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Mathematics and developmental models in Economics

Syllabus for pre-PhD Distance learning course on Economics

MATHEMATICS AND DEVELOPING MODELS IN ECONOMICS

Arman Martirosyan, PhD, Associate Professor
Yerevan State University, Distance Learning Laboratory

1. Course module description
The course module considers the simulation of specific development economic processes, the problems of choice and the development of solution concept regarding those processes. It deals with theories concerning economic development, models and hypothesis, their advantages and disadvantages prevailingly in terms of their methodology. The course module describes the basic principles of market economy in detail.

2. Objectives of the course module

2.1 To introduce students with the development aspects of economics.
2.2 To raise student’s awareness of the contemporary theories and concepts of economic development.
2.3 To develop vision of economic issues of both local and global character.
2.4 To help students understand basic mathematical principles in economic analyses.
2.5 To develop skills in the choice and application of mathematic methods and developing models in economics.

3. Assessment
Since this is a distance-learning course, assessment will be based only on students’ written work.

  • Weekly written essays – 60%
  • Final essay - 40%

4. Course module program

Class 1 Economic Methodology
- Logical fallacies.
- Algebra and Graphical Analysis in Economics.
- Direct and Inverse Relationship.
- Opportunity Cost.
- Production Possibilities Curve.
- Law of Diminishing Returns and Increasing Cost.
- Specialization and trade.

Readings:

  1. M. Blaug, The Methodology of Economics: Or, How Economists Explain (Cambridge Surveys of Economic Literature) Cambridge 1990.
  2. Takayama, Analytical Methods in Economics, Illinois university 2001.

Assignment 1:
Please, answer the following questions (up to 5 pages):

  • Explain main principles of economic methodology.
  • When fallacy of composition occurs?
  • Explain the differences between direct and inverse relationship?
  • Explain law of increasing cost?

Class 2 Price elasticity of Supply, Demand
- Elasticity along a linear demand curve.
- Elasticity and total revenue.
- Price discrimination.
- Determinants of price elasticity of demand.
- Cross-price elasticity of demand.
- Price elasticity of supply.
- Income elasticity of demand.
- Profit maximization.

Readings:

  1. Hal R. Varian, Instructors Manual Intermediate Microeconomics, W. W. Norton & Company, New York, London, 2003.
  2. Brian R. Binger, Elizabeth Hoffman. Microeconomics with Calculas. 1998.

Assignment 2:
Please, answer the following questions (up to 3 - 4 pages):

  • Explain the idea and the role of elasticity in economics.
  • Give 2 or 3 examples of supply and cross-price demand elasticity.

Class 3 Economic growth and development
- Descriptions of economic growth and development.
- The role of science and innovation in economic development.

Readings:

  1. Barro, Robert J. Determinants of Economic Growth: A Cross-Country Empirical Study. Boston, MA: MIT Press, 1998.
  2. Gillis, Malcolm, Perkins, Dwight H., Roemer, Michael, and Donald R. Snodgrass. Economics of Development. 4th ed., New York: W. W. Norton & Company, 1996.
  3. Todaro, Michael P. Economic Development. Reading, PA: Addison-Wesley Publishing Co, 1996.

Assignment 3:
Please, answer the following questions (up to 5 pages):

  • What differences between economic growth and development?
  • Explain the role of economical and non-economical barriers during the economic development?

Class 4 Classic view of economic development
- Rostow’s stages of growth.
- The dualistic-development thesis.
- New classical economics.
- The role of monetary elements in economic developments.

Readings:

  1. J. Rowe, Theories of Local Economic Development: Linking Theory to Practice, 2009.
  2. J. Schumpeter, The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest and The Business Cycle, 1982.

Assignment 4:
Please, answer the following questions (up to 5 pages):

  • Explain the Rostow’s stages-of-growth model of development?
  • What are the main principles the dualistic-development thesis?

Class 5 Marx’s Theory of Economic development
- Early influence on Marx’s theory.
- Main ideas of Marx’s theory of economic development.
- Main streams of Marx’s ideology.
- Marxist theology.

Readings:

  1. Marx, Capital: A Critique of Political Economy, 1906.
  2. T. Sowell, Marxism: Philosophy and Economics, 1984.

Assignment 5:
Please, answer the following questions (up to 3 pages):

  • Please analyse English political economy and Marx’s theory of economic development?
  • Please, describe and explain historical materialism.

Class 6 Keynesian Thesis of Economic Development
- Inflation and unemployment.
- Fiscal and monetary policies.
- Keynesian theory and new classical economics.
- the Harrod-Domar growth model.

Readings:

  1. Barro R.. Macroeconomics, MIT Press, Cambridge, 1997.
  2. Blanchard and Fischer, Lectures on Macroeconomics, MIT Press, Cambridge,1997.
  3. Richard T. Froyen, Macroeconomics, Theories and Policies, Six Edition, London, 1999.

Assignment 6:
Please, answer the following questions (up to 5 pages):

  • Describe the The main principles of Keynesian theory?
  • Explain Keynesian criticism of classical theory?

Class 7 The Institutional Theory of Development
- The institutional development reforms.
- Indicators of institutional quality – size of government, legal structure and security of property rights, freedom to trade internationally and so on.
- Criticism of classical and Keynesian theories.

Readings:

  1. Coase, Ronald. 1991. Lecture to the memory of Alfred Nobel. The Nobel Foundation. Retrieved November 13, 2008.
  2. Coase, Ronald. 1998. The New Institutional Economics. The American Economic Review 88(2).
  3. Galbraith, John Kenneth. 1973. Power and the useful economist. American Economic Review 63: 1-11.
  4. North, Douglass C. 1990. Institutions, Institutional Change and Economic Performance. Cambridge University Press.

Assignment 7:
Please, answer the following questions (up to 3 pages):

  • Explain the role of institutes in economic development?
  • Make comparative analysis of institutional and Marxist theories of economic development?

Class 8 Closing exam
Based on your interest, choose any topic discussed within this course module and write an analytic essay (15-20 pages).

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