The study of economics broadens our understanding of economic behavior, domestic and international government policies and social institutions. It sharpens our abilities to think clearly and analytically about these and other matters. It may also help students reach a variety of specific career goals. For example, most majors take entry-level positions in business: they are hired by banks and other financial institutions, accounting and management consulting firms, and companies in manufacturing, public utilities and commerce. Some majors go on to earn graduate degrees in economics; they may then work in areas such as business, government service or academia. (Students considering graduate study in economics should consult with a department faculty member about the large number of mathematics courses that are highly recommended.) A background in economics is also excellent preparation for graduate study in law and business. Many of our graduates have gone on to reach exceptional levels of recognition and responsibility in education, government and industry. Students wishing to apply economics courses taken off-campus toward a major in economics must have prior approval from their economics advisor and the chair of the economics and management department. Students wishing to count economics courses taken off-campus toward the requirements of the Business Administration Minor or the International Business Program must have prior approval from the relevant program advisor and the chair of the economics and management department. It is not recommended that courses substituting for ECON 100, 220, 280, 294, 295, 350 and 480 be taken elsewhere. The Management Fellows Program provides selected students the opportunity to combine an economics major with a semester-long internship. For information about this special program, as it applies to economics majors, see the description in Section V at http://www.depauw.edu/catalog/section5.

Course Catalog

Requirements for a major

Economics

Finance

Requirements for a minor

Accounting and Finance for Decision Making

Business Administration

Economics

International Business

Courses in Economics & Management

Introduction to Financial Accounting

The preparation, communication and use of economic information for decision-making, with a focus on external users (e.g., investors, creditors). Topics included are an examination of economic events within a business; terminology, the underlying conceptual framework, and generally accepted accounting principles; and financial statements. Balance sheet coverage includes resources owned, and obligations owed, by a company; the income statement provides insight into the performance of a company; the statement of cash flows identifies sources and uses of a company's cash flows; and financial statement analysis uses this information for a variety of decisions. Both the benefits from using financial accounting information, and its limitations, will be discussed. Prerequisite: ECON 100.

Courses in Economics & Management

Introduction to Economics

Survey of basic concepts and processes in microeconomics and macroeconomics: production, income, demand, supply, cost, price, market structures, money, government finance and international trade and finance.

Contemporary Economic Problems

Analysis of selected current economic problems using economic principles. The economic problems covered by this course vary from semester to semester. Prerequisite: ECON 100.

Off-Campus Extended Studies

An off-campus Extended Studies course devoted to a theme in economics.

On-Campus ES Course

On-Campus Extended Studies course in Economics and Management.

First-Year Seminar

A seminar focused on a theme related to the study of economics. Open only to first-year students. ECON 197 cannot be counted toward an Economics major.

The History of Economic Thought

A treatment of some of the major figures and trends in the history of economic ideas. Topics may vary but will include an examination of the contribution of the Mercantilists, Physiocrats, Classical and Neoclassical economists to our understanding of the individual, value and the market; transactions and their mediation; economic growth and development; the distribution of output; and the roles of capital and labor. Readings may include, among others, the economic writings of Locke, Quesnay, Smith, Ricardo, Marx, Mill, Menger, Bohm-Bawerk, Marshall and Keynes. Prerequisite: ECON 100 or permission of instructor.

Modern Economic History

Emphasizing the American experience, the historical development of modern economic institutions and the role of economic factors in the emergence of contemporary industrial society. Prerequisite: ECON 100.

Economics, Environment, and Corporate Social Responsibility

This course uses economics to explore environmental and natural resource problems, evaluate policies for addressing them, and examine the role of businesses in addressing social and environmental issues. Topics vary and may include energy, water, agriculture, sustainable development, environmental justice, and other timely issues. Prerequisite: ECON 100.

Urban Economics

Survey of basic urban economic problems. Topics covered include why cities exist, where they develop, how they grow and how different activities are arranged within cities. Additional topics covered include economics of urban problems, such as poverty, inadequate housing, congestion, pollution and crime. Prerequisite: ECON 100.

Managerial Accounting

The provision and use of accounting information for internal management decision making. Topics covered include terminology and underlying concepts; costing systems; cost behavior and its role in cost-volume-profit analysis; operating and capital budgeting; performance evaluation; responsibility accounting including segmented reporting and transfer pricing; pricing of products and services; and differential analysis in decision making (e.g., outsourcing decisions and whether to add or drop a segment of the business). Prerequisite: ECON 220

Topics in Economics and Management

A. Economics; B. Management. Detailed study of theoretical and policy aspects of such topics as inflation, resource and product pricing, management, market structure, government-business relations, financial markets and international trade. Prerequisite: varies according to the topic offered. May be repeated for credit with different topics.

