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August: ORIENTATION

Review of microeconomics principles with two lectures daily, assignments, and test. Additional review of probability and statistics will be included.



September - December: FIRST SEMESTER


There are four required courses in the first semester:
  • ECON 501: Economic Growth and Development
    This course will serve as an introduction to major ideas and theories of economic growth and development. We will begin by discussing the concept of development itself. What is development? How is it related to economic growth? Next, we will document recent and historical experiences of growth, noting the large disparities across countries in income levels and growth rates. We will examine many theories of economic growth, beginning with the role of savings and investment, which we will discuss in the context of the Solow model. We will also review recent debates over the relative importance of country-level differences in health, education, geography, climate, and institutions, along with research on the economic impacts of trade and macroeconomic policies. Along with these substantive discussions, we will review different theoretical and empirical methodologies for addressing questions about growth and income differences.
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  • ECON 503: Public Finance
    This course will begin by considering the efficiency of market economies and rationales for government intervention in the market, such as public goods, externalities, information-based market failures, and equity. Applications to developing country situations will include environmental policy, education, health care, aid to the poor, and social security. We then move on to the economics of taxation, considering what kinds of taxes are used in developing countries, the economic and distributional effects of taxation, questions of administration and evasion, and options for reform such as the value-added tax.
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  • ECON 509: Developing Country Macroeconomics I
    This course focuses on the relationship between macroeconomic policies and economic growth in developing countries. After examining the links between macroeconomic stability and long-run growth, the rest of the course is divided into three parts. The first part is devoted to the construction of an analytical model that is suitable for analyzing a wide variety of macroeconomic issues in developing countries. This model provides the general framework for a more specific analysis of fiscal and monetary policies in the two remaining parts. In analyzing fiscal policy, the course will consider in particular the requirements of fiscal solvency and the contribution that fiscal policy can make to macroeconomic stability. It will also examine alternative methods for achieving fiscal credibility, including the design of fiscal institutions. The final part of the course will turn to an analysis of central banking, focusing on central bank independence, time consistency of monetary policy, and the design of monetary policy rules in small open economies. This course will include coverage of inflation targeting and capital account opening.
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  • ECON 510 or ECON 511: Econometrics
    These courses focus on methods of bringing economic theory and data together to provide empirical guidance for policy formulation, including the use of computers in econometric analysis. There will be two sections of the course to accommodate fellows with different amounts of prior training in this field.
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January: WINTER STUDY


Each CDE fellow must be enrolled in one January course, selected from two or three courses offered during most January sessions. The topics below are examples of courses that have been offered in recent years.
  • The Practice of Monetary Policy
    This course will cover four practical aspects of modern monetary policy, with a focus on issues relevant to emerging market economies. We will begin with a discussion of the objectives of monetary policy--inflation, output, and financial stability--and the implications of conflicts between these objectives. We will move next to the topic of monetary policy transmission: how the central bank's policy instrument affects the financial markets and the broader economy. The third topic encompasses central bank independence, and the interaction between monetary and fiscal policy. We will conclude with a consideration of alternative policy frameworks, with particular attention to inflation targeting. . Enrollment limited.
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  • Economic Modeling
    A common tool for applied policy work is the Computable General Equilibrium (CGE) model. These models are used extensively by various NGO’s when deciding aid and policy recommendations. A basic understanding of these models can be attained in a relatively short time frame. The great advantage of these models is that they capture the general equilibrium feedback effects of policy proposals on various sectors of the economy. This is of direct importance to applied work, as this allows the identification of the winners and losers from potential policies. The class will begin with a general overview of CGE models, followed by a detailed construction of a simple model for the US. During the latter part of the course, students will create a CGE model for their home country. This exercise will provide them with a basic model to use to examine the possible effects of various changes in national policy.
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  • Tax Policy in Emerging Markets
    Governments in developing and transition economies need to raise tax revenue to finance critical public goods, address other market failures and equity issues, and to avoid problems with debt and inflation. Even under ideal conditions, figuring out how to raise taxes in a way that balances efficiency, equity, and administrative feasibility is a hard problem. But taxation is especially challenging in emerging markets, because of the great difficulty involved in taxing much of the economic activity there, serious problems with tax evasion and administration, and the various imperfections in the economic environment in which taxes are collected. Taxes typically consume between a fifth and a third of the proceeds of economic activity in these nations, and they profoundly affect the incentives to undertake all varieties of economic activity. So in terms of economic growth and welfare, the stakes involved in improving tax policy are potentially quite large. Examples of specific topics that might receive particular emphasis include tax evasion, tax administration, corruption, consideration of how the particular conditions in developing and transition economies may affect the optimal structure of the tax system, options for fundamental tax reform, case studies of the experience with tax reforms in various developing and transition economies, international aspects of taxation, and tax competition among regions and nations. Enrollment limited.
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  • The Political Economy of Economic Strategy
    Achieving economic growth and development requires more than just good policies - success depends on a country's economic strategy working effectively in an integrated manner. The demands of competent policy-making require balancing competing interests, and policy frameworks need to address difficult trade-offs and enlist the political support of key stakeholders. This course will explore the political dimension underlying economic policies - with a focus on how policies fit together into broader strategies. The course will tackle three challenging areas for economic policy - climate change, industrial strategy and social protection. The course will first address each topic individually, from both an economic and political perspective. Then the course will explore the strategic linkages that potentially integrate the policy choices - and examine how a more comprehensive framework can better enlist political support and improve the chances of policy success. This course will reinforce skills for evaluating policy frameworks, exploring the coherence and interdependence of the economic strategy and its likelihood to achieve public objectives. Enrollment limited.
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  • Tools for Time Series Econometrics
    This winter study course is designed to provide students with an introduction to some of the tools they will need to master in order to learn and implement modern time series techniques, which form the basis for empirical work in macroeconomics and related fields. Specifically, the course will introduce students to a useful computer programming language for time series econometrics known as RATS. The course will also review important mathematical tools such as matrix algebra and difference equations, and introduce students to some basic conceptual building blocks for time series analysis, such as moving average process and autoregressive processes. Students planning to enroll in Econ 464/514 "Empirical Methods for Macroeconomics" during the spring semester are strongly encouraged to enroll in this winter study course.
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  • Independent Research (will continue through 2nd semester if sufficient progress is made)
    For those CDE fellows who will be pursuing a second semester independent research project, it is required to begin that work during Winter Study. Interested students should consult with a CDE faculty member about designing an appropriate project well in advance of winter study and spring registration. Prerequisites: consent of an instructor and of the CDE Chair. Selection of participants will be limited to those with realistic project proposals and strong first semester performance. Enrollment limited.
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February - May: SECOND SEMESTER


