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Summer Semester

Lectures

The class is an introduction to the basic concepts in the field of industrial economics. After discussing some simple formal models, we will learn how to apply these concepts to explain empirically observed phenomena of industry development. Some aspects from behavioral, institutional and in particular Schumpeterian economics will be added to the discussion to gain a better understanding of the role of human cognition as well as political institutions in industry evolution.

The objective of the course is to introduce the main questions, theories and methods in the field of development economics, while also to critically question the conventional discourse in the discipline. After an overview of the great debates in the field, a number of classic and contemporary models, theories and strategies of economic development will be introduced. We will then focus on a number of specific topics more in detail, such as industrial policy, population growth, inequality, health and education, the environment, development aid, international trade, as well as the role of domestic and international financial markets.
The course will be based both on a number of key books representing the larger debates in the field, as well as on a discussion of cutting-edge research papers in development economics, to provide students with an understanding of the methodologies currently at use. Throughout the course, we will also look at the interaction between policies and political institutions, and examine the impact of new technologies (and here in particular digitalization) on development strategies and outcomes.

The course is an introduction to the study of experimental methods and causal inference in the social sciences, with a particular focus on institutional and development economics. The overall goal of the course is to help students conceive and design their own research project – from finding a precise research question and testable hypothesis, through the design and implementation of an experiment, to the interpretation of the data and the successful publication of the results. In the first part of the course, we will discuss the increasing popularity of experiments in economics and political science, as well as the theoretical and methodological foundations of experimental design. The second part will cover a number of different types of experiments, such as lab, field, survey and list experiments, as well as natural and quasi-natural experiments. For each type of experiment, we will discuss in detail a number of high-quality research papers as examples. The third part of the course will center on a number of typical problems often encountered when conducting experiments, in particular with respect to external validity, causality and ethical questions. Finally, students will have the possibility to conceive and present their own experimental design in class.

 

What is essential for a modern market economy to function? Building on the theoretical and empirical insights of transition economics, we study in this class how the planned economy of the Soviet Union was transformed into the market economy of contemporary Russia. Using Russia’s economic transition as an example, students will gain a practical understanding of a number of central economic concepts: what role do prices, property rights, political institutions and the legal framework play in a market economy? How do these institutions affect central outcomes of an economic system, such as economic growth, inequality, employment and innovation? And how do the modern market economies of various countries – such as Russia, Germany or the US – differ from each other?

By building on the theoretical concepts of transition economics, institutional economics and the varieties of capitalism literature, this class will provide students with an in-depth understanding of how modern market economies work, what problems they face, and why different systems produce different outcomes. Along the way, students will gain insights into the fascinating story of Russia’s economic transition, a tale populated by Communist Party officials, oligarchs, rival security services, criminal groups and fearless entrepreneurs, who all contributed to build Russia’s contemporary economic system.

According to the Economist’s Democracy Index, 92 out of 167 countries in the world can either be characterized as hybrid or as authoritarian regimes, i.e. countries where political pluralism is severely limited or nonexistent. In this class, we will study how the economic systems of these countries work, how they differ in their functioning from the economies of democratic countries, and what outcomes they produce. During the class, students will familiarize themselves with central concepts from the institutional and comparative political economy literature, for example the importance of property rights security for economic outcomes, the role of patron-client relationships, the political economy of corruption, and the role played by firms and entrepreneurs in authoritarian political systems. These concepts will be illustrated by numerous case studies from contexts such as China, North Korea, Vietnam, Russia, Belarus, Cuba, Saudi Arabia, Rwanda and Singapore. 

In parallel to providing an in-depth introduction to the topic of authoritarian economic systems, the class will also introduce students to qualitative and quantitative research methods in the fields of comparative political economy and institutional economics. The class will be taught in parallel by Ekaterina Paustyan, who has extensive experience in studying authoritarian systems by using qualitative empirical approaches, and Michael Rochlitz, who studies similar questions by using quantitative data. As a result, students will be able to compare the advantages and disadvantages of both approaches, and see what method fits best to study a given question.