Compulsory Courses MASTER – M.Sc. in Economics doc

KOMMENTIERTES
VORLESUNGSVERZEICHNIS

(MODULHANDBUCH)


COURSE CATALOGUE



STUDIENGANG

MASTER – M.Sc. IN ECONOMICS

Compulsory Courses MASTER – M.Sc. in Economics

Mathematics for Economists
Modul Mathematics for Economists (CM 1)
Professor/Lecturer
N.N.
Course type
Lecture and Tutorial
Compulsory/Optional
Compulsory
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
6
Language
English
Prerequisites
„Abiturwissen” mathematics; basic knowledge of
linear algebra and multivariable calculus; being open
for a rigorous approach - theorems stated carefully
and some proofs given

Syllabus/Course outline
1.Introduction
2.Methods of Proof
3.Matrix Algebra
4.Functions
5.Integration
6.Optimization
7.Basics in Probability Theory
8.Basic Stochastic Processes
9.Basics in Dynamic Programming
10.More Advanced Material in Topology
Literature
Most of the material is covered in any good math for econ book. We will mostly be
using the ones below. Most of the relevant core material is covered in the
Jehle/Reny appendix.
de la Fuente. Mathematical Methods and Models for Economists. Cambridge
University Press (2000)
M. Hoy, J. Livernois, C.J. McKenna, R. Rees, and T. Stengos. Mathematics for
Economics. MIT Press. 2nd edition (2001)
G. Jehle and P.J. Reny. Advanced Microeconomic Theory. Addison Wesley. 2nd
edition (2000)
Mas-Colell, M.D. Whinston, and J.R. Green. Microeconomic Theory. Oxford
University Press (1995)
C.P. Simon and L.E. Blume. Mathematics for Economists. W. W. Norton & Company
(1994)
K. Wainwright and A. Chiang. Fundamental Methods of Mathematical Economics.
McGraw-Hill/Irwin. 4th edition (2004)

Econometrics
Modul Econometrics (CM 2)

Professor/Lecturer
Winter, Joachim
Course type
Lecture and Tutorial
Compulsory/Optional
Compulsory
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
6
Language
English
Prerequisites
Empirische Ökonomie für Fortgeschrittene or an
equivalent course in econometrics; basic knowledge
of matrix algebra and probability theory.

Syllabus/Course Outline
This course introduces graduate students to econometric methods for the analysis
of cross-sectional and panel data. The course presents commonly used inference
methods for linear and nonlinear specifications, including linear and nonlinear
regression models, maximum likelihood estimation, instrumental variables
estimation, generalized method-of-moments estimation, and estimation methods for
models with qualitative and limited dependent variables. In the accompanying
exercise sessions, participants practice the application of these methods to real-
world problems, using the econometrics package STATA.The linear model and OLS

estimation
1. Instrumental variables
2. Linear models for panel data
3. Treatment effects
4. M estimators
Literature
The course is based on the textbook by Jeffrey M. Wooldridge, Econometric
Analysis of Cross Section and Panel Data, Cambridge, MA: MIT Press, 2002,
complemented by material from the new book by Joshua D. Angrist, Mostly
Harmless Econometrics, Princeton, NJ, and Oxford: Princeton University Press,
2009. Additional references will be given as appropriate.

Optional Courses MASTER – M.Sc. in Economics

Advanced Macroeconomics
Modul Foundations of Applied Economics (OM 1)
Professor/Lecturer
Carstensen, Kai
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
6

Language
English
Prerequisites
Undergraduate macroeconomics

Syllabus/Course Outline
This course introduces to economic growth and business cycle theory.
1. Neoclassical Growth Model (Solow/Swan Model)
2. Ramsey Model
3. New Growth Theory
4. Real Business Cycle Model
Literature
David Romer (2011) Advanced Macroeconomics, Fourth Edition, McGraw-Hill,
Boston.


