Applied Economics

Technological advances of the past decades have led to the enormous growth of many world economies. The combination of private property, free markets, and profit-maximizing firms, drives this growth, which is however accompanied by environmental degradation and rising inequality, unless well functioning economic institutions are present. Students will start by studying how the capitalist revolution has led to increasing average living standards all over the world.

For most of its history human civilization was caught in the so-called Malthusian trap that prevented any significant improvement of living standards. This has suddenly changed in the 17th century when the technological advances in many countries allowed for economic growth that outpaced the population growth. Students will continue by reviewing the elementary economic principles, whilst putting emphasis on the potential causes of market inefficiency and failure, including market power, incomplete contracts, and externalities. Understanding these principles will provide them with tools for the analysis of advanced topics.

One of the advanced topics that will be studied in the course is Economic Inequality. Students will distinguish economic inequality within and across countries and study its causes. A related topic is Environmental Economics, as environmental damage typically impacts most of those who contributed to the degradation the least. Whilst environmental protection typically comes at an economic cost, innovative technologies sometimes allow for the most ecological behavior to be also the most economic behavior.