Each CDE fellow must complete four semester courses: 1 writing-intensive course plus 3 electives.

One Writing-Intensive Course: Each CDE fellow must be enrolled in a tutorial format course or in an independent research project.
  • Tutorial format:
    The MA program of the CDE requires a writing-intensive course in the second semester for all participants. Most CDE fellows enroll in one tutorial course selected from several possible topics. All the tutorial courses provide weekly practice in identifying, researching, writing about, presenting, and answering questions on policy arguments under the direct supervision of an experienced faculty member. This training provides excellent preparation for CDE graduates who will assume policy-oriented job roles in their nations. Tutorial participants will meet once a week in pairs with the faculty member. Each week, one student will prepare a policy paper and submit the paper to the professor and to the other student in advance of the meeting. During the meeting, the student who has written the paper will present an argument, evidence, and conclusions. The other student will provide a detailed written critique of the paper based on concepts and evidence from the readings. The professor will join the discussion after each participant has presented and ask questions that highlight or illustrate critical points. During the semester, each participant will write and present 5 policy papers and the same number of critiques. Enrollment limited.
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  • Tutorial example 1: International Financial Institutions
    This tutorial will explore issues in economic development and finance with a focus on writing short papers laying out the critical dimensions of these issues and the appropriate policy measures to deal with them. Topics will include: the lessons of the 1990s for developing economies; speeding up growth in slow-growing economies; dealing with rises in imported food and energy prices; the impact of China's growth on emerging market trade and development; handling capital inflows, foreign investment and foreign portfolio investment; the growth and risks of domestic government debt, economic and financial crises; and country interactions with the IMF and the World Bank.
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  • Tutorial example 2: Development Successes
    Although living standards in most of the world's poor countries have increasingly fallen behind those of the rich industrial countries, a relatively small number of countries that were quite poor in the middle of the last century have achieved dramatic improvements in their incomes since then. These development successes include countries such as Japan, the four dragons (Hong Kong, Korea, Singapore, and Taiwan), the MIT economies (Malaysia, Indonesia, and Thailand), the Asian giants of China and India, as well as non-Asian economies as diverse as Botswana, Chile, and Turkey. This tutorial will explore why these countries have apparently succeeded where many other poor countries have failed. A particular focus of the course will be on extracting insights from the experiences of these success cases about the broad development strategies that have been advocated over the past 50 years by scholars as well as by the international financial institutions.
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  • Tutorial example 3: Role of Social Safety Nets
    Designing and implementing effective national strategies to promote inclusive economic growth can require difficult policy reforms, sometimes with adverse short-term impacts for vulnerable groups within society. Social safety nets provide a pro-poor policy instrument that can balance trade and labor market reform, fiscal adjustments (such as reduced general subsidies) and other economic policies aimed at enabling better market performance. In addition, social safety nets help the poor to cope with shocks to their livelihoods, promoting resilience, human capital development and sometimes high-return risk-taking. This tutorial will offer students the opportunity to explore the role of social safety nets in promoting inclusive economic growth, drawing on case studies from Africa, Asia, Latin America and Eastern Europe. The first part of the tutorial will define social safety nets within the broader context of social protection, examining the diversity of instruments and their linkages to economic growth. The second part will delve more deeply into the design and implementation of effective interventions, assessing program choice, affordability, targeting, incentives and other issues. The third part will analyze the role of social safety nets in supporting economic growth strategies, drawing on international lessons of experience.
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  • ECON 520: Independent Research (continuation of Winter Study Independent Research)
    Students must have already applied and successfully begun to undertake independent research on subjects of their own choosing. This course will involve the individual preparation and presentation to the CDE class of a major research paper. Prerequisites: consent of an instructor and of the CDE Chair. Participants will be limited to those with a previously accepted project proposal and successful Winter Study independent work.
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Three Elective Courses - After designating preferences, CDE fellows will be enrolled in elective courses for the second semester. Enrollment in each is limited.

