Economics

Economics is concerned with the study of how individuals make decisions and how these decisions affect, and in turn are affected by, the distribution of limited resources in society. It is a quintessential liberal arts subject with a breadth of questions and methodologies that intersect fields like anthropology, computer science, history, psychology, political science, sociology and mathematics. Although economics is often considered as a science that is limited to the study of demand and supply, inflation and unemployment, trade and exchange rates, economic growth, and financial markets, these are but a small sample of topics that concern modern-day economists. In fact, today’s economists research topics as varied as environment (‘how to control global warming?’), marriage markets (‘who marries whom, and why?’), design of institutions (‘which policies reduce political corruption?’), neighbourhood effects (‘whether individual decisions are affected by a desire to conform to social norms’), and urbanisation (‘what explains the formation of cities and specific spatial distribution of individuals within cities?’).

Economics is a science that welcomes inquisitive students and encourages critical thinking through a study of such topics. Courses in the Economics major enhance students’ analytical abilities, mathematical skills and intuitive thinking that are essential for success in any career. In these courses, students will ask a broad range of questions relating to economic outcomes, social processes and political developments, and learn a variety of methodologies—theoretical analysis, experimental approaches, and empirical analysis—that they will then use to analyse and answer these questions. A sustained engagement with such questions prepares Economics majors to become perceptive observers, critical commentators, and engaged members of the world.

STRUCTURE

Class of 2017 and Class of 2018

The Economics major requires students to complete 50 Modular Credits (MC) including a capstone project that is worth 10 MC. Students will take one gateway course, four required courses including at least one of Advanced Microeconomics, Advanced Macroeconomics and Advanced Econometrics, and at least 3 more elective courses.

Class of 2019 onwards

The Economics major requires students to complete 54 MC including a capstone project that is worth 10 MC. The rest of the 44 MC are obtained through coursework that must include one gateway course and four required courses as specified below. In addition to YSS1203, Principles of Economics, at most one other course at the 1000 level can be counted towards the 44 MC requirement.

Gateway Course

YSS1203, Principles Of Economics: This course is designed to serve as an introduction to Economics for prospective majors as well as for non-majors interested in Economics.

Prerequisites: None

Preclusions: If a student has completed A-level Mathematics AND A-level Economics (or equivalent courses in high school), then the student is not allowed to take Principles Of Economics.

Note: Students who do not take Principles Of Economics (either because they are precluded by the above condition or because they have done A-level or equivalent Mathematics and prefer to start directly with Intermediate Microeconomics) must take an additional Economics elective to fulfill the 44 MC requirement.

Required Courses

YSS2203, Intermediate Microeconomics:

Prerequisites: Principles Of Economics or A-level or equivalent Mathematics. To emphasise, prior knowledge of economics is NOT necessary to take Intermediate Microeconomics. If a student has completed A-level or equivalent Mathematics, then he/she is allowed to take Intermediate Microeconomics even if he/she has neither completed A-level or equivalent Economics nor Principles Of Economics. Students without this background may enrol with instructor’s permission.

Preclusions: None

YSS2214, Intermediate Macroeconomics:

Prerequisites: Any one of the following three options: (i) Principles Of Economics (ii) A-level Economics and Mathematics or equivalent economics and mathematics courses (iii) Intermediate Microeconomics.

Preclusions: None

YSS2211, Econometrics:

Prerequisites: Any one of the following three options: (i) Principles Of Economics (ii) A-level Economics and Mathematics or equivalent economics and mathematics courses (iii) Intermediate Microeconomics.

Preclusions: None

One Advanced Course: At least one of the following three advanced courses:

YSS3208, Advanced Microeconomics:

Prerequisites: Intermediate Microeconomics
Preclusions: None

YSS3248, Advanced Macroeconomics:

Prerequisites: Intermediate Macroeconomics
Preclusions: None

YSS3207, Advanced Econometrics:

Prerequisites: Econometrics
Preclusions: None

Capstone

YSS4104, Capstone I:

Prerequisites: Four required courses as listed above plus one more Economics elective at the 3000 or 4000 level.

YSS4104, Capstone II:

Prerequisites: Capstone I

Elective Courses

The Economics major will offer elective courses within two categories: Core courses and Applied Economics.