Foundations of Corporate Finance

(cross-listed with FIN 293; partially replaces ECON 393, Corporate Finance) This course is an introduction to the foundations of finance with an emphasis on applications and theory that are critical for corporate management. Students will develop an understanding of the major financial decisions within the firm that impact the value of the firm. This course will cover the importance of ethical evaluation and analysis in finance. Topics include ethical issues related to stakeholders, agency theory, the time value of money, risk and return in the context of equities and bonds, interest rates and the term structure, risk management and firm investment decisions, capital budgeting, optimal capital structure, and dividend policy. Prerequisites: ECON 100.

Intermediate Microeconomic Theory

Decision-making by firms, households and other economic units about production, consumption, pricing, resource allocation, market structure and externalities. Prerequisite: ECON 100.

Intermediate Macroeconomic Theory

Analysis of factors determining levels of national income and employment, including consumption, investment and government fiscal policy, with applications to such problems as economic instability, inflation and growth. Prerequisite: ECON 100.

Economics of the Labor Market

Introduction to the method and manner in which the economic analysis of the labor market proceeds. Both traditional and alternative methods of labor market analysis are studied. Topics include demand for and supply of labor, human capital and public policy issues. Prerequisite: ECON 100.

Development Economics

Explores the economic conditions and problems facing developing economies. Examines the main theories and sources of economic growth and development. Topics may include poverty, inequality, education, health care, population growth, urbanization and migration, agrarian reform, trade policy, foreign debt, foreign aid, structural adjustment policies and globalization. Prerequisite: ECON 100.

Asian Economies

Provides an overview of key economic developments in the Asia-Pacific region. Students will have an opportunity to apply economic theories and models to understand the divergent development paths of countries in this region. Topics include the rise of the East Asian economies, the challenges that emerged from the Asian financial crisis, development obstacles of East and South Asian economies and prospects for regionalization. Prerequisites: Econ 100, Econ 295

Comparative Economic Systems

This course analyzes the differences in economic institutions across countries. By looking at the economic incentives in corporations, financial institutions and governments in several different countries, the course will address the question of how different market systems provide incentives to encourage economic growth. By the end of the course, students will be able to analyze the economic implications of a country's institutional arrangements and evaluate the role of government in the economy. Prerequisite: ECON 100.

Introduction to Econometrics

Introduction to the theory and use of quantitative analysis in economics, finance, and business. Key topics developed in this course include descriptive statistics, parameter estimation, hypothesis testing and regression analysis. Specific emphasis is given to the application of regression analysis to understand economic outcomes. Prerequisite: ECON 100. Students who have completed BIO 275 or 375, MATH 141, MATH 247 or PSY 214 will receive only one-half credit for ECON 350.

Investment Analysis and Portfolio Management

The theories of the value of investment instruments are examined. Topics covered include the theories of capital markets and portfolio management. Emphasis is placed on modern portfolio theory. Prerequisite: ECON 350 or permission of instructor.

Mathematical Economics

This course integrates mathematical techniques and economic theory. Mathematical techniques, such as linear algebra and differential calculus, are used to examine the mathematical foundation of the neo-classical paradigm. Economic concepts, such as profit maximization, utility maximization and cost minimization are considered using optimization and comparative static techniques. Prerequisite: ECON 294 and MATH 151 .

Regression and Simulation for Economics and Management

Regression analysis is applied to a variety of economics and management examples and data. Extensive use of Monte Carlo simulation enables deep understanding of chance processes and sampling variability. Advanced Excel applications (such as add-ins and user-defined functions) develop skills useful in other courses and the workplace. Prerequisite: Elementary statistics (such as ECON 350, BIO 275, MATH 141, MATH 247 or PSY 214) or consent of the instructor.

Advanced Topics in Economics and Management

A. Economics; B. Management. Detailed study of theoretical and policy aspects of such topics as inflation, resource and product pricing, management, market structure, government-business relations, financial markets and international trade. Prerequisite: varies according to the topic offered. May be repeated for credit with different topics.

Corporate Finance

The determination of what assets a firm should own and how these assets should be financed, with the goal of maximizing the value of the firm. Topics included are the underlying concepts of corporate finance, financial statement analysis, financial planning, working capital management, capital budgeting, valuation of stocks and bonds, a firm's cost of capital and its optimal capital structure, and dividend policy. Prerequisites: ECON 220 and 350.

Business Policy

A study of the formulation and implementation of business strategy. Topics include planning, control, economic analysis and organization theory. Extensive use is made of case studies. Prerequisite: ECON 280 or permission of instructor.

