An introduction to the economic way of thinking that includes both micro- and macroeconomic topics. We begin with an analysis of how market supply and demand help allocate resources and discuss market power, market failures, and the role of government regulation. We explore the determination of gross domestic product, the problems of unemployment and inflation, and macroeconomic policy making.
Economics is the study of decision-making and policy-making in the context of a world constrained by scarcity. We aim to help our students understand how decisions are linked to incentives and how policies can help align individual incentives with social objectives, including an efficient use of the world's resources and an equitable distribution of its output. We also aim to equip our students with the rigorous theoretical and empirical tools of our profession to enable them to better analyze and guide the decision making of individuals, the conduct of businesses and nonprofit enterprises, and the policies of governments and international organizations.
The Department aims to ensure that students majoring in Economics (1) understand the framework that professional economists use to analyze social and economic issues; (2) recognize how economic behavior and policies can affect both the aggregate level of prosperity and differentials in prosperity across members of society distinguished by characteristics such as race, gender, and socioeconomic status; (3) have proficient decision-making and problem-solving skills; (4) are competent in writing and speaking; and (5) possess critical-thinking skills that enable them to apply the theoretical and empirical tools of professional economists to a wide range of issues.
ECONOMICS MAJOR: A major in economics requires a minimum of ten courses. Of these, a core of seven must be the following:
- Economics 101 and 102 (introductory economics);
- Calculus 1 or equivalent;
- Economics 250 and 251 (intermediate theory);
- Economics 272 (econometrics; requires Mathematics 146 or equivalent);
- Economics 495 (senior seminar).
The remaining three courses may be selected from among the 300-level economics courses (electives) described in this catalog. In order to declare an economics major, a student must have completed Economics 101.
A typical schedule might be arranged as follows:
First year: Economics 101, 102, and Calculus 1
Sophomore year: Economics 250, 251, and Math 146
Junior year: Economics 272 and 300-level electives
Senior year: Economics 495 and 300-level electives
The major can be completed in fewer than four years, but it is almost impossible to complete the major in less than three years.
CHOOSING ELECTIVES: The economics department offers so many electives that it's helpful to think about how these electives might be grouped to give more intellectual continuity to a course of study. For example, students interested in obtaining a Masters in Business Administration (MBA) and/or having a career in management are encouraged to complete Economics 233 (Accounting and Financial Analysis), an internship, and either Economics 350 or 326. Students interested in obtaining a Ph.D. in economics are encouraged to complete Mathematics 150 (instead of Math 146), Math 120 or equivalent, Math 212, 214, 310, and at least one of Math 330, 332, 341, 342, 370, or 372. Students interested in a career in public policy are encouraged to complete either Politics 101 or UEP 101, an internship or service learning experience, and at least one of the following: Economics 301, 302, 308, 312, 320, 324, 325, 328, or 361.
MINOR: Economics 101, 102, 250, and 251, Calculus 1, and two 300-level courses in economics (or Economics 272 and one 300-level course in economics). Please note that Calculus 1 is a prerequisite for Economics 250 and 251.
WRITING REQUIREMENT: Students majoring in Economics will satisfy the final component of Occidental College's college-wide writing requirement by arranging (with the instructor) for an Economics 300-level course (or Economics 272) to be designated as the student's writing course. The writing requirement must be satisfactorily completed by May of the student's junior year. Students who fail the requirement or who fail to meet the deadline will be required to both take a composition course in the senior year and demonstrate acceptable writing skills in the senior comprehensive in order to graduate. Students should familiarize themselves with the departmental requirement at the time of declaring the major. See the Writing Program and consult the department chair for additional information.
COMPREHENSIVE REQUIREMENT: Met by passing the Major Field Test (MFT) in economics in February of the student's senior year and by completing Economics 495 in the fall semester of the student's senior year. The MFT is administered at the College, and students must sign up for it in the fall semester of their senior year. Students who will be off campus during one of the semesters of their senior year must contact the department chair by the end of their junior year.
HONORS: Majors can earn honors by taking Economics 499 in the fall of their senior year and by writing and defending, in that class, a thesis that is judged by the department faculty to be of honors quality. Enrollment in Economics 499 is limited to students with GPAs of 3.5 or higher (both overall and within the department). Interested students should consult with their academic advisor and then apply to the department chair by end of their junior year.
