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Department of Economics

Chair

Gene M. Grossman

Acting Chair

Mark W. Watson (fall/spring)

Associate Chair

Anne C. Case

Departmental Representative

Faruk R. Gul

Smita B. Brunnermeier

Director of Graduate Studies

Stephen E. Morris

Professor

Dilip J. Abreu

Mark A. Aguiar

Yacine Aït-Sahalia

Orley C. Ashenfelter

Marco Battaglini

Roland J. Benabou, also Woodrow Wilson School

Alan S. Blinder, also Woodrow Wilson School

Markus K. Brunnermeier

Anne C. Case, also Woodrow Wilson School

Janet M. Currie, also Woodrow Wilson School

Angus S. Deaton, also Woodrow Wilson School

Henry S. Farber

Mikhail Golosov

Gene M. Grossman, also Woodrow Wilson School

Faruk R. Gul

Harrison G. Hong

Bo E. Honoré

Patrick J. Kehoe

Nobuhiro Kiyotaki

Alan B. Krueger, also Woodrow Wilson School

Paul R. Krugman, also Woodrow Wilson School

David S. Lee, also Woodrow Wilson School

Alexandre Mas, also Woodrow Wilson School

Stephen E. Morris

Christina H. Paxson, also Woodrow Wilson School

Wolfgang Pesendorfer

Stephen J. Redding, also Woodrow Wilson School

Uwe E. Reinhardt, also Woodrow Wilson School

Richard Rogerson, also Woodrow Wilson School

Harvey S. Rosen

Esteban A. Rossi-Hansberg, also Woodrow Wilson School

Cecilia E. Rouse, also Woodrow Wilson School

Yuliy Sannikov

José A. Scheinkman

Harold T. Shapiro, also Woodrow Wilson School

Hyun Song Shin

Christopher A. Sims

James Trussell, also Woodrow Wilson School

Mark W. Watson, also Woodrow Wilson School

Robert D. Willig, also Woodrow Wilson School

Wei Xiong

Visiting Professor

Nancy Reichman

Thomas J. Sargent

Associate Professor

Ulrich Mueller

Visiting Associate Professor

Justin Wolfers

Assistant Professor

Sylvain Chassang, also Woodrow Wilson School

Jan DeLoecker, also Woodrow Wilson School

Kirill Evdokimov

Jakub W. Jurek

Ilyana Kuziemko, also Woodrow Wilson School

Benjamin Moll, also Woodrow Wilson School

Andriy Norets

Andrew Shephard

David Sraer

Satoru Takahashi

Tom S. Vogl, also Woodrow Wilson School

Visiting Assistant Professor

Matthew Freedman

Amit Khandelwal

Jaromir Nosal

Theodore Papageorgiou

Emilia Simeonova

Ina Simonovska

Instructor

Thomas Fujiwara

Senior Lecturer

Elizabeth C. Bogan

Lecturer with Rank of Professor

Gregory C. Chow

Peter B. Kenen

Visiting Lecturer with Rank of Professor

Eric S. Maskin

Lecturer

Swati Bhatt

Smita B. Brunnermeier

Jean Baldwin Grossman, also Woodrow Wilson School

Thomas C. Leonard

Jean-Christophe de Swaan

Silvia Weyerbrock, also Woodrow Wilson School

Visiting Lecturer

O. Griffith Sexton

Associated Faculty

Thomas J. Espenshade, Sociology

Jianqing Fan, Operations Research and Financial Engineering

Marc Fleurbaey, Woodrow Wilson School

Adam Meirowitz, Politics

Thomas Romer, Woodrow Wilson School, Politics


Information and Departmental Plan of Study

Further details and updates regarding undergraduate requirements and procedures may be found at the website of the Department of Economics.

Advanced Placement

Students who scored 5 on the AP microeconomics exam are exempted from ECO 100. Students who scored 5 on the AP macroeconomics exam are exempted from ECO 101. Students who scored 5 on the AP statistics exam are exempted from ECO 202. (Note: Exemption from 100 and 101 will be accorded to students who pass the British A-levels with a grade of A, and to those who earn a 7 on the higher-level International Baccalaureate.)

