introducing students to the main issues characterizing the energy sector in the Caucasus and in the world. Developing the understanding of the trends that characterized their evolution and of the relation between the characteristics of energy markets and growth perspectives of countries. Overview of the functioning of the most important energy markets.
1) To provide an overview of what “environment” means – in the context of environmental pollution, environmental economics and environmental policy, and to what extent the environment is integrated into the economic system 2) To get an understanding of necessary structural properties of environmental policies and to design basic environmental policies for concrete environmental issues 3) To understand the theoretical underpinnings of environmental economics; this includes in particular the instruments to internalize environmental effects 4) To learn about the environmental issues associated with international trade, in particular about the controversies between these two policy areas.
The purpose of this course is two-fold: on the one hand, to introduce students to the up-to-date methods of financial time series and, on the other hand, to give students "hands-on" experience with Stata using some real data examples. Students that are more interested in private sector applications will find themselves better prepared to the challenges of financial time series analysis. Students that are more interested in an academic career will gain from learning the basic tools of financial econometrics. While only practice can make it perfect, this course will give you some basic ideas on where to start.
Monopoly, various price discriminations. Non Linear Pricing, Durable Goods. Regulating a Monopoly. Cournot Bertrand & Stackelberg equilibria. Cournot with Imperfect Information. Advertising, Price Dispersion. Differentiated Products: Horizontal and Vertical Differentiation. IO and Bounded Rationality. Networks, Search Models.
We will begin with a review of some methods used in modern dynamic macroeconomic analyses, which explicitly incorporate rational expectations. These methods will be employed in studying some key results that are the hallmark of the New Classical macroeconomic literature, including the policy irrelevance proposition, Lucas Critique, optimal monetary policy, monetary neutrality and stabilization policy, rational bubbles, and time inconsistency and credibility. These analyses will be based on the earlier contributions of Lucas, Sargent and Wallace, Kydland and Prescott, Barro and Gordon, Flood and Garber, etc. In the second half of the mini-course, we will discuss some New Keynesian monetary economy models and ideas, with a focus on macroeconomic implications of sticky prices. Topics include theories of sticky prices and price adjustment, including models with convex costs of price adjustment (Rotemberg), menu cost models (Barro, Mankiw), the New Keynesian Phillips curve (Calvo), overlapping contracts (Fischer, Taylor), and asymmetric price adjustment (“rockets and feathers”). Additional topics I plan to discuss include models of money demand (shopping time model), costs of expected and unexpected inflation, welfare cost of inflation (Friedman, Bailey), and inflation tax and seigniorage.
The goal of the course is to provide a broad overview of the main theories, topics and issues in international macroeconomics. The course starts with the look at the basics of the Balance of Payments accounting and the theoretical aspects of Current Account determination. We continue the discussion of the country’s trade and current account balance by looking at the determinants of sovereign debt as well as external debt sustainability. Other topics include international capital flows and capital controls; currency crises: main theories and empirical evidence. Time permitting, we will conclude with the discussion of the herding behavior on the financial markets.
The participants have an overview about the economic and political rationale behind the concept of public private partnerships (PPP).
The goal of this course is to review basic concepts in game theory, market design, and information design.
This course introduces tbe macroeconomic applications of the dynamic stochastic general equilibrium (DSGE) models, the role of financial frictions in macroeconomic fluctuations and teaches how to numerically solve and analyze quantitative macro models using standard programming languages such as Matlab and Dynare.
