Honours in Economics

Honours Modules

Honours compulsory courses: 1st Semester

ECO4027Z Mathematics and Statistics for Economists
ECO4007Z Microeconomics
ECO4006Z Macroeconomics
ECO4016Z Econometrics

This course introduces: Methodology: positivism and its critics, rationality in economics, development of economic thought on prices and markets: Smith to Keynes. Value and distribution: introduction to theories of surplus (classical and post Keynesian), marginalist theory of distribution and contested exchange. Neoclassical general equilibrium: causes of market failure; information and transaction costs; game theory and oligopoly; post Walrasian economics.

The course studies the principal macroeconomic approaches towards understanding short-run fluctuations in aggregate output and the longer-term determinants of macroeconomic performance. Business cycles are investigated from a traditional Keynesian and New Keynesian perspective, complemented by a discussion on monetary and fiscal policy options. For understanding economic growth, the course reviews the basic Solow growth model as well as new growth theories. Infinite- horizon and overlapping-generations models introduce two important modern approaches to modelling economic growth.

This course provides a solid grounding in the fundamental techniques of econometrics, developing tools with which to estimate models, test hypotheses and generate forecasts of economic activity. It is a basic but thorough introduction to econometrics that assumes little prior knowledge of the subject (although some mathematical and statistical aptitude is required). The main focus is on the Classical Linear Regression Model (CLRM) and the problems encountered when its assumptions are violated (i.e. multicollinearity, heteroscedasticity and autocorrelation). Additional topics include dummy variables, dynamic models and cointegration analysis. The course has a strong practical component in which students learn to apply specialist econometrics software to practical problems.

Honours optional modules: 2nd Semester

Honours students take four options (except for BBusSci students who take three). With the permission of the Graduate Convenor, an Honours student may be permitted to take a maximum of one of the options at Masters level.

Demographic Description & Analysis (1st semester) Moultri (Actuarial Science)
ECO4051Z Development Economics
ECO4020S Economic Problems of Africa
ECO4052Z Environmental Economics
ECO4053Z Financial Economics I
ECO4013Z International Finance I
ECO4026S The Economy and its Financial Markets
ECO4031X Computational Political Economy
ECO4032S Economics of Industry, Regulation and Firms
ECO4028S Policy Analysis
ECO4027S Survey Data

This course covers a range of macro and microeconomic issues of particular relevance to developing countries. Topics covered include the nature and measurement of development, the evolution of development theory, agriculture, privatisation and deregulation, financial liberalisation, industrialisation and trade strategy, transnational corporations and foreign investment, the role of the state and industrial policy, structural adjustment and economic growth in Africa. While key theoretical issues are dealt with, the approach is primarily applied with extensive use made of actual policy experience in a wide range of developing countries. For instance Dave Kaplan, currently the dti chief economist, will lead a seminar on South Africas industrial policy. The course also contains a component applying empirical techniques to determine factors which influence the rate of growth. Jeremy Wakeford will take this seminar.

This course covers a set of topical issues on the economic problems of Africa. The focus is on structural adjustment, the political-economy of growth, and the institutional context of development. Particular attention is paid to labour market issues, poverty and inequality, and the AIDS pandemic. Case studies are drawn from all over Africa (but especially South and Southern Africa). The course starts off with a broad exploration of the problem of growth in Africa, and examines various attempts to explain Africas comparatively dismal record. The effect of political instability on growth and the policy challenges concerning instability is dealt with in some detail. In light of the widespread criticism of World Bank and IMF structural adjustment policies in Africa, the course allocates two sessions to this issue. Readings touch on the impact of structural adjustment on the poor, the political-economy of adjustment, the conduct of the IMF and World Bank, and on the experience of market liberalisation. Particular attention is paid to the policy challenge of addressing poverty and inequality. The South African case, where unemployment is a major determinant of poverty and inequality, is examined in a dedicated session. Other topics covered in the course include the agrarian economy in Africa, AIDS and Human Development in Africa (and a dedicated session on AIDS in South Africa). The course concludes with an examination of the impact and efficacy of aid, and examines alternative policy options (such as debt relief and the new Millennium Africa Plan).