Students exempted from ECO 100, 101, and 202 may still benefit from taking these courses, which provide important basic materials for the study of economics.

The department will permit freshmen to enroll in ECO 310, 311, or 312, subject to the approval of the instructor for the course. The requirements are: (1) completion of, or exemption from, ECO 100, 101, and/or 202, as appropriate in each case, and (2) sufficient knowledge of multivariable calculus and vector and matrix algebra. For the latter, ask the mathematics department to certify that it regards your previous knowledge of mathematics as equivalent to completion of MAT 200, or MAT 201-202, or better.

Prerequisites

To enter the department, a student must complete, by the end of sophomore year, the prerequisite courses ECO 100, 101, 202, and MAT 103 (200) (or equivalents), earning a letter grade of C or better in each. ORF 245 can be substituted for 202; PSY 251 and SOC 301 are not acceptable; WWS 303 may be depending on each year's content. The Statistics requirement cannot be satisfied with Summer Courses taken after the student has begun his/her studies at Princeton, except in unusual circumstances approved by the Departmental Representative.

A meeting for sophomores interested in joining the department will be announced in the spring. Underclass students are welcome to discuss department requirements with the departmental representative. Students considering study abroad are urged to meet with the departmental representative at the earliest opportunity in their freshman year.

Mathematics Prerequisites. MAT 103 (or equivalent) is sufficient preparation for the less mathematical versions of the department's core courses, ECO 300, 301, and 302 (see Core Courses). The sequence MAT 101-102 is acceptable as equivalent to MAT 103, but students with this background should consult with the departmental representative. The more mathematical versions of the department's core courses, ECO 310, 311, and 312, and some other electives, require MAT 200 or better.

Students considering graduate work in economics or finance or who wish to continue in mathematics should take MAT 201-202 (or MAT 203-204, or MAT 217-218) rather than MAT 200, which is a terminal course.

Students who are not considering advanced training, and who wish to take only one 200-level mathematics course, are advised to take MAT 200. This one-semester course covers, in less depth but with applications to economics, topics in multivariable calculus and linear algebra that are also covered in the two-semester advanced calculus sequences (MAT 201-202, 203-204 and 217-218). MAT 201 provides most of the sufficient background for the courses for which MAT 200 is a prerequisite, although some matrix algebra covered in MAT 202 is useful in ECO 310 and ECO 312. MAT 201 alone is acceptable, but the department strongly recommends following it with MAT 202. (Mathematics courses beyond MAT 201 may be taken on a pass/D/fail basis, but the department strongly recommends that they be taken on a graded basis.)

Program of Study

General Requirements. The department requires concentrators to complete, and pass on a graded basis, the following:

Core Courses: Microeconomics (ECO 300 or 310), Macroeconomics (ECO 301 or 311), and Econometrics (ECO 302 or 312), to be completed in the junior year.

Elective courses: Five other departmentals (see Other Departmentals for details).

Junior independent work
Senior thesis
Senior comprehensive exam

Furthermore, the student must have a departmental average of at least C.

Core Courses. All concentrators must pass, on a graded basis, core courses in microeconomics (ECO 300 or 310), macroeconomics (ECO 301 or 311), and econometrics (ECO 302 or 312). These courses must be completed during or before the junior year. 

Each of the three core courses is offered in two versions to accommodate different levels of preparation in mathematics: ECO 300, 301, and 302 require MAT 103 or equivalent; ECO 310, 311, and 312 require MAT 200, or MAT 201 plus MAT 202.

Qualified students are encouraged to take the more mathematical versions. It is not necessary to take all three courses in the same version.

Other Departmentals. In addition to the three core courses, concentrators must pass, on a graded basis, five other departmental courses. Departmentals may be any 300-, 400-, or 500-level economics course, or an approved cognate (see Cognates).