The following electives are offered MOST years:
  • ECON 502: Institutions and Governance
    Over the last two decades economists have become increasingly aware of the importance of the "Social infrastructure" at various levels of economic activity: capable and honest government officials must be available to formulate and implement policies, markets must be supported by suitable institutional frameworks, property rights must be secure, and contracts reliably enforced. Even the structure of the household, the smallest institution analyzed by economists, has been shown to have an important influence on economic development. This course will survey the growing literature on institutions and governance. Evaluation will be based on several short papers. The class will primarily follow a discussion format.
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  • ECON 504: Computable General Equilibrium (CGE) Modeling
    The Computable General Equilibrium (CGE) model is an important tool for applied policy work. CGE models are the primary tool for many government organizations when evaluating policy alternatives and are also used extensively by various NGO's when deciding aid and policy recommendations. The great advantage of these models is that they capture the general equilibrium feedback effects of policy proposals on various sectors of the economy. This is of great importance to applied work, as this allows the identification of the winners and losers from potential policies. The class will begin with a general overview of CGE models. This overview will be rigorous and mathematical. This course will use the free programming packages GAMS and MPSGE to implement various CGE models using real world data. While no previous computer experience is required, some familiarity with at least one programming language is recommended. During the latter part of the course, students will create a CGE model for a country of their choice and conduct policy experiments using their model. Interested students could continue this project as a potential thesis topic. Format: lecture/discussion. Evaluation will be based on problem sets, two midterms, final project and presentation.
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  • ECON 505: Finance and Development
    This course focuses on the financial system and its role in economic development. The first part explores the functions of finance, how it contributes to growth, and reviews different models of financial sector development and their influence on how governments viewed the sector. It will examine experiences with financial sector repression and subsequent liberalization, and investigate the causes and impact of financial crises. Then it will study how to make finance effective and how to prevent or minimize crises, analyzing government's role as regulator, supervisor, standard setter, contract enforcer, and owner. In this final part, attention will be devoted to the role of institutions (laws, norms, culture) and incentives in financial sector development.
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  • ECON 508: Microfinance
    This course examines savings, credit and insurance among the poor in developing countries. Topics include informal village financial institutions, credit constraints, group lending contracts (as pioneered by the Grameen Bank in Bangladesh), the role of subsidies, savings commitment products and insurance innovations for the poor. The course emphasizes information asymmetries (adverse selection and moral hazard). Readings will include current empirical and theoretical research in development economics. Evaluation will be based on a midterm, a series of short papers and a longer final paper. Format: Seminar. Prerequisites: Economics 511 and instructor permission.
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  • ECON 512: Agriculture and Development Strategy
    This course examines the role of agriculture in the development process, and the effects of government policy on the agricultural sector. We will focus on smallholder agriculture in Africa, and we will particularly examine the role of agricultural development in poverty alleviation and food security. Among other topics to be considered will be land tenure arrangements and their impact on land, forest, and water management; the role of commercialization; and the impacts of trade and globalization. Format: lecture/discussion. Requirements: multiple 5- to 8-page papers, plus occasional assignments based on readings. One long paper may be substituted for the short paper.
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  • ECON 513: Developing Country Macroeconomics II
    This course is a continuation of Econ 509, further analyzing the relationship between macroeconomic policies and economic growth in developing countries. Building on the analytical model developed in the first semester, this course explores issues of monetary and exchange rate policy. It will examine appropriate exchange rate frameworks, with topics that include the equilibrium real exchange rate, the choice of exchange rate regime, exchange rate management, and currency crises in developing countries. Floating exchange rates and inflation targeting will be given special attention. The course will also explore the role of economic strategy in coordinating macroeconomic policies.
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  • ECON 514: Empirical Methods in Macroeconomics