This is an introductory course designed to cover as wide an area as possible. Issues covered in this course are:
Core Material takes up the first eight weeks:-
Market failure: externalities, the environment and the case for government intervention - Coasian and Pigouvian perspectives, Pigouvian taxes and their limitations in theory and practice.
The issue of 'commons' - global and domestic.
Optimal extraction theory: mining and the optimal extraction of non-renewable resources (Hotelling's Law), fisheries and the optimal management of renewable natural resources. Options selected from the following make up the remainder of the course:-
The evolution of environmentalism. the political economy of scarce resources - environmental management and the distribution of income. The politics, philosophy and economics of "the Greens". Sustainability.The value of species - how to allocate funds for protection of species biodiversity. Criteria for the selection of protected area.
International trade and the environment.

The course introduces students to financial markets, including: purposes and functions; portfolio theory; the efficient markets hypothesis; introduction to futures markets and their practical operation; pricing of forward contracts; the mechanics of swaps; trade in options and forward interest rate agreements.

This course exposes participants to the conceptual and methodological issues in international finance. Emphasis will be on contemporary topics, principally (i) international asset markets (covering international money and capital markets, and foreign exchange markets---spot, forward, futures, currency swaps, and options); and (ii) international macroeconomic policies (bearing on economic growth, debt, and foreign aid).

This course is designed to help students appreciate the relationship between the economy and its financial markets so that they may better understand how the economy works how financial markets behave and how they work and interact with each other. The programme is aimed at developing a feel for the rationality of 'the market' and the often discordant sounds and rhythms of financial markets. We hope to develop a stronger sense of how the financial markets anticipate and influence economic policy. We will interact with the data on the economy and the markets using Eviews with which students should be familiar. We will use regression analysis and other econometric techniques to build and anlyse models of the economy and the financial markets. As a result students will be expected to become more perceptive analysts of published financial data and economic events and of the role played by financial markets in promoting economic development.

This course applies evolutionary game-theoretic reasoning to leading problems in political economy, particularly the justification and stability of the social contract. It mixes (self-contained) technical analysis and philosophical argumentation. Its principal applications are to welfare theory and issues in law and economics.

The purpose of this course is a) to explore the competitive dynamics of network industries, and b) to explore how one might regulate these industries to improve social welfare. This is fundamental to those students interested in working in these industries - be it the firms or the regulators (including the competition agency). The component on competitive dynamics will cover topics such as why software firms may encourage a degree of piracy, why television stations tend to broadcast similar programs and schedule them at similar times, how we might price Internet use, why telecoms companies overcharge each other for network interconnection, why airlines engage in code-sharing arrangements and develop hub-and-spoke systems, why a telecoms monopoly chooses not to serve the whole market and how it can limit entry through its interconnection strategy. The regulation component will look at socially optimal pricing of natural monopolies, socially optimal access pricing for networks that are interconnected, why regulators cannot achieve these social optimums and the efficiency/rent trade-offs they face. Sectors covered in the course can be varied to accommodate specific interests amongst the class.

This course will be jointly offered to both economics and statistics honours students. This course examines a range of statistical techniques for modelling survey data and presents methods to compensate for design features for complex sample survey data. These techniques are then applied to a selection of policy issues through the analysis of South Africa household surveys. Under the direction of the instructors, each student will produce a term paper using survey data as one of a major requirements of the course.
Section 1: Analysis of complex sample surveys
Section 2: Social policy issues and the analysis of household survey data

This course will give students exposure to policy issues in a number of key economic domains - industry, trade, HIV-AIDS, resources, regulation and privatisation and fiscal. Students will encounter real policy issues and techniques and tools to deal with them. The course will utilise real policy issues that have emerged. Outputs will take the form of policy briefings, cabinet memorandum and the like and there will be a strong emphasis on discussion and participation in class.