OFF-CAMPUS AND TRANSFER CREDITS
- Students who have passed a microeconomics or macroeconomics class at another college or university will be allowed to skip Economics 101.
- Economics majors must complete the following courses at Occidental and may not satisfy them with transfer credits: Economics 250, 251, 272, at least two 300-level electives, and their Senior Comprehensives course.
- Students may take one accounting course for College credit, either at Occidental or through transfer credits. Students may not receive College credit for any other business-related course.
- Students who have received a score of 4 or 5 on either AP Calculus test have met the departmental Calculus I major requirement (and the calculus pre-requisite for courses that require Calculus I).
- Students who have received a score of 5 on both the AP Microeconomics test and the AP Macroeconomics test will be allowed to skip Economics 101 and Economics 102. Students who have received a score of 4 or 5 on both the AP Microeconomics test and the AP Macroeconomics test will be allowed to skip Economics 101.
101 - Principles in Economics I
102 - Principles in Economics II
A continuation of Economics 101 that completes the coverage of economic principles by incorporating the development of more sophisticated analytical tools. Microeconomic topics include production costs, the behavior of firms under different market structures (competition, monopoly, and oligopoly), taxation and income distribution, and input markets. Macroeconomic topics include the Keynesian model of output determination, the monetary system, and the effects of fiscal and monetary policies. Prerequisite: Economics 101.
151 - Entrepreneurial Leadership in the 21st Century
The 21st century has witnessed an explosion of practical interest, research, teaching on entrepreneurship and leadership across sectors of economic, social and political life. Entrepreneurial leadership connects critical thinking to creative problem-solving and solution seeking. The range of models includes technology innovators, social entrepreneurs, policy innovators, non-profit leaders, responsible business managers among others. This course will provide students with a synthetic and multi-disciplinary overview to entrepreneurial leadership at the individual, organizational, and societal levels. Students will engage with the latest thinking, practical case-studies, and guest-entrepreneurs from the social, economic, cultural and political spheres. Same as DWA 151
197 - Business Internship
Internship in a business or management setting. Prerequisite: permission of instructor. May not be repeated for credit.
233 - Accounting and Financial Analysis
Accounting principles and practices. Recording financial data, assets, liabilities, owner equity, income and expenses, preparing and analyzing financial statements. Not open to freshmen except by permission of instructor.
250 - Intermediate Micro-Economic Theory
Foundations of microeconomic theory. Topics include the analysis of consumer theory and decision making, the theory of the firm under perfect competition, general equilibrium, and market inefficiency arising from monopolistic/oligopolistic/strategic behavior, incomplete information, externalities, and public goods. Should be completed before the end of the sophomore year. Prerequisites: Economics 102 and Calculus 1 or equivalent. May be taken before or after Economics 251. Should not be taken in the same semester as Economics 251.
251 - Intermediate Macro-Economic Theory
A study of the factors which influence and are involved with the national economy. Aggregate analysis as applied to problems of national income accounting and determination, inflation, unemployment, modern economic growth, and the influence of the money supply. Prerequisites: Economics 102 and Calculus 1 or equivalent. May be taken before or after Economics 250. Should not be taken in the same semester as Economics 250.
272 - Applied Econometrics
The use of regression and correlation to test economic hypotheses. Emphasis will be on the use and interpretation of single equation regression techniques rather than on their derivation. Prerequisites: Economics 102; Calculus 1 and Mathematics 146 or equivalents; one additional Economics course above Economics 102; and familiarity with computers.
CORE REQUIREMENT MET: MATH/SCI
297 - Independent Study in Economics
Application of modern research methods to current problems in economics and related fields.
2 or 4 units
301 - Environmental Economics and Policy
The purpose of this course is to illustrate the role that economics can play in creating and improving environmental policy. We will apply the theories of economic efficiency, cost-benefit analysis, market failure, and property rights to environmental policy and regulation. We will cover the principles of market-based environmental policies and their applications in the world today. We will touch on all aspects of the economy's interaction with the environment including air and water pollution, global warming, environmental health, non-market valuation, and resource extraction. Prerequisite: Economics 101 or 102.