    Macroeconomics and related fields in international finance and development have evolved specialized empirical techniques, known generally as macro-econometrics, which are designed to meet the practical challenges that the data and the empirical questions pose in these fields. The course will introduce the theory and application of these techniques, and students will learn how to implement these techniques using real world data to address practical questions drawn from the fields of macro, international finance and development. Topics to which these techniques will be applied include business cycle analysis and forecasting sources of exchange rate volatility and determinants of long run economic growth. Computer work and programming will be an integral part of the course, but no previous training is expected. Format: seminar. Requirements: short empirical projects, midterm, term paper. Prerequisites: permission of the instructor.
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  • ECON 515: Environmental Policy and Natural Resource Management
    This seminar considers environmental protection and natural resource management as an element of development policy and planning. Economic concepts are applied to environmental and natural resource problems as they relate to developing countries. Questions to be covered include the following: How do institutions affect patterns of resource use? What is the relationship between economic growth and demand for environmental quality? How does trade affect environmental quality and resource exploitation? What are the tradeoffs between efficiency and equity when it comes to environmental protection and natural resource management? What are strategies for measuring and implementing sustainable development? Course subject matter consists of a combination of analytical models and country-specific studies.
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  • ECON 521: Urbanization and Development
    At current rates of growth, the combined population of urban areas in developing countries will double in the next 30 years. The land area devoted to urban use is expected to double even more quickly. The costs of providing housing and infrastructure to accommodate this growth are enormous, but the costs of failing to accommodate urban development may be even larger. The decisions made in response to these challenges will affect the economic performance of these countries and the health and welfare of the urban residents. By affecting global patterns of energy use, these decisions will have broader impacts on the entire planet. This course will focus on these challenges. What are the economic forces that drive the process of urbanization, and how does the level of urbanization affect economic development? How are policies towards housing, transportation, public finance and development affected by urbanization? What policy choices are available, and which are most likely to succeed in dealing with the challenges of urban growth? Format: lecture/discussion. Requirements: a midterm and a final exam, plus a paper that evaluates specific problems, policy alternatives, and provides some analysis of relevant data.
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  • ECON 352: Regulatory Reform and Innovation
    Recent national initiatives and legislative statutes on competitiveness, including the America COMPETES Act, encourage the development of an infrastructure that promotes innovation and competitiveness in the public and private sectors. Yet the organization of our markets and institutions will in part determine the success of such initiatives. The purpose of this course is to examine how current regulatory structure promotes or impedes economic competitiveness. The efficacy of government policies in promoting the competitiveness of industries in local and global markets will be examined in this course. We will focus on a broad spectrum of regulations and regulatory reforms that have affected the transportation, telecommunications, electricity, pharmaceutical, and information technology sectors, as well as policies that have had significant impacts on financial markets, intellectual property rights and the environmental policy. We will also consider the implications of market and regulatory failures. Format: discussion. Requirements: weekly response papers, a midterm and a final paper. No final exam.
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  • ECON 380 Population Economics
    This course is an introduction to the economic analysis of demographic behavior and the economic consequences of demographic change. An important aim is to familiarize students with historical and contemporary trends in fertility, mortality, migration, and family composition, and the implications of these trends for the economy. The course demonstrates the application of microeconomic theory to demographic behavior, including fertility, marriage, and migration. Students are introduced to basic techniques of demographic measurement and mathematical demography. Selected topics include the economic consequences of population growth in developing countries, the economics of fertility and female labor force participation, the effects of an older age structure on the social security system, and the relationship between population growth and natural resources. Format: lecture/discussion. Requirements will include at least one exam, a research paper and a class presentation.
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  • ECON 469 Economics of Global Health and Population
    This course examines issues in global health and population in developing and formerly socialist countries, with a focus on econometric methods and applied microeconomic theory. We will analyze trends in global health and population, the determinants and consequences of changing population health, and approaches to the design, implementation and evaluation of policies to address health and population problems. Specific topics we will discuss include the HIV/AIDS epidemic, labor market returns to health, child mortality and 'missing women,' the mortality crisis in the former Soviet Union, and the long-run impact of disease. Format: lecture/discussion. Requirements: several short papers and econometric exercises, and an empirical research paper.
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