Instructor: Assistant Professor Darrell Glaser

Description:

This capstone focuses on topics specific to the field of labor economics, but prior coursework in labor economics is not necessary. Students will learn and be expected to apply discrete choice methods of statistical estimation to an empirical project of their choice that relates to the field of labor economics (with instructor consent). For example one could ask, “how does the socioeconomic composition of a neighborhood affect the probability that a young person attends college?” Discrete choice econometric methods exist, some better than others, to answer this question. Most students will use person-level data compiled by the United States Census Bureau’s Current Population Survey (CPS). At the beginning of the semester, the class will read, analyze and discuss existing research, where discrete choice methods of estimation are applicable and/or used. The middle part of the semester will focus on the development, and enhancement of students’ knowledge of the appropriate econometric methods. Students spend the remainder of the semester completing the empirical research project. This includes the presentation of results to the class and writing a capstone thesis paper.

Instructor: Visiting Professor John Hisnanick

Description:

The last decade of the 1990s has been referred to as the “fabulous decade.” During this time the U.S. economy experienced greater growth, lower unemployment, and lower inflation than any other industrialized nation. Gross Domestic Product (GDP) increased 32 percent, unemployment dropped below 5 percent, and inflation averaged around 4 percent. In addition, the Federal deficit turned into a budget surplus. Economic theory suggests growth will cure poverty, that “a rising tide will lift all boats.” However, over a twenty-year span the U.S. economy and U.S. households went from the “fabulous decade” to the “great recession” and the economic data suggests the recent economic tides (i.e., income and wealth) have flowed uphill, primarily helping those who were already on top. 

The U.S. has always prided itself on the mobility that individuals, families and households achieved through the opportunities afforded from a robust economy with a strong industrial and manufacturing base. Since the middle of the 20th century, a vibrant middle class has been viewed as an antidote to poverty, an incentive for individuals to work and improve their economic position, as well as an answer to those who worried that the income disparity between those in the bottom and top of the income distribution was too large. In the post-war era the American dream of being part of the “middle class” was reached by many, however, discussions, and data, have suggested that this group of households has seen its portion of aggregate income shrinking and that the disparity between the bottom and top of the income distribution is becoming more pronounced. Even before the current recession, the literature argued that the decline in domestic manufacturing, while affecting all U.S. households, most directly impacted the incomes of households in the middle of the distribution. Moreover, with the advent of the current recession, the status of the middle class has been the focal point in the implementation of many fiscal policy initiates, such as the 2008 tax rebates.

How does one go about investigating issues related to disparities in income among individuals, families and households? There is a need for a better understanding of the causes and consequences of inequality, as well as an understanding of the standard practices and procedures used to measure income inequality. In addition, it is also important to understand how poverty is measured in the U.S. and the causes and consequences of being and remaining poor. Income inequality and poverty are interrelated topics. In this seminar students will be introduced to these topics using cross-sectional and longitudinal survey data collected by the U.S. Census Bureau. That is, the Current Population Survey (CPS), March Supplement, the American Community Survey, and The Survey of Income and Program Participation (SIPP) 1996, 2001, 2004 and 2008 panels.

Instructor: Distinguished Visiting Professor Martin Libicki

Description:

War is about choices, and choices are frequently about economics: optimization under uncertainty, game theory, or interactions among multiple rational players in the marketplace of power. Perhaps nowhere in warfare is this more true than with cyberwar.  If systems did not have vulnerabilities - which, themselves, reflect how much investment system owners put into security measures - cyberwar would be impossible. Furthermore, cyberwar is one of the few ways in which states without long-range power capabilities can, nevertheless, damage the U.S. society in systemic ways. Thus, tradeoffs that infrastructure and other private system owners make among security, convenience, and cost may have non-trivial effects on U.S. national security. The purpose of this course is to help students think creatively about the uses and abuses of cyberwar and cyberspace policy.

This course will have fourteen lectures, eight seminars (in which students lead discussions about their own work), and a large number of opportunities for office consultation sessions. The lectures will cover the basics of cyberspace/war, information system security, infrastructure protection, computer crime, rationales for cyber-conflict, and cyberdeterrence. Research on the economics of cyber-security, methodologies for investing in cyber-capabilities determination, analytic methods for understanding deterrence with uncertain attribution, depletion rates of exploits, regulatory strategies, data-quality issues (e.g., for cyber-incidents), or the marketplace for malware - to list a few - are welcome.