302 - Industrial Organization
A study of firms and industries in the United States economy. Topics include the acquisition and use of market power by firms, strategic behavior of firms in oligopoly markets, and antitrust policy. The course will approach topics from both theoretical and applied perspectives. Prerequisite: Economics 250.
305 - Game Theory
This course is an introduction to the study of strategic interaction using the tools of game theory. The focus of the course is on developing a set of analytical techniques, with the goal of understanding and using game theoretical models in economics. The first part of the course introduces the basic framework and tools of game theory. The second part of the course covers a number of economic (and some non-economic) applications of game theory; specific topics may include auctions, bargaining, voting, and market competition. Prerequisite: Econ 250 or permission of instructor.
307 - Economics of Information
This course focuses on the economic implications of asymmetric information, which exists when one party in a relationship is better informed than another. For example, the seller of a used car has better information about the car's quality than the buyer; the owner of a firm cannot perfectly monitor the effort levels of employees. Asymmetric information represents an important deviation from the perfectly competitive model, and can give rise to inefficient outcomes. Applications that will be covered include corporate governance, labor markets, auctions, and public decision making. Concepts will be covered in a mathematically rigorous way. Prerequisite: Economics 250.
308 - Public Finance
An investigation of the economic principles of "market failure" and government involvement in the economy, especially in the efficiency and income redistribution effects of major U.S. tax/expenditure policies. We will develop a theoretical structure with which to analyze the microeconomic functions of government, and then apply this structure to analyze and evaluate current governmental policies in the areas of social security, health care, welfare reform, the environment, education, and especially the design and reform of the federal tax system. Prerequisite: Economics 250.
309 - Free Market Economics: The Austrian Perspective
Comparative Economic Systems: The Austrian Perspective. The Austrian School of Economics, so-named because of the national origin of its founders, is an alternative approach to economics that emphasizes methodological individualism and subjectivism. The Austrian School of Economics traces its roots back to the works of the Spanish Scholastics of the sixteenth century and stresses the importance of the individual, private property, limited government and the organizing power of the free-market. Students will read from authors such as Menger, Mises, Hayek, Kirzner, Rothbard and Hoppe and evaluate various properties of a state-planned economy versus a decentralized free market economy. Prerequisites: Economics 102.
311 - International Economics
Economic activity in a global context. The first part of the course covers the causes and consequences of international trade, with a consideration of both national welfare and income distribution issues. Coverage then turns to trade policy in theory and practice, with a focus on the current global trading environment under the World Trade Organization. The course finishes by examining international investment and debt issues, including the role played by the International Monetary Fund during global financial crises.
May not be taken for credit by students who have taken DWA 220/POL 232
Prerequisite: Economics 102; or permission of instructor.
312 - International Finance
The theory and analysis of foreign exchange markets, macroeconomic policy-making in an open economy setting, international investment flows, and international financial institutions. The course also examines the international monetary system over the past century and looks at innovations in global financial institutions. Prerequisite: Economics 251.
314 - Economic Institutions in Historical Perspective
This course examines the historical development and the role of institutions underlying market economies. It discusses the many forms which institutions, i.e., social norms, laws, and regulations, affect economic behavior and performance. Based on examples from United States and European economic history, topics will include contract enforcement, trading institutions, political institutions, financial institutions, property rights in land and environmental resources, regulation of labor and capital markets, and the origin and development of one of the most important economic institutions the firm. We will pay particular attention to institutions that emerged in response to market failures and to the changing nature of economic institutions over time. Prerequisite: Economics 102.
315 - Economics of Financial Markets
An empirical and analytical study of financial markets. Topics covered will include net present value calculations, the capital asset pricing model, financial derivatives, the efficient market theory, the term structure of interest rates, and banking. Prerequisites: Economics 250 and 251.