These categories reflect the nature of the courses that fall within them. Courses in Core Courses will be theoretical and mathematical; courses in Applied Economics will apply economic theory and data analysis techniques to a range of topics. Core courses are especially advisable for those students who want to pursue an academic career (be it a Masters or a PhD in Economics).

In addition to gateway and required courses, students must choose sufficient number of other elective courses to satisfy the 44 MC requirement relevant to the cohort. It is not necessary that all these courses belong to one category. What is more important while choosing the elective courses is that the particular combination of courses should prepare the student for his/her capstone, and ultimately, career ambitions. Students are encouraged to discuss their respective choices with the Head of Studies and their academic advisors.

All of these elective courses will have one or more of the following required courses as prerequisites: (i) Intermediate Microeconomics, (ii) Intermediate Macroeconomics, and (iii) Econometrics. Therefore, it is highly advisable that students in the Economics major complete the above three required courses early on in their undergraduate studies. Please check with the course instructor regarding the specific prerequisites before signing up for any elective course.

CATEGORY I: Core Courses

The following is a sample courses that fall in this category:

  • Advanced Microeconomics
  • Advanced Macroeconomics
  • Advanced Econometrics
  • Mathematics for Economists
  • Introduction to Game Theory
  • Mechanism Design

CATEGORY II: Applied Economics

The following is a sample courses that fall in this category:

  • Behavioural Economics
  • Collective Choice: Values and Environmental Policy
  • Development Economics
  • Firms’ Strategies and Market Competition
  • International Finance
  • International Trade
  • Labour Economics
  • Law and Economics
  • Political Economy
  • Public Economics
  • Urban Economics

The following tables provide sample pathways for students pursuing the Economics major:

Pathway 1: A student without A-Level or equivalent Mathematics
Y1S2 Principles of Economics
Y2S1 Intermediate Microeconomics
Elective Course 1 (Intermediate Microeconomics is a co-requisite)
Y2S2 Intermediate Macroeconomics
Econometrics
Y3S1 At least one of Advanced Microeconomics, Advanced Macroeconomics or Advanced Econometrics.
Elective Course 2
Y3S2 Elective Course 3
Y4S1 Capstone I
Y4S2 Capstone II
Pathway 2: A student with A-Level or equivalent Mathematics
Y1S2
Y2S1 Intermediate Microeconomics
Elective Course 1 (Intermediate Microeconomics is a co-requisite)
Y2S2 Intermediate Macroeconomics
Econometrics
Y3S1 At least one of Advanced Microeconomics, Advanced Macroeconomics or Advanced Econometrics.
Elective Course 2
Y3S2 Elective Course 3
Elective Course 4
Y4S1 Capstone I
Elective Course 5 (In lieu of Principles of Economics)
Y4S2 Capstone II

COURSES

Gateway Courses:

Principles of Economics (YSS1203): Economists are mainly concerned with the study of choice: choices made by consumers (buy the latest gizmo or save the money?), firms (how much to produce and what price to charge?) and policy-makers (bailout the banks or reduce income tax rates?) are all within the purview of economic analysis. This module serves as an introduction to economics and the basic mathematical tools for economic analysis. It covers topics in microeconomics, macroeconomics, univariate calculus, and systems of equations.

Prerequisites/Co-requisite: NIL

Preclusions (conditions under which a student is not allowed to take this course): A level Mathematics AND A-Level Economics (or equivalent mathematics and economics courses).

Note: Students who do not take Principles Of Economics (either because they are precluded or because they have done A level or equivalent Mathematics and prefer to start directly with Intermediate Microeconomics) must take an additional Economics elective.

Required Courses:

Intermediate Microeconomics (YSS2203): Microeconomics analyses individual decision making and its implications for economic outcomes. Here the term ‘individual’ is used broadly to include individuals, households and firms. We deconstruct the demand-supply model by analysing consumers’ choices as outcomes of rational preference maximisation and producers’ decisions as results of profit maximisation in various market structures. We study how equilibrium of demand and supply in competitive markets generates efficient outcomes. We then analyse a variety of instances when markets fail to be efficient. This course will place special emphasis upon mathematical foundations of theoretical models. In particular, we will study and apply techniques in multivariate calculus, and unconstrained and constrained optimisation.