Advanced Microeconomics
Modul Foundations of advanced Economics (OM 1)
Professor/Lecturer
Schnitzer, Monika
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester

ECTS-Points
6
Language
English
Prerequisites
Undergraduate microeconomics

Syllabus/Course Outline
This course is addressed to master students who are not currently planning on
following up with a PhD degree or doing research on their own. It will introduce the
theoretical concepts needed in field courses throughout the master program. The
emphasis is less on methodology, but rather on examples where to use these
theoretical concepts. The topics covered in this module include game theory,
market behavior in oligopolistic markets and decision making under risk and
uncertainty. The rational-choice foundations of microeconomics are examined
critically, particularly in the light of experimental evidence and of alternative
theories of economic decision-making.

The Course will focus on the following topics:
Topic 1: Introduction, Game theory: Static games (with notes)
Topic 2: Game theory: Dynamic games (with notes)
Topic 3: Game theory: Static games with incomplete information (with notes)
Topic 4: Game Theory: Dynamic games with incomplete information (with notes)
Topic 5: Price Competition with capacity constraints (with notes)
Topic 6: Product Differentiation (with notes)
Topic 7: Strategic substitutes versus strategic complements (with notes)
Topic 8: Innovation (with notes)
Topic 9: Monopolistic competition (with notes)
Topic10: Decision making under uncertainty (with notes)
Topic11: Risk sharing, securitization (with notes)

Topic12: Limitations of expexted utility theory (with notes)
Topic13: Time preferences and discounting (with notes)
Topic 14: Final discussion
Literature
Core texts are:
Gibbons, R., A primer in Game Theory, Prentice Hall 1992.
Tirole, J., Industrial Organization, 7th edition, 1993.
Gravelle, H., Rees, R., Microeconomics, 3rd edition, Pearson Education, 2004.

Public Economics
Modul Foundations of Applied Economics (OM 1)
Professor/Lecturer
Holzner, Christian / Sinn, Hans-Werner
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
6
Language
English
Prerequisites
Undergraduate Level Economics

Syllabus
/
Course Outline
0. Introduction
0.1. Distribution − Allocation − Stabilisation
0.2. Efficiency and equity
0.3. Statistics
1. History of the welfare state
1.1. From ancient times to present
1.2. Bismarck‘s reforms
1.3. Social development in the 19th century
2. Pensions and intergenerational contract
2.1. Pension system
2.2. Pension formula and the reforms from 1992 and 1999
2.3. PAYGO system
2.4. Excursus: Interest and growth rate in the Solow Model
2.5. Capital cover vs. PAYGO system: implicit sovereign debt, implicit taxes and the
transition problem
2.6. Mackenroth Thesis
2.7. Crisis of the German pension system
2.8. Reform proposal of the Wissenschaftliche Beirat beim Bundesministerium für
Wirtschaft
2.9. Value of children and immigrants for the pension system
2.10. Social Security Hypothesis
2.11. PAYGO system as insurance against childlessness
2.12. PAYGO system, one-sided altruism and the investment in human capital
3. Health insurance
3.1. Some facts
3.2. Moral Hazard
3.3. Reasons for insurance compliance

3.3.1. Kinked utility function
3.3.2. Adverse Selection
4. Social benefits and unemployment insurance
4.1. Country comparison
4.2. Disincentives
4.3. Reform proposals
5. Theory of the welfare state
5.1. Redistribution as insurance: Evaluation under the veil of ignorance
5.2. Private versus public insurance
5.3. Risk taking, insurance and redistribution
6. Welfare state under systems competition
6.1. Redistribution and factor mobility
6.2. Social politics in Europe: Centralisation or Nationality Principle
Literature
References will be given in the lecture.

Macroeconomics (Research)
Modul Foundations of Economic Research (OM 2)
Professor/Lecturer
Illing, Gerhard / Sunde, Uwe
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester

ECTS-Points
9
Language
English
Prerequisites
Good knowledge in macro-, microeconomics, and
mathematical methods (calculus)

Syllabus/Course Outline


Macroeconomics has two goals: It (should) develop theories to describe/understand the
evolution of important aggregate variables such as consumption, output, investment,
employment, as well as prices such as interest rates and wages. It should judge policy
measures in a normative way based on the relevant macroeconomic theories. In it’s
methods, modern macroeconomics is based on the concept of dynamic, stochastic,
general equilibrium models.