Instructor: Visiting Professor Agnieszka Noel

Description:

The recent decades saw a tremendous growth in international capital movements, coupled with an increase in international trade and intense innovation of financial instruments in the international market. The trend towards financial globalization is expected to continue, notwithstanding the occurrence of periodical financial crises. To learn about the mechanisms underpinning global capital movements, we will start with an overview of emerging markets and their relationship with developed economies. From there we will answer fundamental questions as to why some countries attract capital inflows and what type of capital inflows they attract. We will analyze macroeconomic and microeconomic conditions, the exchange rate regime, the balance of payments, the corporate finance and banking sector, the degree of capital market development, market transparency, and political risk. We will also examine indicators of impending financial crisis especially the impact of financial market development (e.g. derivative markets) on the magnitude and volatility of capital flows. We will follow with the empirical research concentrating on the implementation of quantitative methods such as panel estimation in analyzing economic and financial issues related to the international capital movements and/or potential financial crises. Our research will focus on emerging markets: China, India, Eastern Europe, Central Asia, South-East Asia, and Central and South America. We will relate our observations to the situation in the United States and other developed economies, as in today’s economy capital movements are truly global and one cannot analyze the financial situation of a country without placing it in its international context. We will conclude the seminar by sharing our findings described in the individual research papers. You are expected to be familiar with macroeconomics and international economics, as there will be a very limited time for building theoretical foundation. Preferred field courses: FE312 Macroeconomics, FE 314 International Trade and Policy, FE411 Development and Growth or/and FE412 International Trade and Finance.

Instructor: Visiting Professor Agnieszka Noel

Description:

Did you ever wonder why some countries are rich and other countries are poor?  Why some countries grow and their citizens constantly increase their standard of living while others seem to be stuck hopelessly in poverty?  Would you like to find an answer for yourself?  To facilitate your individual research the seminar will be divided into three distinctive parts.

I. First, we will start by an overview of economic growth models (e.g. Harrod-Domar, Solow, Big Push) and theories describing how growth relates to development with a special emphasis on the possible research topics.  We will ask why some countries experience a robust and sustained economic growth and analyze macroeconomic and microeconomic conditions, demographic structure, population growth, human and physical capital endowment, the role of state and market, balance of payments and overall level of integration with global economy in a given country.  We will also look into the most common obstacles to growth. You will be expected to complete an introduction and literature review of your research paper. 

 II. The second part of the seminar will concentrate on the implementation of quantitative methods in analyzing growth and development.  We will review data sources, research methods and basic econometric theory including examples of panel estimation.  At this point you will be expected to complete your data gathering and show your work on the numerical calculations relevant to your project.

 III. The remainder of the seminar will be dedicated to the analytical work on your research paper.  You will be required to contact the instructor every week regarding your progress on the project in addition to completing the required sections of your paper on the assigned dates.  We will conclude the seminar by applying our research findings to the peer critique of final paper presentations.

 You are expected to be familiar with macroeconomics and economics of development and growth, as there will be a very limited time for building theoretical foundation.  Preferred field courses: FE312 Macroeconomics, FE 314 International Trade and Policy, FE411 Development and Growth or/and FE412 International Trade and Finance.

Instructor: Associate Professor Ahmed S. Rahman

Description:

The emerging world now accounts for over half of global economic output (measured in purchasing-power parity).  And a barrage of statistics shows economic power shifting away for the “developed” economics (mainly North America, Western Europe, Japan and Australia) towards emerging ones, especially in Asia.  No social or economic change this big takes place without friction, especially as nations interact with each other more and more.  As such, “globalization” has become a term that evokes anxiety and fear among many.  But it is important to know that globalization is not a zero-sum game, and as our world grows more interdependent, global forces grow ever stronger.  In this seminar, we will analyze the effects of globalization using panel estimation techniques.  Basically, panel data analysis allows you to look at things across time AND space. Students will first learn the statistical technique itself, how variables are measured, and how these variables can be analyzed using panel estimation.  Next students will work on a research project of their choosing using these techniques on a particular topic concerning globalization.  In the last two weeks of class we will reconvene to present your work to the class.

Instructor: Associate Professor Katherine Smith

Description:

I would like each of you to come up with an economic topic or an idea that has sparked your curiosity at some point during your FEC career. I will work with you to narrow that topic into a viable research question. You will then use panel estimation to come up with a quantitative answer to your question of interest. 

Basically, panel data analysis allows you to look at things across time AND space. That is, you can track the same individuals, families, firms, cities, countries (or whatever), across different days, month, years (or whatever). Things get a bit more complicated, but they can also get a lot more interesting. Here’s an example: what is the effect of drunk-driving laws on traffic fatalities? If you had information for different states (some which pass the law, and some which don’t) over time, you can essentially perform a natural experiment: comparing the fatality-rates of states before and after the law is passed with those states that never pass the law gives you a sense of how effective the law was. Panel analysis can provide that insight.

In terms of course structure, we will be meeting as a class for roughly three weeks to read and discuss published academic papers and former student capstones to give you a sense of the scope of the paper and to help foster research ideas. Once you learn the tools of panel analysis, you are to work on your research topic independently. In the last two weeks of class we will reconvene to present your work to the class. During February and March, each of you will meet once a week with me so I can provide feedback on your project.