Prerequisites: Principles Of Economics or A level or equivalent Mathematics. To emphasise, prior knowledge of economics is NOT necessary to take Intermediate Microeconomics. If a student has completed A level or equivalent Mathematics, then he/she is allowed to take Intermediate Microeconomics even if he/she has not done A level or equivalent Economics AND Principles of Economics. Students without this background may enrol with instructor’s permission.

Preclusions: NIL

Intermediate Macroeconomics (YSS2214):

Economics is concerned with the study of how individuals make decisions and how these decisions affect, and in turn are affected by, the distribution of limited resources in society. This course introduces students to the formal analysis of the economy as a whole. The goal is to understand how decisions by the firms, consumers and institutions affect the markets, and the welfare implications of such choices for society. Special attention is placed on the effect of government and monetary policies on the economy. Emphasis is placed upon the mathematical foundations of theoretical models.

Prerequisites: Any one of the following three options: (i) Principles Of Economics (ii) A-level Economics and Mathematics or equivalent economics and mathematics courses (iii) Intermediate Microeconomics.

Preclusions: NIL

Econometrics (YSS2211):

Does going to college increase your earnings? Does height have an effect on your wage? Do episodes like the 2013 haze in Singapore have a major impact to the economy? This course introduces students to the statistical methods that economists use to answer this and similar questions. More generally, this is an introduction to the methods used to test economic models and examine empirical relationships, primarily regression analysis. Although much of the course will focus on the mathematical development of the methodology, emphasis is placed on learning by studying and replicating specific case studies that address current economic questions.

Prerequisites: Any one of the following three options: (i) Principles Of Economics (ii) A-level or Economics and Mathematics or equivalent economics and mathematics courses (iii) Intermediate Microeconomics.

Preclusions: NIL

Advanced Microeconomics (YSS3208): 

This broadly covers the same range of topics as ‘Intermediate Microeconomics’. However it has a more intensive treatment of consumer and producer theory, and covers additional topics like choice under uncertainty, game theory, contracting under hidden actions or hidden information, externalities and public goods, asset pricing, auctions, and general equilibrium theory.

Prerequisites: Intermediate Microeconomics.

Preclusions: NIL

Advanced Macroeconomics (YSS3248)

This course serves as an advanced introduction to the modern macroeconomic analysis to understand the causes and consequences of macroeconomic activity fluctuations. We will explore at a deeper level some of the topics covered in Intermediate Macroeconomics, as well as some other research topics. Topics covered may include: economic growth, overlapping generations model and applications, macroeconomics and finance, labor market, etc.

Prerequisites: Intermediate Macroeconomics.

Preclusions: NIL

Advanced Econometrics (YSS3207):

This course broadly covers advanced topics in econometrics. The focus is on time series econometrics and financial econometrics. However, panel data and asymptotic theory are also tackled in this course in more depth than in ‘Econometrics’. This course mixes theory and applied work: theoretical foundations are covered, and the applications of the theory in real life are analysed.

Prerequisites: Econometrics.

Preclusions: NIL

Capstone I (YSS4104):

This research seminar has several components. Faculty will present a series of workshops on research methods. Students find a topic of interest and specify an appropriate research question for their capstone research, explore the existing related literature, identify an appropriate research design to address the question, and learn how to apply empirical and theoretical skills acquired from their courses to the specific question. Each student will also be expected to prepare: (1) an in-depth exploration of the literature related to their area of research interest, and (2) a more specific research proposal.

Prerequisites: Four required courses plus one more Economics elective at the 3000 or 4000 level.
Preclusions: NIL

Capstone II (YSS4104):

The second semester will be a continuation of the process started in Capstone I.  Students will continue to develop their proposals and carry out their projects, culminating in both a written paper and a presentation of their research results.

Prerequisites: Capstone I.
Preclusions: NIL

Electives:

CATEGORY I: Core Courses

Mathematics for Economists (YSS3233):

Modern economics uses mathematical expressions to describe precisely economic concepts and applies mathematical techniques to analyse economic models.  This course will cover topics in mathematics that are essential for the study of economics.  Topics include univariate and multivariate calculus, constrained and unconstrained optimisation, linear algebra, and differential equations.  Special emphasis will be placed on economic applications.