The Course will focus on the following topics:
I Growth
1. Neoclassical Growth Model: Solow-Swan and Extensions
2. Neoclassical Growth Model: Ramsey-Cass-Koopmans
3. Extensions of the Neoclassical Growth Model
a. AK-Models
b. Growth through Externalities
c. Public Sector Investments
d. Human Capital
4. Endogenous Growth
5. Heterogeneity: Overlapping Generations Models
6. Growth Empirics and Current Research Topics

II Fluctuations (Business Cycles)
1. Fluctuations: Stylized Facts and Recap of Models
2. Real Business Cycles
3. New Keynesian Models of Fluctuations
III Policy (Fiscal, Monetary, Unemployment)
1. Fiscal Policy
a. Debt and Deficit
b. Ricardian Equivalence
c. The Fiscal Multiplier
d. Strategic Debt
e. Delayed Stabilization
f. Debt Crises
g. Fiscal Policy and Growth
2. Monetary Policy
3. Unemployment
a. Hiring, Firing, and Adjustment Costs
b. Efficiency Wages
c. Frictions
Literature:
D. Romer, Advanced Macroeconomics, McGraw Hill, 3rd edition, 2006.
Further references will be given in the lecture.

Microeconomics (Research)
Modul Foundations of Economic Research (OM 2)
Professor/Lecturer
Schmidt, Klaus
Course type
Lecture and Tutorial
Compulsory/Optional
Optional

Hours/week
4+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
9
Language
English
Prerequisites
Good knowledge in microeconomics

Syllabus/Course Outline
This course is addressed to master students who are interested in economic
research and who would like to learn modern methods of microeconomic theory at a
more rigorous level. The course is structured in a similar way as microeconomic
courses at top international graduate schools. It is entirely based on the leading
textbook of Mas-Colell, Whinston and Green and offers a solid preparation for more
applied research in almost all fields of micro- and macroeconomics. If you think
about writing a doctoral dissertation or if you consider working in a research
institution you should definitely take this course. But the course is also addressed to
students who enjoy rigorous thinking and precise arguments and who may consider
a career in an international organization, in a consultancy, in public service or
private enterprise. The only prerequisite is that you are open-minded and interested
in the deep questions of economics and how to answer them rigorously. This does
not require any specific mathematical knowledge that goes beyond the mathematics
course offered in our master program. The course is not necessarily more difficult
or labor intensive than the courses on Advanced Microeconomics, but the emphasis
is different. If you don't know which course to take, try it out.

The course will focus on following topics
1. Game Theory
2. Consumer and Producer Theory
3. Decisions under Uncertainty
4. Information Economics
5. Partial and General Equilibrium Theory
Literature
Core text:
The main reference is Mas-Colell, Whinston and Green, Microeconomic Theory,
Oxford: Oxford University Press 1995. All participants have to work with this book.
Additional references will be given in the lecture.


Advanced Economic Histor
y

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Cantoni, Davide
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Term Paper and Presentation
Cycle

Winter-Semester
ECTS-Points
9
Language
English
General Prerequisites
Basic macroeconomics (esp. growth theory) and
econometrics
MSc-Course Prerequisites
Advanced (or Applied) Macroeconomics,
Econometrics

Syllabus/Course outline
This course aims to explain the very long run trends in economic history. The two
main questions that underlie the classes will be: (1) why are our societies so much
more productive/rich than our ancestors’ ones? and (2) why are there such large
differences in income levels across societies today? To investigate these questions,
we will look for the explanatory power of various factors, such as geography,
technology, institutions, and culture, trying to isolate fundamental determinants
from proximate ones. As put by North and Thomas in 1973: “The factors we have
listed (innovation, economies of scale, education, capital accumulation etc.) are not
causes of growth; they are growth”—instead, causes of growth will be the focus of
this class.
As such, this class is highly complementary to any courses or readings you might do
in economic growth, economic development, or political economy. Moreover, the
focus of this class will be on reading and discussing research papers with a strongly
empirical focus; it will thus be complementary to the (micro)econometrics classes in
the program and should be viewed as good preparation to one’s own writing of
applied research papers.
Literature

Specific readings will be indicated in the course.