Students planning a senior thesis with empirical emphasis are strongly encouraged to take ECO 313; students planning a theoretical senior thesis are strongly encouraged to take ECO 317 and/or ECO 418.

Cognates. Concentrators may, with the written approval of the departmental representative before the semester's deadline for the grading option change (the end of the ninth week of the term), designate as economics departmentals up to two upper-level courses from other departments. The cognate approval form, which is submitted to the departmental representative, is available in the Forms section of the department's website.

Independent Work

Junior Independent Work and Senior Thesis. Independent work is designed to afford concentrators the opportunity to identify and explore their research interests in depth. Students are expected to develop a carefully reasoned exposition that critically analyzes a problem using basic principles of economics. Juniors complete a year-long research project, which consists of a research prospectus submitted in December and a final paper submitted in April. The senior thesis is expected to be more extensive, with a topic of greater scope and correspondingly broader analysis and interpretation. Further details, from the assignment of advisers to the final deadlines, are available in the junior independent work and senior thesis sections of the department's website.

Senior Departmental Examination

The senior comprehensive examination is a written exam that covers the department's required courses (intermediate microeconomics, macroeconomics, and econometrics). The senior comprehensive exam grade will appear on the student's transcript.

Study Abroad

Potential economics concentrators who expect to study abroad for one or two semesters must plan well ahead. Because the department only rarely permits core courses to be taken abroad, and because core courses may not be postponed to senior year, potential economics concentrators planning study abroad must complete the appropriate core courses in their sophomore year. It is almost never feasible to spend a semester abroad in the senior year.

Economics courses taken abroad may be preapproved as departmentals by the departmental representative, ordinarily up to one per semester. Plans for junior independent work must also be approved in advance.

Preparation for Graduate Study

Graduate study in economics requires special preparation and advance planning, starting as early as the freshman year. Students contemplating graduate study in economics should see the departmental representative as early as possible. Preparation for graduate school should include the following: the more mathematical versions of the core courses (310, 311, and 312), two years of calculus (up through MAT 202, 204, or 218), two or more upper-level mathematics courses such as MAT 301, 305, 309, 310, 314, or 325, and an advanced econometrics or theory course such as ECO 313 or 317. Students may find the Program in Applied and Computational Mathematics or the Program in Engineering and Management Systems an interesting option. It is not necessary to be an economics concentrator to enter a graduate economics program, but the economics courses listed above are highly recommended. Graduate courses in economics (500 level) are open to qualified undergraduates. These courses are very demanding and must be started in the fall term. Taking one of these courses can be useful for students who intend to enter an economics graduate program, because it begins the student's advanced training, gives the student a flavor of graduate school, and provides evidence during the admissions process of the ability to do advanced work in economics.


Courses


ECO 100 Introduction to Microeconomics   Fall, Spring SA

How price systems solve social choice problems. The operation of competitive, oligopolistic, and monopolistic product and factor markets. Proposals to alter markets (such as income redistribution, regulation of monopolies, pollution controls). Comparison of the operation of price systems with alternative methods of making social decisions. Two lectures, one class. H. Farber, U. Reinhardt

ECO 101 Introduction to Macroeconomics   Fall, Spring SA

The theory of the determination of the level of national income and economic activity, including an examination of the monetary system. Emphasis on such economic problems as inflation, unemployment, and recession, and on the appropriate policy responses. Some attention is also paid to international economic issues and to problems of economic growth. Two lectures, one class. E. Bogan, A. Adsera

ECO 108 Games of Strategy   Not offered this year SA

The basic ideas of game theory. Examines strategically interdependent choices, where each person must take into account how the others will react. Involves little formal theorizing; the approach is through examples and case studies drawn from business, politics, sports, and even fiction and movies. Two lectures, one preceptorial. Staff

ECO 200 Advanced Principles of Economics: Concepts and Applications   Not offered this year SA