319 - Law and Economics
This course examines the application of economics to the law. Studies of actual cases reveal how economics can be applied to address such questions as 1) whether an action violates the law, 2) who has experienced economic harm as a result of that action, and 3) what is the legally prescribed consequence. Specific applications include property rights related to technical innovation, competition in concentrated industries, and the extent of corporate liability. The primary context is the United States, but other legal systems provide some specific comparisons. Prerequisite: Economics 250
320 - Economic Development
Theoretical and empirical analysis of the process of economic development in Less Developed Countries. After examining several theories of growth and development we will discuss inequality and poverty, the effects of population growth and rural-urban migration, saving and financial markets, international trade, foreign aid and foreign borrowing, agriculture, and the role of the Government. Case studies will be drawn from the development experiences of Asian, Latin American, and African economies. Prerequisite: Economics102.
324 - Economics of Immigration
This course examines the economic causes and consequences of immigration. The focus of the course will be on the United States' experience. However, we will also examine aspects of other international migrations. The course will focus on the economic reasons that motivate people to migrate to other parts of the world, the labor market and fiscal impacts of immigration on sending and receiving countries, and the economic consequences of U.S. immigration policy choices. Prerequisite: Economics 101.
325 - Labor Economics
The goal of Labor Economics is to enable you to use economic analysis and reasoning to understand wage and employment determination in U.S. labor markets. This course will expose you to current theoretical and empirical debates within the discipline. We will cover such topics as labor force participation, labor demand unemployment, labor mobility, wage structure, labor unions, human capital investments (education and training), internal labor markets, and labor market discrimination. Relevant public policy issues such as the minimum wage, living wage ordinances, compensating wage differentials, immigration policy, affirmative action, income inequality, and welfare programs also will be addressed in this course. Prerequisite: Economics 250.
326 - Economics of Human Resource Management
An application of economic analysis to various topics in personnel economics, including compensation and incentives, hiring, training, downsizing/buyouts, stock options, pensions, and teams, among many others. In order to add realism to, and applications for the analysis, students will discuss and evaluate numerous real-world mini-cases and more formal case studies. Students will be evaluated on the quality of their written work, problem sets, examinations, and discussion, and a variety of class formats will be used. Prerequisite: Economics 250. Note: students who take this course may not take Professor Moore's section of Economics 495.
327 - Economics of Gender- Marriage, Motherhood & Money
An examination of the historical and contemporary economic positions of women in the United States, this course is designed as an overview of major theories, trends and debates on the topic of gender in the labor market. We will examine gender differences in economic outcomes through the use of economic models, including feminist extensions and critiques of such models. Topics include: the family as an economic unit; gender differences in education, work, training and income; and the economics of marriage, divorce and fertility. Course prerequisites: Economics 102
May not be taken by students who have credit for Economics 328.
328 - Economics of Race and Gender
An examination of the historical and contemporary economic positions of women and minorities. Topics include the economics of slavery, racial and sexual discrimination, labor market segmentation, wage differentials, labor force participation, red-lining, and income inequality. Relevant public policy issues such as affirmative action and welfare also will be addressed. Prerequisite: Economics 102.
May not be taken by students who have credit for Economics 327.
331 - Radical Economic Thought
Econ 330: Radical Economic Thought An introduction to the history of radical philosophical alternatives to neoclassical and Keynesian economics. A critique of these mainstream schools is followed by the development of competing radical alternatives, with the analytical focus on concepts of economic surplus and social class, exploitation, alienation, and theories of capitalist development, crisis, and transformation. Ethnographic case studies provide examples of archaic and contemporary alternative economic practices. Special attention is paid to philosophies of human nature, the labor process, problems of racism and sexism, imperialism, current US economic problems and socialist alternatives. Prerequisite: Economics 102
337 - The Great Depression
The Great Depression of the 1930s was the most significant crisis of capitalism in modern history. It was global in its reach, decreasing economic output and production and bringing international trade and finance to a halt. Businesses and households suffered from banking crises, the restriction of credit, as well as the loss of employment. In the recent 2008 financial crisis, the memory of the Great Depression has often been invoked as a possible worst-case scenario. In this course, we will study the economic and historical circumstances that led to the instability of the economies in the 1920s and the devastating crash that followed. We will learn about the underlying economic models that explain the devastating economic collapse and analyze the political, social, and cultural ramifications of the widespread economic crisis. These include the political challenges to the existing systems of parliamentary democracy embodied in Fascism and Nazism, as well as those from the left. We will examine the social implications of massive unemployment and mass poverty, including homelessness, family dissolution, and "hoboism." We will look at cultural responses to the crisis, including attempts to represent the crisis realistically, as in the "New Realism" movements, and efforts to offer distraction from the devastation, such as the Shirley Temple and Busby Berkeley Hollywood films. We will also discuss the role of the interwar Gold Standard in propagating the crisis and look at policy measures taken to stimulate economic activity. Last we will analyze the macroeconomic lessons that have been learned from the Great Depression and look at their implementation and effectiveness in fighting the current economic slump. We will focus on the United States and selected European nations. Prerequisite: Economics 101 or 102. This is the same class as History 337.