New

Ke
y
nesian Macroeconomics

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Carstensen, Kai and Wollmershäuser, Timo
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
Advanced (or Applied) Macroeconomics (Real

Business Cycle models, dynamic modeling); Time-
series Econometrics;
MSc-Course Prerequisites
Advanced (or Applied) Macroeconomics,
Econometrics

Syllabus/Course Outline
Objectives: The main goal of the course is to introduce into New Keynesian Macro-
economics (NKM) both from an empirical and a theoretical perspective in order to
explain business cycles. A particular emphasis will be put on inflation and monetary
policy: How do we measure monetary policy shocks? What are the empirical effects
of monetary policy? Can we explain these effects theoretically? How should optimal
monetary policy look like?
1. Stylized Macroeconomic Facts of the European and US Business Cycle
a. The Hodrick-Prescott filter
b. Some stylized facts
2. Stylized Microeconomic Facts of the Price Setting Mechanism
a. Evidence based on micro price data
b. Evidence based on firm surveys
3. VAR Models
a. The identification problem in macroeconomics
b. The VAR model
c. Identification strategies for VAR models
d. The monetary transmission mechanism in the US
e. The monetary transmission mechanism in the euro area
4. The New Keynesian Baseline Model
5. Monetary Policy Design in the New Keynesian Model
a. Sources of suboptimality
b. Optimal monetary policy I
c. Simple policy rules I

d. The welfare function
e. Monetary policy tradeoffs
f. Optimal monetary policy II (discretion versus commitment)
g. Simple policy rules II
h. Monetary policy under uncertainty
6. Extensions of the Baseline New Keynesian Model
Literature
Galí, J. (2008), “Monetary Policy, Inflation, and the Business Cycle”, Princeton
University Press.
Walsh, C. (2003), “Monetary Theory and Policy”, The MIT Press.

Empirical Public Economics


Modul Economic Theory (OM 3) or Modul Applied Economic Analysis and
Empirical Economics (OM 4) or Modul Public Economics (OM 5) or Modul
Economic Research (OM 6) or Economic Research & Public Economics (OM 7)
Professor/Lecturer
Dwenger, Nadja
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (60 minutes) and Exercises
Cycle
Summer-Semester (irregularly)
ECTS-Points

6
Language
English
General Prerequisites
Knowledge of linear regression analysis
MSc-Course Prerequisites
Econometrics

Syllabus/Course Outline
The central goal of this course is to provide an introduction to the use of empirical
methods for answering economic and political questions. You will learn to critically
assess empirical papers in the area of public economics and you will be taught how
to apply modern econometric methods, which are commonly used in empirical
public economics, to a variety of research questions. Topics include the effect of
taxation on the behavior of individuals and firms, the evaluation of social programs,
the incentive effects of subsidies, and the design of transfer programs such as
unemployment insurance or the pension system. When discussing the relevant
literature, we will focus not only on the content, but also on the empirical
methodology used to identify causal effects. Empirical approaches covered in the
course include, amongst others, natural and field experiments, difference-in-
differences estimations, instrumental variables, discrete-choice analysis, regression
discontinuity design, and panel data analysis. Computer exercises and real-world
micro data sets will help you to better understand these methods and to develop
fluency in the usage of the statistical software package Stata.
Literature
Lecture notes and papers read in the course are made available at the beginning of
the course on

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Frontiers in International Trade

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Economic Research (OM 6) or Economic Research & Public
Economics (OM 7)
Professor/Lecturer
Eckel, Carsten
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (60 minutes) and Presentation
Cycle
Winter-Semester
ECTS-Points
6
Language
English
General Prerequisites
Students are expected to be familiar with and have a
working knowledge of graduate level micro and at
least some background of international trade.
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics

Syllabus/Course outline
This course takes a firm level approach to the theory of international trade and is

intended to bring students to the frontier of research in this field.