Public Finance

The economic principles used to analyze government's role in the economy are developed. Microeconomic theory is used to examine government tax and expenditure policies, especially as they affect resource allocation and income distribution. Both efficiency and equity questions are addressed. Topics include expenditure programs designed to affect the allocation of resources (e.g. national defense outlays, income distribution)(e.g. food stamps), and the major forms of taxation (e.g. income and sales taxes). Prerequisite: ECON 294 or permission of instructor.

Labor Economics

This course is concerned with a group of topics on microeconomic aspects of the labor market and a few selected topics on the macroeconomic issues of labor. Building on the models developed in Intermediate Microeconomics, it develops more sophisticated models by incorporating more realistic assumptions in models. It covers topics such as the supply of labor, labor force participation, the demand for labor, reasons for disparity in wages, non-traditional labor models, labor unions and collective bargaining, government regulation of labor markets and labor unions, and macroeconomic causes of cyclical unemployment. Economic aspects of labor unions, bargaining theories of wages, minimum wage legislation, labor supply incentives of various welfare programs, occupational licensure, labor mobility, migration, and discrimination theories are discussed and examined. Students also get an experience in conducting empirical research on a topic of their choice. Prerequisites: ECON 294, ECON 350.

International Economics

The theory of international trade, the balance of payments, foreign exchange markets, international monetary systems, open economy macroeconomics. Prerequisite: ECON 294 and ECON 295 or permission of instructor.

Industrial Structure and Public Policy

Analysis of industrial structure, organization and performance with emphasis on public policy implications. Policy topics which may be considered include business concentration, government enterprises, financial market regulation and the newer social-environmental regulation. Prerequisite: ECON 294.

Game Theory and Strategic Decision-Making for Economics, Finance, and Business

This course will introduce strategic behavior and decision-making in a variety of different scenarios in economics, finance, and business. The course will include both static and dynamic games as well as games of complete and incomplete information. Prerequisite: ECON 294.

Econometrics

Econometrics is the application of statistical methods for the purpose of testing economic and business theories. This course will introduce students to the skills used in empirical research including, but not limited to, data collection, hypothesis testing, model specification, regression analysis, violations of regression assumptions and corrections, dummy variables, time series analysis, limited dependent variable models, and panel models. Extensive focus will be on the intuition and application of econometric methods, and as a result, statistical software will be used extensively. Students will be required to complete an independent research project involving the application of regression analysis.

Health Economics

The purpose of this course is to introduce economic analysis of health and health care within the context of the United States. The course provides an overview of the existing institutions and policies in the United States health care system and examines both the supply-side and the demand-side of health care. Standard microeconomic tools, such as models of imperfect competition, are used to analyze how the current structure influences the allocation and distribution of health services. The course also examines topics such as medical malpractice, Medicare, Medicaid, the cost of prescription drugs, and markets for human organs. The course evaluates the impact of existing policies and proposed reforms on the economically disadvantaged; it considers the appropriate role of government in health care after taking into account the potential of both the market failure and the government failure. The course looks at the latest health care reforms and the advantages and disadvantages of having universal health care of some type in the U.S. This course also compares the current American health care system with those of other countries such as Canada, the U.K., Germany and France. Students also write a semester-long empirical paper on a health economics topic of their choice. Prerequisites: Econ 294, Econ 350.

Money, Banking and the Financial System

Structure, operations and policies of major monetary and banking institutions, including commercial banks, the treasury, the Federal Reserve System and other agencies involved in money creation, monetary policy and international monetary relations. The course also stresses the theory of monetary policy and the relationship between money and economic activity. Prerequisite: ECON 295.

Seminar

Application of economic analysis in research papers to a variety of micro- and macroeconomic issues. Group discussion and criticism of research methods and conclusions. Prerequisite: a major in economics and management or permission of instructor. ECON 480 or ECON 485 is required of all senior Economics and Management majors.

Independent Senior Thesis

Outstanding students in economics may complete an intensive independent research project in their senior year. The project culminates in a written thesis and a public presentation of their research. The thesis is directed by a faculty member in the Department of Economics and Management. Thesis proposals must be approved by the department before a student can register for ECON 485: Prerequisite: Permission of the department. May be taken for 1 semester (1 credit) or in two consecutive semesters (1/2 credit each semester). Not open for pass/fail credit.

Advanced Topics in Economics and Management

A. Economics; B. Management. Detailed study of theoretical and policy aspects of such topics as inflation, resource and product pricing, management, market structure, government-business relations, financial markets and international trade. Prerequisite: varies according to the topic offered. May be repeated for credit with different topics.

