Syllabus 2012 Spring Semester

IPEM, Graduate School of Economics and Management, Tohoku University

Table of Contents
Course
Microeconomics II Macroeconomics II Econometrics II Applied Macroeconomics Japanese Economic History Corporate Finance Regional Enterprise Career Development

Instructor
Ryo KAWASAKI Koki OIKAWA Yoshihiko TSUKUDA Ryo HORII Hiroshi HASEBE Yoshio KANAZAKI Michi FUKUSHIMA Kazuko SUEMATSU

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Microeconomics II
Spring 2 Ryo Kawasaki rkawasaki@econ.tohoku.ac.jp By appointment Tuesdays 14:40-16:10 Seminar Room 24 The result is founded on

Course Objectives and Outline One of the themes of Microeconomics I was that markets work well. several assumptions some of which do not hold in practice. Learning Goal The goal of the course is to be able to understand the theoretical aspects of auction theory, which then can be used for further study of other markets. Course Content See the course schedule below for details. Tentative Course Schedule (approximately 1-2 lectures on each topic) 1) Mathematical review: concavity 2) Strategic form games and Nash equilibrium 3) Extensive form games, strategies, and subgame-perfect equilibrium 4) Basic model of auctions under complete information 5) Decision under uncertainty 6) Bayesian games and Bayesian-Nash equilibrium 7) Types of auctions 8) Revenue equivalence theorem 9) Supermodularity and monotone comparative statics Assessment Criteria Homework: 36%, Exam: 64% (The actual percentage may be subject to change depending on the number of assignments.) is due by the beginning of the next lecture. Textbook and Reading List There is no designated textbook for the class. References (in order of relevance) (optional reading): Homework will be given each week and This course takes a deeper look

into markets and allocation of goods through a theoretical analysis of auctions.

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1. Jehle, G. and P. Reny. Advanced Microeconomics. Addison Wesley, Second Edition, 2001. 2. Milgrom, P. Putting Auction Theory to Work. 2004. 3. McAfee, P. and J. McMillan. Auctions and Bidding, Journal of Economic Cambridge University Press,

Literature 25, 699-738, 1987.

4. Sydsaester, K. and P. Hammond. Essential Mathematics for Economic Analysis. Prentice Hall, Third Edition, 2008. Note (Requirements) Knowledge of topics covered in Microeconomics I is highly recommended for taking this course, although a successful completion of Microeconomics I is not required for registration for this course. Schedule may be subject to change.

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Macroeconomics II
Spring 2 Koki Oikawa k.oikawa@econ.tohoku.ac.jp to be announced Tuesday, 8:50-10:20 Seminar Room 24

Course Objectives and Outline This course is the second half of the Macroeconomics course work in IPEM. Using the framework established in Macroeconomics I, students will learn the knowledge and skills necessary for the modern macroeconomic analyses. Topics covered in this semester are

listed in "Course Schedule" below.

Learning Goal I hope you will grasp the dynamic general equilibrium (DGE) approach --- how it is formulated, how it works, and what it implies. Because the DGE approach is standard in the current macroeconomic analysis, this forms the basis for your further study of macroeconomics. Course Content Each class consists of exercise and lecture. At the beginning of every class, I will give you a short test related to the previous lecture for quick review. So don't be late for class. Also, I will give you problem sets, most probably two times during the semester. Course Schedule 1) Optimal Growth Theory: Decentralized Economy 2) Overlapping Generations Model 3) Real Business Cycles 4) Endogenous Growth Theory Assessment Criteria

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You have to take an exam at the end of the semester. This final exam amounts to 50% of the final evaluation. And 30% is the problem sets, and the last 20% is the short tests.
Textbook and Reading List David Romer, Advanced Macroeconomics, McGraw-Hill/Irwin. Note (Requirements) Only students who have taken or at least attended Macroeconomics I in the previous semester can take this course. I won't repeat explanation on the stuff studied in the previous semester.

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Class Title Semester Credit Instructor E-mail Time Place Econometrics

Econometrics II
Spring 2 Yoshihiko Tsukuda, Professor tsukuda@econ.tohoku.ac.jp Friday 8:50 10:20 Seminar Room 1 is a continuation of Econometrics .

Course Objectives and Outline Econometrics together with microeconomics and macroeconomics constitute indispensable part for all economics major students. Students in many fields that require data analysis, including development economics, finance, international economics, labor economics, macroeconomics, and public finance will find this course useful when they write a thesis. The emphasis in this class is on applying econometrics to real world problems. The focus is on understanding and interpreting the assumptions in light of actual empirical applications. The mathematics for college algebra and basic probability and statistics are required. Computer skill is indispensable to carry out data analysis. Supplementary class will be offered to teach how to run the statistical software of EVIEWS by a teaching assistant. Learning Goal Econometric methods are relevant in virtually every blanch of applied economics. They come into play either when we have an economic theory to test or when we have a relationship in mind that has some importance for business decisions or policy analysis. An empirical analysis uses data to test a theory or to estimate a relationship. The goal of the course is for students to understand what econometrics is and to acquire appropriate skills to empirical economic analysis. Course Content This class of Econometrics covers the materials of chapters 5 through 8, chapters 10 and 11, in Wooldridge's text book, "Introductory Econometrics: A Modern Approach". The text book consists of three parts: Part 1 (Regression analysis with cross-sectional data), Part 2 (Regression analysis with time series data), Part 3 (Advanced topics). Although the book is designed for undergraduate economics majors, I believe it is also well suited for a master's level course. Students are expected to do home works in order to fully grasp the materials of each chapter. Course Schedule