1. Introduction
2. Monopolistic Competition
1.1 Love of variety
2.2 Ideal variety
2.3 Heterogeneous Firms
3. Oligopoly
3.1 Partial Equilibrium: Reciprocal Dumping
3.2 General Equilibrium: GOLE
4. Recent Topics
4.1 Multi-Product Firms
4.2 Quality and Trade
4.3 Frictions and Trade
Literature



Time Series Anal
y
sis
Modul Applied Economic Analysis and Empirical Economics (OM 4) or Economic
Research (OM 6) or Economic Research & Public Economics (OM 7)
Professor/Lecturer
Flaig, Gebhard
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week

2+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
6
Language
English
General Prerequisites
Good knowledge of econometric methods and
statistical analysis; basic knowledge of time series
models (ARIMA models)
MSc-Course Prerequisites
Econometrics

Syllabus/Course Outline
The aim of the course is to present important concepts of time series analysis
(Stationarity of stochastic processes, ARIMA models, spectral analysis, state space
modelling etc.). The course is a mixture of theory and practical applications of time
series methods. The theoretical material (presented mainly in the lecture) focuses
upon properties of stationary time series and their analysis in the time and
frequency domain. In the tutorial, problems of specification and estimation of time
series are treated. We use the programming language GAUSS for empirical
applications.
Outline of lecture
1) Stationary time series models (basic concepts)
2) ARIMA models
3) Spectral analysis
4) Analysis of important filters in economics

5) An introduction to state space modelling and the Kalman filter
Outline of tutorial
1) Lag operators and some properties of lag polynomials
2) Trigonometric functions and complex numbers
3) Fundamentals of programming language GAUSS
4) Descriptive analysis of time series
5) Model selection and estimation of ARIMA models
6) Empirical aspects of spectral analysis
7) Applications of filters (Trend and cycles, seasonal adjustment etc)
Literature
James Hamilton (1994), Time Series Analysis. Princeton University Press.
Andrew Harvey (1993), Time Series Models. MIT Press.
Robert Shumway/David Stoffer (2011), Time Series Analysis and its Applications.
Springer.


Advanced Industrial Or
g
anization

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Economic Research (OM 6) ) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Harhoff, Dietmar and Schnitzer, Monika
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week

2+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
6
Language
English
General Prerequisites
Participants should have a solid knowledge of
Economics (Bachelor of Economics major)
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics
Econometrics

Syllabus/Course Outline
The aim of this course is to present advanced topics in Industrial Organisation, with
both theoretical and empirical research questions. Participants should have a good
knowledge of microeconomics and basic knowledge of game theory. A basic know-
ledge of econometrics would also be an advantage. Students should be willing to
participate actively in lectures and classes, to read the original literature, and to
regularly solve problem sets. The course is directed to doctoral students and M.A.
students. The course will be taught in English. There will be a written examination
(2 hours) at the end of the semester. The relevant material for this course as well as
references will be made available throughout the course.
Literature
Belleflamme and Peitz, Industrial Organization - Markets and Strategies.
Cabral, L., Introduction to Industrial Organization.
Tirole, J., The Theory of Industrial Organization.

Angrist and Pischke, Mostly harmless econometrics: an empiricst’s companion.


Advanced Theor
y
of Taxation

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic
Research (OM 6) or Economic Research & Public Economics (OM 7)
Professor/Lecturer
Haufler, Andreas
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
good understanding of microeconomic theory;
willingness to do in-depth analysis of optimal tax
results; Bachelor-level course on taxation

MSc-Course Prerequisites
Advanced (or Applied) Macroeconomics ,
Advanced (or Applied) Microeconomics

Syllabus/Course Outline
The lecture aims to cover a broad range of research questions in the field of
taxation, and simultaneously provide an introduction to the methods used in recent
theoretical work on public economics. Starting from the benchmark models of
optimal commodity and income taxation, the theory of optimal taxation and tax
reform is successively extended to account for issues of risk, public goods and
externalities, market imperfections and strategic interaction between both firms and
countries. The analysis will be predominantly theoretical, but empirical applications
are also included for most subjects.
The purpose of the tutorial is to deepen the understanding of the material. This is
done primarily in the form of exercise questions that often employ fully specified
utility and production functions so that complete allocations can be (parametrically)
computed. In addition structured reading assignments are given which include
guidelines and questions that point to the role of specific modelling assumptions
and core results in the paper.
Literature
Gareth D. Myles (1995): Public Economics. Cambridge University Press.
Original journal articles


