Economics and Art

We’ll take a two-sided approach in this course: We’ll analyze art from the point of view of an economist, and we will understand the economy through the point of view of artworks.

Economics of Art:

This course uses the perspectives and tools of economics to analyze questions arising in connection with culture and the arts. What economic forces influence the creation, presentation, preservation and ownership of art? Should support for the arts be provided through private patronage, philanthropy, or public sector support (i.e. taxes)? How does the mechanism of support for art affect the productivity and creativity of the artist? Does art make a good investment for an individual? If so, why do art museums require donations and public support? What are the impacts on economic vitality and local economic development of cultural and arts organizations? When these impacts arise, how can (or should) they be used for public policy? 

Art of Economics:

Here we will discuss art forms that arise from different economic systems. Our focal points will include the role of art as a tool for economic policy; the role of censorship; culture and economic development. In this section we will also create some art projects (in the studio as well as outside) to discover and represent economic concepts.

Introduction to Economics for Business Students

Economics is the study of how society allocates its scarce resources.

Microeconomics is the study of the behavior of households and firms, whose collective decisions determine how resources are allocated in a free market economy. We will study when markets are likely to produce “efficient” outcomes, and when government intervention may improve on or harm the competitive market outcome. We will use economic theory to analyze issues like a gas tax to change reliance on oil, minimum wages to increase salaries of the working poor, and government subsidies to increase education.

Macroeconomics is the study of the economy as a whole, and in an election year, it’s amazing to study topics that are relevant to our everyday life. We will understand how the size of the US economy is determined, how unemployment is measured, how inflation affects life. We will look at policy options that the government and the Federal Reserve Bank face, and discuss pros and cons of their actions. 

Economic arguments are often used in debates about government policies, discussion of business strategies, and many of life’s other arenas. The goal of the course is to teach you to “think like an economist,” which I hope will help you to understand the world around you, make better economic decisions in your own life, and be a more informed citizen and voter.

Behavioral Economics

Behavioral economics has three basic propositions: People are not fully rational, they are not fully self-interested, and they don’t have full self-control. These propositions are not news to anyone other than economists, who are prone to utter statements such as “Assume that an individual can look infinitely into the future, and induce backwards. 

Our aim is not to re-do psychology- rather, we use insights from psychology to build more informed economic models, form novel predictions, and match those predictions to real life behavior. We analyze individual behavior (such as risk taking, or preference over time), and the interaction between individuals (social preferences including altruism, inequity aversion, public goods contributions). Lastly, we discuss advances in neuro-economics.

Introduction to Macroeconomics

This course will introduce you to the basic tools of macroeconomic theory necessary to analyze contemporary economic problems and their proposed solutions. In particular, we will analyze aggregate economic activity in relation to the level, stability, and growth of national income.

There are three markets in an economy: the goods market (such as the market for apples), the money market, and the labor market. We will analyze the relationship between these, and answer questions such as: When do we have inflation? When does unemployment rise? What are recessions?

Then we will analyze the government’s and the central bank’s (the Fed’s) role in influencing these variables. There has been a recent discussion on whether the Fed should have intervened by decreasing interest rates. What does this mean?

Then we will link one economy to another through international trade and exchange rates. How is the US economy affected if the Japanese Central Bank decides to print money? If there is a recession in China?

We will also follow current events. Through newspaper or periodicals, we will look at the relationship between happiness and wealth; we’ll draw on the current sub-prime mortgage crisis to examine the proper role of the Fed; and we’ll encounter different points of view on globalization in this era of huge trade deficits with China and a sinking dollar.

Introduction to Microeconomics

This course is designed to acquaint you with the basic tools of microeconomics. Economics is the study of how society allocates its scarce resources, and microeconomics is the study of the behavior of households and firms, whose collective decisions determine how resources are allocated in a free market economy. The goal of the course is to teach you to “think like an economist,” which I hope will help you to understand the world around you, make better economic decisions in your own life, and be a more informed citizen and voter.

The course focuses on economic theory and therefore will often rely on abstract concepts. However, the course will emphasize the application of these concepts to real world situations through frequent in-class discussions of current events and interactive learning exercises.

Economics of Strategy

Among the critical tasks facing managers are the creation, implementation and evaluation of a firm’s strategy. This course will provide an understanding of how to evaluate and create strategies for a firm using industry analysis, the boundaries of the firm and the competitive forces as tools.

The framework is taken from industrial organization. Each theoretical idea is matched with a case, where cases are chosen to reflect 100 years of business practice. We analyze monopoly, horizontal and vertical differentiation, entry-exit decisions, patent races, anti-competitive behavior (limit pricing, predatory pricing, excess entry) and their consequences, diversification strategies, economies of scale and scope, and more.

Experimental Economics

We introduce a methodology to make causal inference. Experimentation is an approach (rather than a “field”) that tries tobuild controlled environments so we can tweak variables and see how people respond to changing incentives. Experimentation is a rather new area in economics (about 30 years of history) in which observation of behavior takes place in the laboratory or in the field. Participants engage in a market activity, or make decisions under risk and uncertainty, or bargain for a desirable outcome. Experimental economics allows you to play with incentives, and see how people respond to changing environments.

We play games in risk preference, time preference, social preferences, voluntary contribution, coordination, cooperation, auctions, and more. 

Labor Economics

Labor economics studies how labor markets work; and our interest in the labor market arises both from our personal involvement in it, as well as from the many social policy issues that concern the labor market experiences of different group of workers. 

On the personal front, how we do in the labor market helps determine our wealth, the types of goods we can afford to consume, and our labor-leisure decision.

On the social front, studies in this particular market informs policy makers regarding the following questions, all of which will be discussed during the semester:

  • Why did the labor force participation of women rise steadily throughout the past century in many industrialized countries?
  • What is the impact of immigration on the wage and employment opportunities of native-born workers?
  • Do minimum wages increase the unemployment rate of less-skilled workers?
  • What is the impact of occupational safety and health regulations on employment and earnings?
  • Are government subsidies of investments in human capital an effective way to improve the economic well-being of disadvantaged workers?
  • Why did wage inequality in the US rise so rapidly after 1980?
  • What is the impact of affirmative action programs on the earnings of women and minorities?
  • What is the economic impact of unions, both on their members and on the rest of the economy?
  • Do generous unemployment insurance benefits lengthen the duration of spells of unemployment?
  • Why did the unemployment rate in the US begin to approach the typically higher unemployment rate of European countries after 2008?