This course, which is taught in three modules, builds on students' previous knowledge of economic theory by analyzing a number of economic issues of topical and intellectual interest. Module topics, which vary from year to year, may include game theory, international trade, health and economic development, monetary policy, and industrial organizations. Designed for first-year students who have completed a rigorous year of economics before coming to Princeton. Two 90-minute lectures, one preceptorial. Staff

ECO 202 Statistics and Data Analysis for Economics   Spring QR

An introduction to probability and statistical methods for empirical work in economics. Probability, random variables, sampling, descriptive statistics, probability distributions, estimation and hypothesis testing, introduction to the regression model. Economic data sources, economic applications, and the use of statistical software packages will be emphasized. Two 90-minute classes, one preceptorial. Prerequisites: 100 and 101, MAT 103. U. Mueller

ECO 300 Microeconomic Theory   Fall SA

This class is about markets. When do they work? When do they fail? And what can be done about it? Over the course of study the class will cover (1) choices made by consumers and firms, (2) competitive equilibrium, and (3) market failures. It will also touch on game theory and information economics. Two lectures, one class. Prerequisites: 100, MAT 103. S. Bhatt

ECO 301 Macroeconomics   Spring SA

The determinants of national income, unemployment, and inflation. Includes analysis of business cycle fluctuations, monetary and fiscal policy, consumption and saving, investment, growth, and international macroeconomics issues. Uses mostly verbal and geometric arguments. Two lectures, one class. Prerequisites: 100 and 101. N. Kiyotaki

ECO 302 Econometrics   Fall QR

The objective of this course is to prepare students for basic empirical work in economics. In particular, topics will include basic data analysis, regression analysis, testing, and forecasting. Students will be provided with the opportunity to use actual economic data to test economic theories. Prerequisites: 100 or 101, and 202, or ORF 245; MAT 103. Two 90-minute classes, one preceptorial. K. Evdokimov

ECO 310 Microeconomic Theory: A Mathematical Approach   Fall, Spring SA

Consumer and firm behavior, market structures, and the determination of value. Some attention is given to the interdependence of markets, to the social consequences of externalities in the economy, and to their policy implications. Uses multivariable calculus and linear algebra to treat the topics in greater depth and to better prepare for the 300-level courses on financial markets. Two lectures, one class. Prerequisites: 100; MAT 200 or 201. D. Abreu, W. Pesendorfer

ECO 311 Macroeconomics: A Mathematical Approach   Spring SA

The determinants of national income, unemployment, and inflation. Includes analysis of business cycle fluctuations, monetary and fiscal policy, consumption and saving, investment, growth, and international macroeconomic issues. Uses more formal mathematical models to treat the topics in greater depth. Two lectures, one class. Prerequisites: 100 and 101; MAT 200 or 201 or equivalent. T. Papageorgiou

ECO 312 Econometrics: A Mathematical Approach   Fall QR

Statistical analysis of economic data. The two-variable regression model, multiple regression. Techniques for dealing with violations of the regression model's assumptions, including autocorrelation, heteroscedasticity, specification error, and measurement error. Dummy variables, discrete-choice models, time series models, and forecasting. Introduction to simultaneous equations. Estimation and testing of economic models will be an important part of the course. Prerequisites: 100 and 101 and 202 (or ORF 245); MAT 200 or 201 or equivalent. Two 90-minute lectures, one class. A. Norets

ECO 313 Econometric Applications   Spring QR

This course provides hands-on experience in econometric analysis designed to help students to acquire the skills necessary to carry out their own empirical research in economics. Various aspects of empirical research in economics will be covered, including development of testable economic models, appropriate use of data, and specification and estimation of econometric models. Prerequisites: 302 or 312; and calculus. Two lectures, one preceptorial. H. Farber

ECO 315 Topics in Macroeconomics   Spring SA

Designed to provide students with the opportunity to study several topics in macroeconomics in depth, the course is taught in two modules. Module topics, which vary from year to year, may include economic growth, financial markets, political economy of central banking, speculative bubbles and financial panics, among others. Two 90-minute lectures, one preceptorial. T. Papageorgiou

