Program of the Second Student School on Modern Economics

Belarusian Economic Research and OutreachCenter

220088 Беларусь, г.Минск, ул.Захарова, 50Б, к.36

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Program of the Second Student School on Modern Economics

Place:Business Center of the hotel Victoria (Minsk, 59 Pobediteleyave., conference-hall on the 3rd floor)

Dates: January 21-30, 2013

Course description

Microeconomics.

Instructor – Alexander Kovzik, Professor of Economics, University of Wisconsin – Oshkosh (USA),

Day 1 (21 January):Functions of several variables. Inverse demand and supply curves. Equilibrium with linear and nonlinear curves.Shocking the equilibrium. Elasticity: general definition. Marginal revenue and elasticity.The inverse elasticity rule. Market equilibrium: an elasticity interpretation. Tax incidence analysis.Deadweight loss and elasticity.

Day 2(22 January):Utility and indifference curves. A Cobb-Douglas utility function.Constrained consumer choice: interior and corner solutions.Income and substitution effects.Slutsky equation. Compensated demand curves. Cost-of-living adjustments. Deriving labor supply curves.

Short-run and long-run production. Production functions. Isoquant maps and the rate of technical substitution.Returns to scale.Isocost lines. Cost minimization. Relationship between short-run and long-run cost curves.

Day 3(23 January): Profit maximization: first order and second order conditions. Lerner index.Market structures.The supply decision of a competitive firm.Monopoly pricing. Welfare effects of monopoly. Regulating monopolies.Nonuniform pricing: price discrimination and two-part tariffs. Pareto efficiency.Efficiency in product mix.Efficiency in production.Competitive prices and efficiency.Departing from the competitive assumptions.

Econometrics.

Instructors – KaterynaBornukova (theory), MaryiaAkulava and Dzmitry Kruk (practice), BEROC; , ,

Day 1(24 January):Introduction to econometrics. Data types and data analysis.OLS estimator, its properties.Testing parameters. Possible problems: heteroscedasticity, multicollinearity. Misspecification and endogeneity.Sample selection problems.

Practice: OLS regression and coefficient tests in STATA. Testing for possible problems.

Day 2(25 January):Panel Data. Pooled OLS.Fixed effects, random effects.Dealing with autocorrelation in panels. Limited dependent variable models

Practice: panel data and limited dependent variables in Stata.

Day 3(26 January):Introduction to time series. Stationarity.ARMA models.Brief introduction into cointegration, VECM and VAR models.

Testing time series data for stationarity.ARMA modeling.VECM and VAR models.

Macroeconomics.

Instructor – KirylHaiduk, BEROC,

This course aims to introduce students to the basic concepts, models, and tools used in contemporary mainstream macroeconomics. The course will take place over three days. The first day would be devoted to the models of growth. During the second day, a range of important themes would be covered, including inflation, unemployment, and business cycles. On the third day, students would be exposed to a model of open macroeconomics, namely a Dornbusch’s ‘overshooting’ model. The concepts and models taught in the course would not only be introduced in a formal, textbook way, but also applied to interpret performance of the Belarusian economy.

Day 1 (28 January):Schools of thought in macroeconomics: Classical, Keynesian, New classical, New Keynesian, Post-Keynesian, and Austrian; Introduction to economic growth; Models of economic growth: The Solow Model, Ramsey-Cass-Koopmans Model; The Economics of Ideas: Endogenous Growth Theory.

Day 2 (29 January):Economic growth (continued): Overlapping Generations Model; New Classical Economics: Rational expectations, the Phillips Curve; Business cycles, Political business cycle.

Day 3 (30 January):Open Economy Macroeconomics. Dornbusch’s overshooting model.

Literature

Dornbusch, R. (1976) ‘Expectations and exchange rate dynamics’, Journal of Political Economy, 84, December, pp. 1161–1176.

Drazen, A. (2002) Political Economy in Macroeconomics, Princeton University Press, Princeton, New Jersey.

Felderer, B. and Homburg, S. (1992) Macroeconomics and New Macroeconomics, 2nd Edition, Springer-Verlag, Berlin and New York

Jones, C. (2001) Introduction to Economic Growth, 2nd edition, W. Norton and Company, New York.

Romer, D, (2005) Advanced Macroeconomics, 3rd edition, McGraw-Hill/Irwin.

Snowdon, B., Vane, H., and Wynarczyk, P. (1994) A Modern Guide to Macroeconomics: An Introduction to Competing Schools of Thought, Edward Elgar, Cheltenham.