Courses in Finance

Introduction to Financial Accounting

The preparation, communication and use of economic information for decision- making, with a focus on external users (e.g., investors, creditors). Topics included are an examination of economic events within a business, terminology and the underlying conceptual and framework of accounting, generally accepted accounting principles and the critical importance of ethical standards, and financial statements. Balance sheet coverage includes resources owned, and obligations owed by a company; the income statement provides insight into the performance of a company; the statement of cash flows identifies sources and uses of a company's cash flows; and financial statement analysis uses this information for a variety of decisions. Both the benefits of using financial accounting information, and its limitations, will be discussed. Prerequisite: ECON 100.

Venture Capital and Entrepreneurial Finance

Entrepreneurs are an important source of innovation and the engine of economic growth. Nevertheless, the entrepreneur's road to success is full of obstacles and unknowns that require careful thinking, planning, and execution. This course will focus on the financial issues entrepreneurs face throughout the lifecycle of the venture and the value creation process. Prerequisite: FIN 220.

Valuation

Understanding the value of an asset and the factors that determine said value is critical to effective decision-making. This course focuses on determining the value of a company. Topics covered include theoretical and applied approaches to valuation, including discounted cash flow models, measuring risk, relative valuation, private and comparable company valuation, price multiples, and real options. Though not required, Corporate Finance and Statistics are recommended. Prerequisite: FIN 220.

Managerial Accounting

The provision and use of accounting information for internal management decision making. Topics covered include terminology and underlying concepts; costing systems; cost behavior and its role in cost-volume-profit analysis; operating and capital budgeting; performance evaluation; responsibility accounting including segmented reporting and transfer pricing; pricing of products and services; and differential analysis in decision making (e.g., outsourcing decisions and whether to add or drop a segment of the business). Prerequisite: ECON 220

Topics in Finance

Topics are chosen from the finance area that extend explorations of content in existing courses or allow exploration of content not duplicated in regular course offerings. May be repeated for credit with different topics. Prerequisites: Open to students by permission of the instructor or to those who satisfy prerequisites determined by the instructor.

Foundations of Corporate Finance

(cross-listed with ECON 293; partially replaces ECON 393, Corporate Finance) This course is an introduction to the foundations of finance with an emphasis on applications and theory that are critical for corporate management. Students will develop an understanding of the major financial decisions within the firm that impact the value of the firm. This course will cover the importance of ethical evaluation and analysis in finance. Topics include ethical issues related to stakeholders, agency theory, the time value of money, risk and return in the context of equities and bonds, interest rates and the term structure, risk management and firm investment decisions, capital budgeting, optimal capital structure, and dividend policy. Prerequisites: ECON 100.

Managerial Economics

This course presents a variety of optimization problems (such as utility and profit maximization) solved by numerical methods (e.g., Excel's Solver) to develop the economic way of thinking in entrepreneurs, managers, and leaders. Topics may include demand, production and cost, forecasting, and decision-making over time. This is an intermediate-level course designed to prepare students with tools that will be used in further studies. Note: This course does not count as an elective in the Finance major. Prerequisite: ECON 100.

Behavioral Finance and Economics

Over the past several decades a significant body of research has arisen that seeks to challenge the long-standing paradigm of efficient markets. Using insights from behavioral economics and psychology, this course examines the theories and empirical evidence that offer this challenge. Prerequisites: FIN 294 (or ECON 294), ECON 350, and ECON 360.

Data Analytics for Economics and Finance

This course examines the role that data and data analytics plays in shaping the practice of economics and finance, including coverage of the role of FinTech. Using Python and its various packages, students will investigate various topics in economics and finance, such as corporate finance/governance, investments, entrepreneurial finance, regulatory compliance, etc. Programming experience is helpful but knowledge of Python is not required. Prerequisites: ECON 350.

Investment Analysis and Portfolio Management

The theories of the value of investment instruments are examined. Topics covered include the theories of capital markets and portfolio management. Emphasis is placed on modern portfolio theory. Prerequisite: ECON 350 or permission of instructor.

Portfolio Management

This course is designed to complement the material from the Investment Analysis course. The course is designed to explore institutional investment decisions in greater depth. In addition to developing course content, this course includes a practicum component focused on developing skills used by investment management firms. Students will maintain their statement of investment objectives, top-down asset allocation based on quantitative analysis of index returns, and bottom-up portfolio management using fundamental analysis. A distinctive feature of the course is the management of the 天美传媒 Investment Fund which includes a portion of the 天美传媒 endowment. Students will be accountable to the 天美传媒 Investment Committee, including tailoring recommendations for security purchases or sales to the stated objectives of the fund and completing professional-quality reports and presentations. Accordingly, this course stresses the importance of the ethical standards and codes of conduct associated with serving in a fiduciary role. Students taking the course are encouraged to take the Securities Industry Essentials exam through FINRA. Prerequisite: FIN/ECON 360.