340 - Behavioral Economics
This course will provide an introduction to the relatively new field of Behavioral Economics. Standard models of economic theory provide a useful, but not always realistic way to characterize how individuals make decisions. In this course we will investigate the evidence showing how people may behave in ways that are not predicted by this standard theory. Individuals may exhibit nonstandard preferences, nonstandard beliefs, or nonstandard decision-making. We will look at each of these in turn with applications that may include saving, finance, labor supply, gift giving, voting, and addiction. The methodology of the course will not itself deviate from the standard way of doing economics; we will state clear assumptions, build models, determine their logical conclusions, and think about how to empirically test both the assumptions and implications of such models. Prerequisite:Economics 250
350 - Managerial Economics
The application of economic theory and analytical tools to business and management decision making. Topics to be covered will include examples from a variety of fields, including pricing, ethics, entrepreneurial startups, strategy, new products, acquisitions, marketing, human resources, and production. The course will include a large number of case studies with required student presentations. Prerequisite: Economics 250.
351 - Macroeconomic Policy Since the Great Depression
Since the financial crisis of 2008, the U.S. economy has languished: unemployment has remained elevated, job growth has been anemic, and poverty rates have risen to levels not seen in decades. What should policymakers do to help get the U.S. economy out of this mess?
This course revolves around this question. It does so by analyzing the current macroeconomic policy challenges facing the United States from the vantage point of modern macroeconomics and economic history. Students will read state-of-the-art empirical research in macroeconomics and develop a sense for how macroeconomists conduct research and make policy recommendations. Special emphasis will be placed on exposing students to the major developments of U.S. macroeconomic policy since the Great Depression and on the role of history in guiding contemporary macroeconomic policy decisions and debates. Prerequisite: Economics 251.
361 - Topics in Macro-Economic Theory and Policy
This course examines issues in macroeconomics beyond those typically addressed at the intermediate level with a strong emphasis on macroeconomic policy. Specific topics include intertemporal choice in macroeconomics, inflation targeting and the risk management approach to monetary policy, international macroeconomics, recent advances in the study of the aggregate labor market, real business cycle models, government debt and the intertemporal government budget constraint, and time series macroeconomics. Prerequisite: Economics 251.
397 - Independent Study in Economics
Advanced independent research in economics. For example, advanced Econometrics can be taken on an independent study basis. Prerequisites: Economics 250 and 251 or permission of instructor.
495 - Senior Seminar in Economics
An intensive application of economic analysis to issues chosen by the instructor, in consultation with students during the course. The course emphasizes the development of analytical, writing, team-work and presentation skills and is meant to be an opportunity for students to apply their economic training to specific topics. Complete descriptions of the seminars offered in a given year will be mailed out to students prior to the Spring registration. Senior status is required for this course. Students who will be off campus in the fall of their senior year must contact the department chair by the end of their junior year to arrange a substitute senior seminar. Prerequisites: Economics 272 (may be taken concurrently) and either Economics 250 or 251
Section 1 - Austrian Economics
This seminar investigates an alternative approach to economics, the Austrian School of Economics, which emphasizes methodological individualism and subjectivism. The Austrian School traces its roots back to the works of the Spanish Scholastics of the sixteenth century and stress the importance of the individual, private property, limited government and the organizing power of the free-market. Students will read from authors such as Menger, Mises, Hayek, Rothbard and Hoppe and evaluate various properties of a state-planned economy versus a decentralized free market economy. Prerequisites: Economics 272 (may be taken concurrently) and Economics 250. May not be taken by any student who has taken or is planning on taking Economics 309.
