Econ Electives

These are my notes on some of the undergraduate economics electives at UMN and how they relate to topics discussed in Econ 3102.

First, some of the obvious connections:

As you might expect, a course on International Trade (4431W or 4438W for the advanced version) will go into much more detail about some of the topics which we discussed in chapters 16 and 17 of our textbook.¹ A course on International Finance (4432W) has a lot of overlap with a course on international trade, but with more focus on the kinds of money-related concepts we talked about in chapter 17.

Likewise, a course on Money and Banking (4721) will go into much more detail about money and monetary policy.

In chapter 7 of our textbook, we contrasted the Solow Growth Model with a “Malthusian” model of the economy, and used this comparison to discuss how the economy changed after 1800. Economic Development (4331W) goes into more detail about this very important bit of history (arguably the most important bit of history) and also touches on some of the barriers to development that were mentioned in chapter 8.

In 3102, we talked a little bit about inequalities between countries. But another very important topic in economics, and one which we weren’t able to discuss in detail in 3102, is the inequality found within a country. Poverty and Income Inequality (4341) is a class which qualitatively explores inequality within the US, and the efforts to redress it.

While 4341 has the largest focus on inequality, there are many other upper level courses in which the topic of inequality heavily features.

Labor Economics (4531 or 4538 for the advanced version), for example, discusses the wealth inequality and income inequality that can be found between households. The course looks at the job search models we discussed with chapter 6 of Williamson, and also expounds upon the kind of intertemporal decisions we discussed with chapters 9 and 10. In 3102, we discussed how households make decisions to prepare for their future, which they knew with certainty. But in reality, households must make decisions to prepare for uncertain futures. Will I lose my job? Will I get a raise? These common concerns shape the decisions people make, and are important for understanding patterns of work, savings, and inequality.

Financial Economics (4751 or 4758 for the advanced version) also heavily deals with decision making under uncertainty, but with a focus on investment decisions and asset prices (as opposed to Labor Economics which deals with labor prices – wages, that is). When we talked about prices in 3102, where did those prices come from? They were typically just whatever value allowed the markets to clear. But in financial contexts, its important to understand the details of the processes by which prices are determined. Investment risk is another very important topic – one which we only briefly saw in the homework assignment about the two-period firm – which is discussed in more detail in a Financial Economics course.

One of our simplifying assumptions in 3102 was that all our agents were competitive price takers. We had a single “representative firm” which could be thought of as many very small firms, so small that their individual actions have no effect on the market. But what happens when a single firm or a group of firms is big enough to affect prices? This often happens in the real-world, and Industrial Organization (4631) explores the implications this has for the economy.

Another very important economic question is the role of government policy. Sure, we talked about the government quite a bit in 3102, but government spending and taxes were, for the most part, exogenous in our models. The government itself wasn’t an agent. But what if we do think of the government as having goals? What should those goals be? How can it accomplish them? Public Economics (4821) explores these questions.

Finally, courses like Economy of Latin America (4311) or The Chinese Economy (4317) discuss a broad array of topics which we talked about in 3102, with a focus on one particular region of the world. If your favorite parts of 3102 were the occasional tangents about some random bit of history, then consider taking one of these courses.

A few additional caveats:

• Some of these courses cover a broader set of subjects than what is described here. I focused on the connections to 3102’s material.
• There are also some courses I didn’t touch on in this list, such as Econometrics (which is like statistics with a focus on economic applications) or Game Theory (which is one of the most fascinating fields of economics, but has more connections to micro than to macro).
• Another important thing to consider when choosing electives are the pre-requisites. Some of the courses require additional math classes, and are more mathematically intense as a result. Other courses are writing intensive. It’s a good idea to choose courses which match your preferred style of learning.
• This isn’t the full course list, and course offerings vary by semester. Please consult the course catalog or talk to the undergrad econ advisors for more information.