ECO 317 The Economics of Uncertainty   Spring SA

The microeconomic theory of individual decision making under uncertainty and economic interaction under asymmetric information. Topics include expected utility, value of information, risk-sharing in insurance and asset markets, contracting with moral hazard and adverse selection, and auctions. Applications include health insurance and finance. Two lectures, one preceptorial. Prerequisites: 310, MAT 200 or equivalent, and basic probability. S. Morris

ECO 318 Theory of Games (see MAT 308)

ECO 321 Industrial Organization   Spring SA

An economic analysis of the structure of markets and of corporate behavior. The development and interpretation of public policies, including antitrust legislation and direct regulation related to market structure, corporate mergers, restrictive and discriminatory practices, advertising, and research and development. Two lectures, one class. Prerequisites: 300 or 310, and MAT 102 or MAT 103. M. Kalouptsidi

ECO 324 Law and Economics   Fall SA

An introduction to the economics of legal rule-making and enforcement. Application of elementary price theory and welfare analysis to problems and actual cases in the common law--property, contracts, torts--and to criminal and constitutional law. Topics include the Coase Theorem, intellectual property, product liability, deterrence, and social choice. Prerequisite: 100. Two 90-minute lectures. T. Leonard

ECO 328 Disease Ecology, Economics, and Policy (see ENV 304)

ECO 329 Environmental Economics (also ENV 319)   Fall SA

An introduction to the use of economics in thinking about and dealing with environmental issues. Stress on economic externalities and the problem of dealing with them as instances of organizing gains from trade. Applications to a wide variety of problems, among them air pollution (including, importantly, global climate change), water pollution, solid waste and hazardous substances management, species preservation, and population policy. Prerequisite: 100, basic calculus. Two lectures, one preceptorial. S. Brunnermeier

ECO 331 Economics of the Labor Market   Fall SA

Applies microeconomic analysis to the demand for labor, labor supply, and the determination of wages. Examines investments in human capital, unemployment, discrimination, unions, government intervention in the labor market. Empirical findings as well as theoretical models are studied. Two lectures, one preceptorial. Prerequisites: 100, 302, and MAT 102 or 103. O. Ashenfelter

ECO 339 Introduction to Population Problems (also SOC 351)   Not offered this year SA

A survey of demographic trends throughout the world, the factors underlying them, and their social and economic implications, including the analysis of mortality, fertility, migration, changes in composition, problems of prediction, and issues of policy. Two lectures, one preceptorial. Prerequisite: 100. J. Goldstein

ECO 341 Public Finance   Spring SA

The role of government in attaining an efficient allocation of resources and an equitable distribution of income. Emphasis is placed on criteria for the evaluation and selection of public expenditure and tax programs, including the problem of coordinating federal, state, and local finance. Special attention is given to current policy issues. Two lectures, one class or problem-oriented seminar. Prerequisite: 100. A. Shephard

ECO 342 Money and Banking   Fall SA

This course explores the role that money, financial markets and institutions, and monetary policy play in shaping the economic environment. The class investigates why these markets and institutions arise and may lubricate the resource allocation analytically (rather than descriptively), using tolls of economic theory. Two lectures, one class. C. Sims

ECO 349 Economics and Public Policy (see WWS 307)

ECO 351 Economics of Development   Spring SA

Surveys development economics including current issues, historical background, growth theories, trade and development, markets and planning, strategies for poverty alleviation, agriculture, technology, employment, industry, population, education, health, and internal and external finance. Selective attention to particular countries and regimes. Two lectures, one class. Prerequisites: 101 and 300 or 310, or instructor's permission. T. Fujiwara

ECO 352 International Trade   Spring SA

Examination of the causes and economic consequences of international trade in goods and services, investment and migration. Stress on the possibility of aggregate national gains from trade, and the distributional conflicts generated by trade. Analysis of policies regarding these issues from the perspective of economics and political economy. Two lectures, one preceptorial. Prerequisites: MAT 102 or 103, and ECO 300 or 310. S. Weyerbrock