Search and Matchin
g
Theor
y
with Applications in Labour

Market Policy
Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Public Economics (OM 5) or Economic Research (OM 6) or
Economic Research & Public Economics (OM 7)
Professor/Lecturer
Holzner, Christian
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
written exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
Solid background knowledge in mathematics for
economists, and microeconomics
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics

Syllabus/Course outline
I. Labour Market Theory
1. Beyond a perfect labour market
2. Mortensen-Pissarides matching model

3. Models with search and on-the-job search
4. Directed search models

II. Labour Market Policy
1. Labour unions
2. Employment protection
3. Minimum wages
4. Optimal UI-benefits and income taxation
Literature
There is no single textbook which covers the whole course. However all of the
following cover some aspects:
Pierre Cahuc and Andr´e Zylberberg (2004): Labor Economics, MIT Press.
Christopher A. Pissarides (2000): Equilibrium Unemployment Theory, MIT Press.
Dale Mortensen (2005): Wage dispersion, MIT Press.
Information about specific readings will be given in the course.



Monetar
y
Theor
y

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Public Economics (OM 5) or Modul Economic
Research (OM 6) or Economic Research & Public Economics (OM 7)
Professor/Lecturer
Illing, Gerhard
Course type
Lecture and Tutorial

Compulsory/Optional
Optional
Hours/week
4+2
Exam
written exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
You must be familiar with basic inter-temporal
optimization and the analysis of static and dynamic
systems with rational expectations, providing you
with a good understanding of macroeconomic
general equilibrium models. You are expected to
have taken a master course in Advanced (or Applied)
Macroeconomics at a level corresponding to David
Romer’s textbook.
MSc-Course Prerequisites
Macroeconomics , Microeconomics , Econometrics

Syllabus/Course Outline
The aim of the course is to introduce into core models of Monetary Theory and to
show how they can be used to provide insights for the design of monetary policy.
The course will also survey selected current research topics in this field. Topics
include the role of money in flexible-price general equilibrium models and in
models with sticky price adjustment; Monetary Transmission mechanisms,

Monetary policy rules; credibility issues in monetary policy; the importance of
institutional design for monetary policy and issues in monetary policy implement-
tation. Apart from New Keynesian models, the course will also cover the interaction
between monetary and fiscal policy, the role of government debt and the theory of
the fiscal price level; monetary policy and financial stability; incomplete financial
markets and models of liquidity crises; monetary policy in Open Economies.
Emphasis will be both on rigorously formulated theoretical models and on economic
intuition. Even though the course will be mainly theoretical, empirical relevance will
be emphasized. It aims to get both a deeper understanding of current central bank
practise and a good intuition of recent theoretical advances.
Literature
Gali, Jordi, Monetary Policy, Inflation and the Business Cycle, Princeton University
Press, 2008.
Illing, Gerhard, Money: Theory and Policy, Script 2012.
Walsh, Carl E. Monetary Theory and Policy, 3
nd
edition, MIT-Press, 2010.
Woodford, Michael, Interest and Prices: Foundations of a Theory of Monetary
Policy, Princeton University Press, 2003.

Behavioral and Experimental Economics


Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Economic Research (OM 6) or Economic Research & Public
Economics (OM 7)
Professor/Lecturer
Kocher, Martin
Course type
Lecture and Tutorial

Compulsory/Optional
Optional
Hours/week
4+2
Exam
Presentation and Term Paper
Cycle
Summer-Semester (irregularly)
ECTS-Points
9
Language
English
General Prerequisites
Basic economic thinking (microeconomics) and
standard game-theoretic concepts
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics

Syllabus/Course Outline
The course focuses on how psychological insights and experimental methods have
been influencing economic thinking. We will discuss several selected topics in
microeconomics and public economics, most of which involve situations with
strategic interaction.
 Introduction, methodology
 Bargaining games
 Social preferences
 Cooperation
 Individual decision-making
 Laboratory, programming, statistics
 Guessing game and learning

 Auctions
 Team decision-making
 Self-control (and neuro-economics)
Literatur:
There is no single textbook which covers the course. Information about specific
readings will be given in the course.


