ECONOMICS (ECN) Master profile presentation, 13 August 2015 Profile coordinator, Kurt R. Brekke.

ECONOMICS (ECN)

Master profile presentation, 13 August 2015

Profile coordinator, Kurt R. Brekke

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Presentation Economics profil

1. Introduction

2. Macroeconomic Theory and Policy

3. Applied Microeconomic Theory

4. Econometric Techniques

5. Elective and advanced courses

6. Questions?

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Why study Economics?

• “Economics is key to understanding

the economy and business!”

• Strong tradition at NHH- Agnar Sandmo (Public economics)

- Victor Norman (International trade)

- Finn Kydland (Macroeconomics)

• Top research groups- Choice Lab (Behavioural economics)

- CELE (Center for Empirical Labor Economics)

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Why pursue a degree in Economics?

• ECN equips you with the main tools of the

professional economist,- whether you pursue a career in private companies, the government,

central banking, or international organisations.

• ECN offers thorough training in economic theory and

econometrics providing analytical skills to analyse

core economic questions, such as:1. What are the effects of the financial crisis?2. Why are some mergers not profitable?3. Is taxing wealth a good idea?4. How fast should oil resources be exploited?

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Compulsory courses

• Macroeconomics (Thøgersen, Doppelhofer)

- Growth and business cycles- Inflation and employment- Monetary and fiscal policy

• Microeconomics (Kristiansen, Schroyen)- Demand and consumer behaviour - Competition and firm strategy- Market structure and information

• Econometrics (Balsvik, Nilsen)

- Regression analysis and identification- Panel data methods- Lab exercise and training in Stata

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Macroeconomics – in the «ECN» profile

• Courses in i macroeconomics-Macroeconomic Theory and Policy, mandatory for the

ECN profile-Business Cycle Analysis- Long Term Macroeconomic Analysis- International Macroeconomics-Additional specialised courses (held in Norwegian):

• Penger og bankvesen• Krakk og kriser

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Master courses in macroeconomics – main features

• Modern macroeconomics- Microfoundations- Intertemporal models- An ongoing debate between the agenda-setters in the field

• Relevance- Interaction macroeconomic developments vs. private businesses as well

as the public sector- A global focus- Policy analysis- Macroeconomics & finance

• 3 cases – capturing recent or present issues…- The stock market and the business cycle- Effect of 9/11….- Europe: A business cycle problem or a negative shift in the trend….?

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Norwegian Oil Fund

• Guidelines for oil fund

are subject to revision.

• How should the oil fund

invest?

• What should be the

return rate for fiscal

spending?

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The stock market and the business cycle

USA - S&P 500 Index

Ind

ex

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

1600

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003Source:

United States - GDP, consumption and fixed investmentsAnnualized, q/q real growth rates

GDP

Private consumption

Private fixed investments

Ann

ual

ized

q/q

gro

wth

, per

cen

t-30

-25

-20

-15

-10

-5

0

5

10

15

20

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014Source:

Trend or cycle…, what policies are needed?

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USA - Quarterly GDP, constant prices

US

D, constant 2005 prices, trillions

9

10

11

12

13

14

15

16

17

18

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014Source:

Eurozone, Quarterly GDP, constant prices

EU

R, trillio

n

1,6

1,7

1,8

1,9

2,0

2,1

2,2

2,3

2,4

2,5

2,6

2,7

2,8

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014Source:

….different in China (and in Norway of course…)

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Source: Swedbank

Norway, quarterly GDP, constant prices

Ind

ex, 2

008

= 1

00

, billio

n

300

350

400

450

500

550

600

650

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014Source:

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Two parts:

1. Intro to microeconomics and applications

2. Strategic buyer or seller behaviour

Classroom experiments

Improve your understanding of theoretical models

Illustrate the strengths and weaknesses of the models

Tools for later courses:

Storting vs. Norges Bank: strategic game?

Climate talks: negotiation strategies?

Strategic product positioning: first-mover advantage?

Lower tax on fruit and higher tax on petrol: effects?

Applied Microeconomics

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Applied Microeconomics: Topics

• consumer preferences and demands (do people make consistent

choices?);

• expenditure functions and welfare measurement (is Santa Claus an

economist?);

• public goods and other market failures (why no one wants to pay for a

new road, but everyone will use it);

• basic concepts in game theory (with applications on oligopoly, trade

and tariffs, voting, tennis, law enforcement);

• dynamic games and reputation models (with applications on

advertising, limit capacity, price guarantees, collusion);

• incomplete information (with applications on contract design,

signaling, incentives, and auctions).

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Competition in gasoline market

• NCA prohibited St1

acquistion of Shell retail.

• Concern for market

power and collusion.

• Are the price cycles

evidence for collusion?

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ECN 402 Econometric techniques

• Topics: ordinary least square regression, panel data

techniques, time series, instrumental variables

• Introduction to STATA (a state of the art statistical software)

• Focus on applying techniques using real data and examples

• 5 lab session with good mentoring capacities

• Basis for more advanced courses in econometrics:- ECN430: Econometric methods and applications in macroeconomics and finance- ECO433: Empirical methods for causal analysis

• Important basis for some of our other ECN courses and the

master thesis- Labour Economics- Behavioural Economics- …

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ECN402: Course ambition

• What can you do?- interpret the results of empirical analysis- use software to handle data and conduct econometric analysis- make justified choices between competing regression models- read and understand empirical papers- write an empirical master thesis

• What do you know?- the assumptions of econometric models- the prerequisites for the more advanced courses in econometrics

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ECN402: Course structure

• Stata labs- 5 labs- 3-4 assignments- Feedback on written assignments- Hands-on experience with handling data and using Stata

• Exam- Take home exam in groups (40%)- 3 hour final exam (60%)

• Teaching- Part of the course uses a type of “flipped” classroom structure with

screencast videos to watch before class- Part of the course uses the traditional “lecture” format.

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Elective courses

• Petroleum Economics

• Behavioural Economics

• International Economics

• Development Economics

• Labour Economics

• International Fisheries

Management

• Empirical Industrial Organisation

• Environmental Economics

• Corporate Social

Responsibility

• Business Cycle Analysis

• Long-term Macro-economic

analysis

• Taxes and business strategy

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Female board quotas

• Norway introduced gender board quotas for public limited firms in 2003.

• Do board quotas improve female career opportunities and saleries?

• Do board quotas affect the performance of the companies?

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Advanced courses

• Empirical Methods and Applications in

Macroeconomics and Finance

• Optimization and Microeconomic Theory

• Resource Economics

• International Macroeconomics

• Empirical Strategies for Causal Analysis

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QUESTIONS?