ECO 353 International Monetary Economics   Fall SA

Foreign exchange markets and balance-of-payments accounts. Effects of incomes, prices, interest rates, and exchange rates on trade and capital flows. Effects of exchange rate arrangements and capital mobility on macroeconomic policies. Current policy issues: exchange rate management, macroeconomic policy coordination, managing currency crises, the roles of international institutions. Two lectures, one preceptorial. Prerequisites: 100 and 101. M. Aguiar

ECO 354 Special Topics in Public Affairs (see WWS 476)

ECO 362 Financial Investments   Fall SA

A survey of the field of investments with special emphasis on the valuation of financial assets. Issues studied include how portfolios of assets should be formed, how to measure and control risk, how to evaluate investment performance, and how to test alternative investment strategies and asset pricing models. Prerequisites: 202 or equivalent, 310, and MAT 200. ECO 202 or equivalent may be taken concurrently, but students would remain responsible for statistical concepts as they arise in 362. Two lectures, one preceptorial. H. Hong

ECO 363 Corporate Finance and Financial Institutions   Spring SA

Investigates the financing decisions of companies and financial institutions in the wider context of the workings of financial markets. Topics include capital budgeting, capital structure choice, risk management, liquidity, corporate governance, and the interactions between corporate finance and the workings of financial institutions and markets. Prerequisite: 362. Two lectures, one class. Y. Sannikov

ECO 364 Introduction to Financial Mathematics (see ORF 335)

ECO 370 American Economic History (also HIS 378)   Not offered this year HA

Survey of the growth and development of the U.S. economy from colonial times to the present. Introduction to the use of economic models and quantitative evidence in interpreting significant historical issues. Emphasis on technological change, property rights, credit markets, and labor markets. Two lectures, one preceptorial. Prerequisites: 100 and 101. E. Bogan

ECO 371 Topics in Country and Regional Economics (also LAS 346)   SA

These courses will provide an opportunity to apply the concepts and methods studied in economics core courses and electives to analyze the economic problems confronting particular countries or groups of countries. The choice of the country or region, and of the economic problem, will change from year to year. Prerequisites depend on topic. Two 90-minute lectures. Staff

ECO 372 Topics in Country and Regional Economics (also EPS 342)   Fall SA

These courses will provide an opportunity to apply the concepts and methods studied in economics core courses and electives to analyze the economic problems confronting particular countries or groups of countries. The choice of the country or region, and of the economic problem, will change from year to year. Prerequisites depend on topic. Two 90-minute lectures. S. Weyerbrock

ECO 379 The Chinese Economy (also EAS 346)   Fall SA

Economic analysis of the Chinese economy after 1949. Economic planning, market institutions, agriculture, industry, consumption, national income and capital formation, population and human capital, finance, banking, foreign trade and investment, economic reforms since 1979, and current issues. Prerequisites: 100 and 101. Two 90-minute lectures. G. Chow

ECO 385 Ethics and Economics (also CHV 345)   Not offered this year EM

Introduction to ethical issues in market exchange and in laws that regulate it. How ethical commitments evolve and influence cooperation. The moral dimension of low wages, price discrimination, distribution of resources, trade in inalienable property, and the separation of choice and consequence. As time permits, the influence of economic ideas on moral reasoning. Prerequisite: 100. Two 90-minute lectures. T. Leonard

ECO 386 History of Economic Thought (also HIS 311)   HA

A survey of the history of economics, with emphasis on the origins, nature, and evolution of leading economic ideas. This course will situate economic ideas in their historical context, from Aristotle to early 20th century writers, to provide a deeper understanding of economic life and theories of it, emphasizing foundational issues such as the nature of human action and the social good; the role of the state in the economy; and the social and economic consequences of property, prices, money, production, trade and other defining attributes of commercial society. Two 90-minute lectures. Prerequisite: ECO 100. T. Leonard