Mergers and Acquisition Modeling and Strategy

This course covers optimal strategies and techniques associated with strategic (acquisitions) and financial buyers (buyouts). Topics include leveraged buyouts (LBO), strategic organizational and management issues, acquisition strategy, search criteria, organizational, and management issues, deal structure, and value creation. The course also provides opportunities for students to learn from industry experts through invited guest speakers/alumni. Prerequisite: FIN 270.

Topics in Financial Economics

(cross-listed with ECON 377) Broadly, this course provides extensive coverage of academic research in finance, including the works of Nobel Prize-winning economists. Drawing on theoretical and empirical research in finance, students will develop a deeper understanding of the literature that has not only shaped our understanding of finance but our world. Prerequisite: ECON 350 and FIN 294 (or ECON 294).

Financial and Macroeconomics Crises

(cross-listed with ECON 395) This course explores the economic theories and empirical evidence of financial/macroeconomic crises. The focus will be placed on the factors that cause crises. Attention is given to the effects of crises and their aftermath. Extensive use of specific cases from around the world is used. Additionally, the class will examine the regulatory environment's impact on financial crises, e.g., mitigating and exacerbating financial crises. Prerequisite: ECON 295.

ESG: Investing and Shareholder Activism

Environment, Social, and Governance (ESG) investing and shareholder activism have moved beyond the nascent stage. In fact, driven by some of the world's largest institutions, market coverage of ESG investing has grown rapidly in recent years, particularly in the United States. Using finance literature and case studies on shareholder activism and ESG investing, students will explore how to identify opportunities for value creation that seek to generate financial and social benefits, including, but not limited to environmental concerns, sustainability, corporate social responsibility, and social concerns. Prerequisite: FIN/ECON 360.

International Finance

(cross-listed with ECON 425) Deepens the understanding of macroeconomic policies from a global perspective. Outlines an analytical framework and introduces relevant tools for a multinational firm to cope with the financial uncertainty in the global market. Topics include the balance of payments, foreign exchange markets, international monetary systems, exchange rate regimes and crises, international financial instruments, and global portfolio management. Prerequisite: ECON 295.

Advanced Corporate Finance

(partially replaces ECON 393, Corporate Finance) In addition to a more rigorous coverage of topics introduced in the Foundations of Corporate Finance course, this course covers topics integral to the development of corporate leaders that are capable of effective discernment. Students will review the theory and evidence related to improving decisions within the firm. Topics may include strategy, corporate reorganizations, corporate structure, financial planning, working capital management, investment under uncertainty, and exposure to international corporate finance. Particular attention is given to the ethics of finance. More precisely, students will learn how codes of conduct, risk management practices, audit functions, corporate governance, and law writing and enforcement can improve ethics in finance. Prerequisite: FIN/ECON 293.

Time Series Analysis and Forecasting

(cross-listed as ECON 451) This course will develop the skills used in empirical financial research. Extensive focus will be placed on intuition and the application of econometric methods in time series analysis. Topics will include time-series data, stationarity, nonlinearity, conditional value at risk, forecasting methods and evaluation, volatility modeling (ARCH, GARCH), Markov switching, and asset pricing models. Statistical software will be used extensively. Students are required to complete an independent research project. Course includes extensive experiential learning component. Prerequisites: ECON 350.

Senior Seminar

Application of financial analysis in research papers to a variety of finance related topics. Emphasis on presentation and group discussion. Prerequisite: a major in finance. FIN 480 or FIN 485 is required of all senior Finance majors.

Independent Senior Thesis

Outstanding students in finance may complete an intensive independent research project in their senior year. The project culminates in a written thesis and a public presentation of their research. The thesis is directed by a faculty member in the Department of Economics and Management. Thesis proposals must be approved by the department before a student can register for FIN 485: Application Form. Prerequisite: Permission of the department. May be taken for 1 semester (1 credit) or in two consecutive semesters (1/2 credit each semester). Not open for pass/fail credit.

Advanced Topics in Finance

Topics are chosen from the finance area that extend explorations of content in existing courses or allow exploration of content not duplicated in regular course offerings. May be repeated for credit with different topics. Prerequisites: Open to students by permission of the instructor with more advanced prerequisites determined by the instructor.