Prerequisites: Intermediate Microeconomics.
Preclusions: NIL

Mechanism Design

Mechanism Design is concerned with the design of decentralised institutions within which agents interact with the aim of attaining specific goals. The focus of analysis is the relationship between the rules that define an institution and their impact on individual incentives and behavior. In this course, we will apply game theory and mathematical techniques to study the abstract mechanism design problem as well as the design of auctions and matching markets.

Prerequisites: Advanced Microeconomics.
Preclusions: NIL

Introduction to Game Theory (YSS1205):

Game theory studies strategic situations where the involved parties impact each other’s welfare through their individual decisions. In such situations, it becomes necessary to think about how others will act while trying to further one’s own goals. Game theory has wide ranging applications and is used to model strategic interactions in both human and biological worlds. This course introduces students to concepts in game theory and their applications.

Prerequisites: NIL
Preclusions: NIL

CATEGORY II: Applied Economics

Behavioural Economics (YSS3203):

The field of behavioral economics draws on insights from other disciplines, especially psychology, to enrich our understanding of economic behavior and decision making generally. Individuals frequently make decisions that systematically depart from the predictions of standard economic models. In this course we will attempt to understand these departures by integrating the psychology of human behavior into economic analysis. Hence, this course analyses all types of decisions made by agents on a daily basis (from which breakfast to have to where to send the kids for education, etc.). In addition, special focus will be put on decision-making in a context of bounded rationality (scarce information, scarcity of time to make decisions, decision making under drugs intoxication etc.).

Prerequisite/Co-requisites: Intermediate Microeconomics.
Preclusions: NIL

Collective Choice: Values and Environmental Economics:

This is a course about evaluating social decisions, in particular when applied to environmental policy. Economics is sometimes taught as if values are not important, or as if they are self-evident. Nowhere is this more visibly wrong than in environmental policy.

Prerequisites: Intermediate Microeconomics.
Preclusions: NIL

Development Economics (YSS3204):

This course focuses on the understanding of the process of economic development. The course will be structured around the four main questions: (1) Why are some countries much poorer than others? (2) What are the main barriers to the process of economic development? (3) What are the main barriers that prevent the poor to escape from poverty?; and (4) Why do these barriers exist and persist?

Prerequisites: Intermediate Microeconomics; Econometrics.
Preclusions: NIL

Firms’ Strategies and Market Competition (YSS2212):

In this course, we will study various strategies that firms deploy when facing market competition and the impact of such strategic behaviour on market outcomes like prices, efficiency, market structure, innovation etc. Examples of firms’ strategies include price discrimination, product differentiation, advertising, collusion, mergers and entry deterrence. We will analyse theoretical models of imperfectly competitive markets to gain insights into firms’ behaviour and functioning of real-world markets.

Prerequisite: Intermediate Microeconomics.
Preclusions: NIL

International Finance (YSS3224):

This course is an overview of international macroeconomic theory and policy. It presents economic theories to foster understanding of international financial markets and the interrelationships of economic aggregates such as GDP, exchange rates, trade balances, etc. Models will be applied to understand the effects and implications of macroeconomic policies in the international arena. The course will also look at relevant current issues: the global financial crisis, international coordination in macroeconomic policy, the economics of the Euro, etc. Students should have a working knowledge of algebra, graphical techniques and the basics of micro- and macro- economics.

Prerequisites:  Intermediate Microeconomics; Intermediate Macroeconomics.
Preclusions: NIL

International Trade (YSS3205):

In this course, we will study the theoretical and empirical foundations and policies of international trade at a fairly abstract and rigorous level. The course materials and lectures will employ mathematics. The issues that will be addressed include the causes of international trade, the gains from trade, the role of international capital movements, the effects of trade and investment barriers, etc. We will also read about real-world areas of trade, such as trade institutions, the interactions between trade and development issues, etc.  We will study models in trade and apply them to questions of interest in the real world.

Prerequisites: Intermediate Microeconomics.
Preclusions: NIL

Labour Economics (YSS3244):

In this course we will investigate the mechanisms by which labor resources are allocated in an economy. Labor market outcomes are intrinsically linked to several decisions: Which school to go? What neighbourhood to live in? What personal image to project? This course analyses how all these decisions impact allocation of labor.