ECO 414 Introduction to Economic Dynamics   Not offered this year QR

Mathematical analysis of the evolution of markets and economies over time. Topics include growth, business cycles, asset pricing, and responses to policy changes. Particular attention is given to expectations as a determinant of economic behavior. Mathematical methods (difference equations, dynamic optimization, time series analysis) are introduced as needed. Prerequisites: 310, 311, and 312; and either MAT 201 and 202, MAT 203 and 204, or MAT 217; or instructor's permission. Two 90-minute lectures. Staff

ECO 418 Strategy and Information   Fall SA

Explores basic themes in modern game theory and information economics. Non-cooperative solution concepts for games will be developed and applied to the study of repeated games and dynamic interaction in oligopolistic industries, reputation formation, auctions, and bargaining. Prerequisites: MAT 200, 201, or equivalent. Two lectures, one preceptorial. D. Abreu

ECO 448 Economics and Politics   Not offered this year SA

Questions at the intersection of politics and economics will be analyzed using economic methods. Particular emphasis will be placed on mathematical and game theoretic methods. The course will cover economic models of political institutions, such as elections or political parties. Topics include lobbying and interest groups, political business cycles, economic reform, and the size of government. Two 90-minute lectures. Prerequisite: MAT 203 or equivalent, or permission of instructor. W. Pesendorfer

ECO 461 Trading and Securities Markets   Spring SA

An overview of the organization and regulation of major securities markets, such as the stock market. Topics include trading rules and systems in secondary markets and their effects on liquidity, volatility, and information revelation; primary securities markets and securities underwriting; financial intermediation; the structure of securities and the link to corporate governance; rules concerning insider trading and disclosure; and government regulation of financial markets. Prerequisites: 202 or equivalent, 310 and 362; or instructor's permission. Two lectures, one preceptorial. Staff

ECO 462 Portfolio Theory and Asset Management   Fall SA

This course studies the asset allocation decisions and overall management of the risk and return characteristics of portfolios. It focuses on quantitative approaches to portfolio optimization, including dynamic strategies to control risks and to achieve investment goals; empirical studies of asset returns; and the money management industry. Prerequisites: 202 or ORF 245; 310; 362 (no exceptions). Two 90-minute lectures, one preceptorial. Y. Aït-Sahalia, H. Hong

ECO 463 International Financial Markets   Spring SA

A study of the assets and institutions of international financial markets. A key difference between these markets and others is the role of exchange rates relating the value of two or more national currencies. The course studies the market-making institutions, the market conventions and market practices as well as the interrelationships between different assets, their pricing, their trading and their use by corporations. Prerequisites: MAT 200 and ECO 202 or equivalent. Two 90-minute lectures. Staff

ECO 464 Corporate Restructuring   Fall SA

This course applies topics from microeconomics and corporate finance to study corporate restructuring. Topics include mergers, acquisitions, joint ventures, divestiture and share repurchases. Each of these is discussed in the context of the relevant economic theory, institutional and regulatory environment, and with a focus on shareholder value. Prerequisites: 362 and 363. One three-hour seminar. O. Sexton

ECO 465 Options, Futures and Financial Derivatives   Spring SA

Derivative securities are assets whose value depends on the value of other more basic underlying assets. Derivative securities are not only an important asset in their own right, but the central intuition provided by derivative securities pricing--the no-arbitrage principle--ties together many areas in finance. This course discusses the consequences of no-arbitrage for asset pricing and corporate finance. Prerequisites: 310 and 362; or instructor's permission. Two 90-minute lectures. W. Xiong

ECO 466 Fixed Income: Models and Applications   Fall SA

A study of no-arbitrage models of contracts based on interest rates, including bonds, forward and future contracts, swaps, options, and other derivatives. The course develops the theory of arbitrage-free pricing of financial assets in discrete and continuous time, as well as special models that can be used to price and hedge fixed income securities. Prerequisites: ECO 362 (or FIN 501) and ECO 465. Two 90-minute lectures, one class. J. Jurek