Political Economics


Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public
Economics (OM 5) or Economic Research (OM 6)
Professor/Lecturer
Meier, Volker
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester (sporadic)
ECTS-Points
6
Language
English
General Prerequisites

Basic economic thinking (micro-economics) and
public economics
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics, Public
Economics

Syllabus/Course outline
1. Introduction: Public Finance and Public Choice
2. Preferences and Voting
3. Electoral Competition
4. Agency Models
5. Partisan Politicians
6. General-Interest Politics
7. Special-Interest Politics
8. Political Regimes
9. Electoral Cycles
Literature
D. C. Mueller (2003), Public Choice III. Cambridge University Press: Cambridge etc.
T. Persson and G. Tabellini (2000), Political Economics. MIT Press: Cambridge and
London.



Distribution Theor
y
and Polic
y

Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public
Economics (OM 5)

Professor/Lecturer
Meier, Volker
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester (sporadic)
ECTS-Points
6
Language
English
General Prerequisites
Basic economic thinking (micro-economics and
public economics)
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics , Public
Economics

Syllabus/Course Outline
In its first part, the course discusses various measures of inequality and both
classical and neoclassical theories of distribution. The second part is devoted to
applications in International Economics, Labour Economics, Social Policy and
Political Economics.
Literature
A.B. Atkinson, F. Bourguignon (2000): Introduction: Income Distribution and

Economics, in: A.B. Atkinson, F. Bourguignon (Eds), Handbook of Income
Distribution, Vol. 1, Amsterdam etc. , pp. 1-58.
F.A. Cowell (1995): Measuring Inequality, LSE Handbooks in Economics, Second
Edition.


S
y
stems Competition


Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Meier, Volker and Stimmelmayr, Michael
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points
9
Language
English

General Prerequisites
Basic economic thinking (micro-economics) and
public economics
MSc-Course Prerequisites
Advanced (or Applied) Microeconomics , Public
Economics

Syllabus/Course outline
Introduction: Competition among States
Taxes and Public Infrastructure Goods
The Erosion of the Welfare State
Hamiltonians
Social Dumping in the Transformation Process
Ecological Competition
The Competition of Product Standards
Limited liability, Risk Taking and the Competition of Bank Regulators
The Competition of Competition Rules
The Implications of Systems Competition for Europe and the Greek Crisis
Literature
D. C. Mueller (2003), Public Choice III. Cambridge University Press: Cambridge etc.
T. Persson and G. Tabellini (2000), Political Economics. MIT Press: Cambridge and
London


Growth and Natural Resources


Modul Applied Economic Analysis and Empirical Economics (OM 4) or Public
Economics (OM 5) or Economic Research (OM 6)
Professor/Lecturer

Pittel, Karin
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
6
Language
English
General Prerequisites
Basic knowledge in the fields of environment and
resource economics as well as in dynamic modeling
is helpful but not essential.
MSc-Course Prerequisites
Advanced (or Applied) Macroeconomics

Syllabus/Course Outline
The course focuses on the intertemporal implications of resource scarcity for
economic growth. To lay the foundations for the analytical analysis, the course
starts with a short repetition of neoclassical growth theory and a longer introduction
to endogenous growth theory. It then focuses on specific aspects with respect to the
extraction of exhaustible and the harvest of renewable resources. Topics dealt with
include the socially optimal extraction path, effects of environmental policies, the
long-run potential for economic growth under resource scarcity, the direction of

technological development and the role of property rights.
Literature
Barro, R. J., Sala–i–Martin, X. (2004), Economic Growth, MIT Press.
Chiang, A.C. (1992), Elements of Dynamic Optimization, McGraw Hill.
Perman, R. et. al (2003), Natural Resource and Environmental Economics, Pearson.


The Political Econom
y
of Inter
g
enerational Transfers


Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Poutvaara, Panu
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
2+2
Exam
Written Exam (120 minutes)
Cycle
Winter-Semester
ECTS-Points

6
Language
English
General Prerequisites
Participants should have a solid knowledge of
Economics
MSc-Course Prerequisites
Advanced (or Applied) Macro- and Microeconomics