Prerequisites: Intermediate Microeconomics.
Preclusions: NIL

Law and Economics (YSS3206):

An introduction to the relationship between law and economics, including the practical application of microeconomics to several common legal issues: torts, contracts, property, and crime.

Prerequisites/Corequisites: Intermediate Microeconomics.
Preclusions: NIL

Political Economy (YSS3220):

This course focuses on understanding how interactions between political actors influence decisions and outcomes.

Prerequisites: Intermediate Microeconomics; Econometrics.
Preclusions: NIL

Public Economics (YSS3243):

Public economics studies economic policy. We will study the setting of taxes and tariffs, the handling of externalities and the provision of public goods. The course will do so using microeconomic approaches.

Prerequisites/Corequisites: Intermediate Microeconomics.
Preclusions: NIL

Urban Economics:

In this course, students will use economic methodology to understand and design solutions to the various issues (traffic, housing, potable water etc.) that most modern cities face.

Prerequisites: Intermediate Microeconomics.
Preclusions: NIL

CAPSTONE

In their senior year, students will complete their capstone project. A capstone project is a two-semester-long in-depth study that culminates in a written essay and presentation.  The capstone project will be supported and structured through student participation in a research seminar series. This will allow students to proceed with their research in a structured supportive and collaborative environment.

The primary objective of the capstone is to develop and apply the skills required to write original research. It will provide experience that is particularly valuable for students interested in careers that require producing rather than just consuming economic analysis and/or those seeking to pursue graduate programmes (including economics, business, public policy and international relations).

Students use the skills they developed through coursework to design, research, and write a paper on an economics topic of their own choosing. The thesis provides students with the opportunity to tackle larger and more ambitious topics than would typically be assigned in an undergraduate economics course. Applied topics are the most common, and many make use of econometric techniques. Students are expected to develop a carefully reasoned exposition that critically analyses a problem using basic principles of economics. Given the variety of topics and techniques available, it is difficult to give an exact guideline on an appropriate length for these research papers, but a maximum of 10,000 words could serve as a rough guideline. Students with questions about the scale and scope of the question they wish to address are advised to seek input for the teaching faculty supervising their seminar group.

Students may choose from almost any topic in economics that is of interest to them, subject to the approval of the faculty members supervising the research seminar. To give a sense of the scope of possible topics, here are some sample topics:

(a) The role of information in financial markets, (b) The effect of electoral rules on voting behavior, (c) College choice and bounded rationality, (d) The effect of malaria on economic development, (e) Eurozone crisis and its impact on the world economy, (f) Critical analysis of media reports on economic events, (g) The evolution of marriage markets in South-East Asia and its effect on children’s education, and (h) Asian monetary union.

Students will undertake a new project for their capstone. The project should be original in its content and scope. However, if a student has a deep interest and makes a proposal for a significant expansion of the scale and scope of project already written, then the student may approach the Head of Studies for special permission.

Completion of a research project will have two distinct phases:

Semester 1:  The first semester of the capstone project will involve participating in the research seminar organised by the Economics faculty. Early in that term, faculty will present a series of workshops on research methods – perhaps including how to proceed with research projects, tips on finding and using data, tips on using research resources, and a discussion of academic writing (plagiarism, citation, etc).  Students find a topic of interest and specify an appropriate research question, explore the existing related literature, identify an appropriate research method to address the question, and learn how to apply empirical and theoretical skills acquired from their courses to the specific question. Each student will also be expected to give two presentations in the fall term: (1) an in-depth presentation on their area of research interest, and (2) a more specific presentation of their research proposal. Corresponding to these presentations, they will also submit written summaries of their literature review and research proposal.

Semester 2: The second semester of the capstone will continue this process. Students will continue to develop their proposals and carry out their projects, culminating in both a written paper and a presentation of their research results.

ECONOMICS MINOR

Students who wish to minor in Economics are required to complete five full semester Economics courses including Principles Of Economics, Intermediate Microeconomics, Intermediate Macroeconomics and Econometrics. The fifth course may include any other course in the Economics major. Students who do not take Principles Of Economics because either they are precluded from that course or they have done A-level or equivalent Mathematics and prefer to start directly with Intermediate Microeconomics must take another Economics course to fulfill the five-course requirement of the Economics minor.

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