EC351 Applied Economic Models
SOUTHEAST MISSOURI STATE UNIVERSITY
Department of Economics and Finance
COURSE SYLLABUS, EC351, APPLIED ECONOMIC MODELS
New in May 1998
I. Catalog Description and Credit Hours of Course
Introduction to the process of data collection, model construction, hypothesis testing and prediction used by economists and social scientists. (3)
II. Prerequisites
MA134, College Algebra and
Any college-level statistics course
and
EC101, Economic Problems and Policies
or
EC215, Principles of Microeconomics
or
EC225, Principles of Macroeconomics
III. Purposes or Objectives of the Course
After completing the course, the student will be able to:
1. Explain the sources and process of data collection and analysis.
2. Construct and test a model.
3. Distinguish between "good" and "bad" models.
IV. Expectations of Students
The average student should plan on spending two hours outside of class for each hour spent in class. Each student is expected to participate in class discussion and complete all assignments in a timely manner. Each student will complete a project that involves data collection, model construction, estimation, and explanation of results.
V. Text
Maddala, G.S., Introduction to Econometrics, Second EditionNew York: MacMillan Press, 1992.
VI. Course Outline Hours
1. Introduction and Purpose of Course 1
a. The Research Project
b. Time Series and Crosss-Section Data Sets
c. Sources of Data
2. A Brief Review of Statistics 5
a. Measures of central tendency and dispersion
b. Distribution Functions and their statistics
i. t and z statistics
ii. F-statistic
iii. Chi-square statistic
c. Hypothesis testing
d. Causality vs. Correlation
3. Regression Analysis 21
a. Ordinary least squares-Two Variables
b. The multiple regression Model
c. Prediction and Confidence Intervals
d. Violations of the assumptions
i. Heteroscedasticity
ii. Autocorrelation
iii. Simultaneous Equation Bias
4. Data Transformations
a. Logarithmic Transformation
b. First Differencing
c. Dummy Variables
d. Lagged Variables
5. Applied Models 15
(The following are examples; actual models are to be chosedn by instructor )
a. Microeconomic Models
i. The Production Function
ii. THe Cost Function
iii. The Profit Function
iv. Systems of Demand Functions
v. Price Elasticity
vi. Income Elasticity
vii. Cross-price Elasticity
b. Macroeconomic Models
i. Growth Models
ii. Consumption Function
iii. Investment Function
iv. Demand for Money
c. Economic Models of Social Issues
i. crime
ii. immigration
iii. education
iv. retirement
v. discrimination
VII. Basis of Student Evaluation
Tests: 40%
Project: 40%
Homework 20%
