Microeconomic Theory and Public Policy

Calendar

SES #	TOPICS	KEY DATES
Part I. Themes: Theory Causal Tests, Evidence, and a First Application
1	Minimum wages and employment: Theory says?
2	Testing theory: The fundamental problem of causal evidence The method of Differences in Differences
3	Minimum wages and employment: Evidence
Part II. The Foundation of Everything: Consumer Preference, Choice, Optimization, and Demand
4	Introducing consumer theory: The foundation of microeconomics
5	Consumer sovereignty: The Carte Blanche principle	Pset 1 due day after Session 5
6	From preferences to demand curves
7	Income effects, substitution effects, and the design of anti-poverty programs
8	Income, substitution, and subsistence	Pset 2 due
9	Exam 1
Part III. From Consumer Demand to Market Demand
10	Applied competitive analysis: The U.S. sugar program
11	Applied competitive analysis: The market for real estate brokers
Part IV. Putting Markets Together: General Equilibrium, Exchange, and International Trade
12	Putting markets together: The Edgeworth box
13	The gains from market integration: “The Digital Provide”	Pset 3 due day after Session 13
14	International trade and comparative advantage
15	Does trade raise national income? The method of Instrumental Variables
16	The free trade dilemma
Part V. Markets Are Not Perfect: Externalities
17	Externalities: Definition, consequences, and remedies Guest lecture: Colin Gray or Christina Patterson, Graduate students at MIT’s Department of Economics
18	Internalizing externalities: Barbed wire fencing	Pset 4 due day after Session 18
19	Prediction is difficult, especially about the future: Choice under uncertainty.
20	Exam 2
Part VI. Choice Under Uncertainty: Risk Preference, the Value of Safety, and the Market for Risk
21	Risk preference, the value of time, and the value of statistical life
22	There’s a market for risk? How insurance works
23	Moral hazard in the housing market: Subprime lending The Regression Discontinuity method
Part VII. Markets are Not Perfect: TMI or NEMI?
24	Imperfect information: Signaling in markets	Pset 5 due day after Session 24
25	Why do educated people earn more? Signaling vs. human capital
26	Mandating a pooling equilibrium: “Ban the Box” legislation	Pset 6 due day after Session 26
27	Adverse selection and the Lemons Problem
28	Health insurance in practice: Why it works, why it matters
	Exam 3 (during exam period)