Economics 3 – Rhodes University

Economics 3 consists of TWO semester courses: ECO 301 and ECO 302.

Both of these involve TWO half-credit courses from the following list:

CODE, COURSE, CREDIT , SEMESTER OFFERED

ECO 312, International Trade Theory & Policy, 0.50, 1
ECO 313, Public Finance, 0.50, 1
ECO 314, South African Economy, 0.50, 2
ECO 315, Econometrics, 0.50, 1
ECO 316, Money Banking & International Finance, 0.50, 2
ECO 317, Environmental Economics, 0.50, 2
ECO 318, Mathematical Economics, 0.50, 1
ECO 319, Any other paper approved by the Department, 0.50

Economics 3B consists of TWO half-credit courses (normally one per semester) from the list under Economics 3. Students registered for both Economics 3 and Economics 3B would take 6 courses (three per semester) in total.

Econometrics is strongly recommended for students planning to do honours. The department reserves the right to offer second and third year courses in either Semester 1 or Semester 2 and to withdraw any of the third-year courses.

ADMISSION PREREQUISITES

ECO 201,202
Prerequisite:
Economics 1 or ECO101 & ECO 102

ECO 311,312,313,314, 315, 316, 318
Prerequisite
Economics 2 or ECO 201 & ECO 202

ECO 317
Prerequisite:
ECO 101

In addition to the above admission prerequisites, students are normally only allowed to register for third-year courses after successful completion of a total of 14 semester credits.

ECO 312 – INTERNATIONAL TRADE THEORY AND POLICY
International trade theory: the classical (Ricardian) model and extensions

* Neoclassical trade theory and income distribution
* Technology theories of trade
* The Linder theory
* New trade theory based on economies of scale and imperfect competition
* Economic growth and international trade

Trade policy: the instruments of trade policy and their effects

* the arguments for protection; economic integration
* trade and development
* South Africa’s trade policy and the World Trade Organization

ECO 313 – PUBLIC FINANCE

* Economic basis for investment activity
* Public versus private goods
* Externalities
* Government intervention in the market
* Financing of government expenditures
* Effect of taxation on the economy
* The budget deficit
* Theory and structure of taxation
* Provincial expenditure and intergovernmental fiscal relations

ECO 314 – SOUTH AFRICAN ECONOMY

* South African economy in the 20th century
* Political economy of development
* Role of the state in industrialization
* Inward industrialization versus export led growth
* Changing labour relations
* Development in the financial sector
* Foreign direct investment
* Balance of payments and fiscal discipline
* Primary sector developments

ECO 315 – ECONOMETRICS

* The nature and scope of econometrics
* Basics of probability and statistics
* The linear regression model: the two-variable model, estimation and hypothesis testing
* Multiple regression estimation, goodness of fit and hypothesis testing
* Functional forms of regression models: how to measure elasticity and the growth rate, reciprocal models
* Regression on dummy explanatory variables
* Regression analysis in practice: multicollinearity and heteroscedasticity
* Autocorrelation and spurious regression in economic time series data

*Econometrics(ECO 315) is strongly recommended for students planning to do Honours.
ECO 316 – MONEY, BANKING & INTERNATIONAL FINANCE

* Money and interest rates
* The demand for money
* Interest rate behaviour
* Transmission mechanism
* Rational expectations theory (traditional, new classical and new Keynesian models)
* Financial instruments and markets
* Central banking and depository institutions
* Foreign exchange markets and the balance of payments accounts (monetary, portfolio balance, price adjustments approaches to the external balance)
* National income and current account
* The exchange rate systems and international monetary system, and macroeconomic policy in the open economy
* Contemporary issues
* Macroeconomic policy in South Africa

ECO 317 – ENVIRONMENTAL ECONOMICS

* Scope and development of environmental economics
* A model of the economy and the environment
* The economics of pollution
* Measuring economic impacts on the environment
* Resource economics
* Sustainable development
* Issues and applications

ECO 318 – MATHEMATICAL MICROECONOMICS

* Analytic and mathematical models in economics
* Linear models
* Leontief input-output analysis
* Optimisation – single and several variables with constraints
* Consumer theory
* Demand theory
* Expenditure minimisation
* Production theory
* Profit maximisation
* Equilibrium and its basic welfare properties
* Dynamical models of economic processes
* Honours level includes: constrained optimisation, integration and applications