Section 2 - Free Market Economics: Personnel Economics
All sections of Economics 495 have the goal of furthering students' analytical thinking, writing, team-work, and presentation skills. This particular section will develop these skills by applying economic analysis to decisions relating to the management of human resources inside the firm. This relatively new applied area of economics is referred to as "personnel economics", and it is a sub-field of labor economics. The following are some of the personnel issues we will investigate, among many others:
1) structuring compensation schemes to motivate workers
2) providing workers with human capital in the form of on-the-job training
3) recruiting, hiring and retaining employees
4) managing quits and dismissals
5) structuring fringe benefits (including stock options and pensions)
6) compensating workers in teams
In order to add realism to, and applications for, the analysis, we will use real world mini-cases as well as more formal Harvard Business School Case Studies. In addition to several shorter writing assignments, each student will analyze the compensation scheme of an actual firm of their choice. Prerequisite: Economics 250 (Economics 272 is helpful) May not be taken by any student who has taken or is planning on taking Economics 326.
Section 3 - Health Economics
This seminar provides an overview of health economics, covering the demographic and socio-economic determinants of health and the design and implementation of health care systems in both domestic and global contexts. Students will apply economic theory to model issues such as addictions and risky health behavior, optimal health provider incentives, and health insurance provision in the face of market failures and inconsistent preferences. Using this grounding, students will read state-of-the-art empirical research on recent policies such as the Oregon Medicaid Experiments, the Affordable Care Act, and pay-for-performance programs in developing countries. Prerequisites: Economics 272 (may be taken concurrently) and Economics 250.
Section 4 - Industrial Organization
This course covers topics in the field of industrial organization, which is the study of firms in markets. We will analyze the acquisition and use of market power, strategic interactions among firms, and the role of government competition policy. Our approach will blend two alternative but complementary methodologies: theoretical modeling of strategic firm behavior and industry equilibrium, and the factual detail found in case studies of specific industries. In addition, students will participate in a semester-long simulation designed to model real-world decision making and complex interactions among firms in an industry. Prerequisites: Economics 272 (may be taken concurrently) and Economics 250. May not be taken by any student who has taken or is planning on taking Economics 302.
499 - Honors Thesis
Independent research with one-on-one faculty mentoring. After a brief introduction to thesis research methods, students will develop a topic and then write and present an honors thesis. Prerequisites: Senior status; Economics 250, 251, and 272 (or permission of the instructor); and permission of the department.
Kirsten Wandschneider, chair
Associate Professor, Economics
M.Sc., Ph.D., University of Illinois
Associate Professor, Economics; Advisory Committee, Urban and Environmental Policy
B.A., Princeton University; Ph.D., UC Santa Barbara
Associate Professor, Economics
B.A., UC Berkeley; Ph.D., MIT
VP for Academic Affairs, Dean of the College, and Professor, Economics
B.A., Monterrey Institute of Technology (ITESM) M.A., Ph.D., Michigan State University
Assistant Professor, Economics
A.B.; Sc.B. Brown University; Ph.D. UC Berkeley
Assistant Professor, Economics
B.A., UC Berkeley; Ph.D., Massachusetts Institute of Technology
Associate Professor, Economics; Affiliated Faculty, Latino/a and Latin American Studies
B.A., UC Riverside; M.A., Ph.D., University of Notre Dame
Elbridge Amos Stuart Professor of Economics
B.A., Pomona College; A.M., Ph.D., Harvard University
Assistant Professor, Economics
B.S. Harvard University; Ph.D. University of California, Berkeley
Laurence de Rycke Professor of Economics
A.B., Hamilton College; M.A., Ph.D., Cornell University
Professor, Economics, Emeritus
B.A., UC Santa Cruz; M.S., Ph.D., University of Wisconsin
On Special Appointment
Adjunct Assistant Professor, Economics
B.A., UCLA; Ph.D., Syracuse University
Adjunct Instructor of Accounting, Economics
B.A., UCLA; Ph.D., Pacific Western University
Adjunct Assistant Professor, Economics
B.A. (DHE), Saratov State University; Ph.D., University of Wyoming