Syllabus/Course outline
This course analyzes political economy models related to various intergenerational
transfers, most notably, social security (public pensions) and public education. The
course starts with an overview of median voter models in the presence of
overlapping generations, and discusses also interest-group based models. After this,
more structure is added into the discussion by including different types of social
security, with focus on how the political support to social security depends on
whether social security benefits are earnings-related or flat-rate, and also on the
effects of early retirement provisions. After this, the course analyzes political
support for public education, and how public education and social security can be
linked in the political process. The course also explores the scope for reforming
social security, military draft as a form of intergenerational redistribution, and the
effects of the mobility of labor.
Topics are:
1. Median voter and interest groups models of social security
2. Earnings-related and flat-rate benefits
3. Population aging
4. Education and social security
5. Early retirement
6. Scope for reforming social security
7. Generational incidence and political economy of conscription

8. Mobility of labor and public provision of higher education
9. Migration and Social Security
Literature
Specific Readings will be given for each topic.


Contract Theor
y

Modul Economic Theory (OM 3) or Modul Economic Research (OM 6) or
Economic Research & Public Economics (OM 7)
Professor/Lecturer
Schmidt, Klaus
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
Written Exam (60 minutes) and Presentation
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
Participants should have a solid knowledge of
Microeconomics and Game Theory.

MSc-Course Prerequisites
Microeconomics Research

Syllabus/Course Outline
The course is directed to advanced master and doctoral students. Participants
should be willing
 to participate actively in lectures and classes,
 to read the original literature,
 to regularly solve demanding problem sets,
 and to give a presentation on a paper in the second part of the course.
All participants have to hand in individual solutions to all problem sets before these
problems are discussed in class. At most one problem set may be handed in late.
In the first eight weeks this will be a regular lecture with classes covering the
following topics:
1. Introduction
2. Static Moral Hazard Models
3. Dynamic Moral Hazard Models
4. Adverse Selection
5. Mechanism Design
6. Incomplete Contracts
7. Behavioral Contract Theory
In the last four weeks we will have student presentations of several papers on some
or all of the following topics: Foundations of Incomplete Contracts, Contracts and
Competition, Implicit Contracts, Career Concerns, Organizations, Behavioral
Contract Theory, Experimental Contract Theory
Literature
Bolton, Patrick and Matthias Dewatripont (2005), Contract Theory, Cambridge: MIT-
Press. (This textbook captures many issues to be discussed in the course. A
detailed list of further references will be given as the course starts).

Labor Economics: Theor
y
and Applications

Modul Economic Theory (OM 3) or Applied Economic Analysis and Empirical
Economics (OM 4) or Modul Economic Research (OM 6) or Economic Research &
Public Economics (OM 7)
Professor/Lecturer
Sunde, Uwe
Course type
Lecture and Tutorial
Compulsory/Optional
Optional
Hours/week
4+2
Exam
written exam (120 minutes)
Cycle
Summer-Semester
ECTS-Points
9
Language
English
General Prerequisites
The course is largely self-contained. Nevertheless,
solid background knowledge in mathematics for
economists, microeconomics and empirical methods
is required.
MSc-Course Prerequisites

Advanced (or Applied) Microeconomics ,
Econometrics

Syllabus/Course Outline
This course offers an introduction to modern labor economics. The course focuses
on the combination of theoretical models and empirical applications, and on the
distinction between standard theories of the labor market and implications of
considering imperfect labor markets. The course covers the main areas of labor
economics and presents standard contributions, as well as recent research articles
in the respective fields.
The course covers the following topics:
1. Quantitative Labor Supply
a. Static Labor Supply
b. Dynamic Labor Supply
c. Empirical Studies and Policy Applications
2. Qualitative Labor Supply: Human Capital Theory
a. The Becker Model of Human Capital
b. Life Cycle Models of Education
c. Human Capital Externalities
d. Estimating the Return on Human Capital
3. Labor Demand
a. Static Labor Demand
b. Dynamic Labor Demand and Adjustment Costs
c. Empirical Applications
4. Search
a. The Individual Search Problem
b. Search and Equilibrium
c. Search Empirics
5. Unemployment
a. Wage Rigidity and Unemployment: Efficiency Wages

b. Minimum Wages
c. Frictional Unemployment and Search-Matching Models
d. Empirical Applications
Literature
Main Reference: P. Cahuc and M. Zylberberg: Labor Economics, MIT Press, 2004.
Additional references are given in the course.