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1) April 13 Brief review of regression analysis taught in Econometrics . 2) and 3) April 20 and 27 Chapter 4: Multiple regression analysis: Inference This chapter turns to the problem of testing hypotheses about the parameters in the population model. We begin by finding the distribution of the Ordinary Least Squares (OLS) estimators under the normality assumption of the population errors, and then discuss hypothesis testing about individual parameters. 4) and 5) May 11 and 18 Chapter 5: Multiple regression analysis: OLS asymptotics In chapters 3 and 4, we covered the finite sample properties of the OLS estimators in the multiple regression model. In addition, it is also important to know the asymptotic properties (large sample properties) of the estimators and test statistics. 6) and 7) May 25 and June 1 Chapter 6: Multiple regression analysis: Further issues This chapter brings several issues in multiple regression analysis that we could not conveniently cover in earlier chapters, but are important for applying multiple regression to a broad range of empirical problems. These include data scaling, choice of functional form, and selection of regressors. 8) and 9) June 8 and 15 Chapter 7: Multiple regression analysis with qualitative information: Binary ( or dummy) variables In previous chapters, the dependent and independent variables in multiple regression models have had quantitative meaning. In empirical work, we must also incorporate qualitative factors into regression models such factors as gender or race of individual, the industry of a firm, and the region of the United States. 10) , 11) and 12) June 22, 29 and July 6 Chapter 8: Heteroskedasticity Homoskedasticity assumption, introduced in Chapter 3 for multiple regression, states that the variance of unobservable error is constant. This assumption fails whenever the variance of error changes across different segment of population. This chapter deals with the consequences of heteroskedasticity for the OLS estimation, and discusses testing problems for heteroskedasticity 13) and 14) July 13 and 20

Chapter 10: Basic Regression Analysis with Time Series Data This chapter studies the properties of OLS for estimating linear regression models using

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time series data. Although the classical linear model assumptions for time series regression case have features in common with those for the cross-sectional case, they also have some significant differences that we will need to highlight.
Assessment Criteria Home works (40%), mid-term exam (30%), final exam (30%) Textbook and Reading List Wooldridge, Jeffrey M., "Introductory Econometrics: A Modern Approach" Class materials will be handed out at the first day of the class. Note (Requirements) Attendance is indispensable to understand the course materials.

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Applied Macroeconomics
Spring 2 Ryo HORII, Associate Professor horii [[atmark]] econ . jpn . org (replace [[atmark]] with @ and remove any space). Upon appointment by e-mail Mondays, 13:00-14:30 Seminar Room 8

Course Objectives and Outline In Japan and many East Asian countries, the fall in the fertility rate and the expected fall in population pose one of the largest threats on the sustainable growth of the economy in the macro level. Interestingly, the average number of children born to a married couple has not fallen significantly in Japan. The recent fall in the total fertility rate is driven by the postponement of marriage and also by the rise in the number of people who do not marry in their lifetime. Why do people decide to or not to marry and how these decisions determine the pattern of matching between men and women? the macro level. Learning Goal To learn the process of family formation not in terms of sociology or biology, but in terms of the formal models of economics. To understand the economic incentives behind marriage, childbearing and education. To become familiar with the search-matching framework for modeling decentralized markets (such as labor markets) To become able to analyze the effects of economic circumstances (e.g., wage gaps) and economic policy (e.g., taxation) on the equilibrium of the marriage market and also on the fertility. Course Content Lectures will be given according to the following list. At later dates during the course, students (either individually or as groups) are requested to do presentations on some portion of the course materials. Using the search and matching theories, this course studies the determinant of peoples decision to marry and also its equilibrium outcome in

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Course Schedule The followings are the topics planned to be covered in the course. Note that the list is tentative and subject to change. The detailed schedule of the course is to be announced during the lecture. 1. 2. Course orientation (on April 9th) Some facts on marriage among developed countries * Marital status, histories, and transition * Relationship between marriage and work/wage. * Assortative matching * Relationship between marital status and child 3. A microeconomic model of the gains from marriage 1: * Sharing public goods within a household * Specialization by spouses * Risk sharing by household members when credit market is imperfect 4. 5. A microeconomic model of the gains from marriage 2: * Childbearing as a joint production Matching on marriage market 1: * Stable matching without transfers * Stable matching with transferable utilities 6. Matching on marriage market 2: * The general framework of the search model * Search and assortative matching *Bargaining in marriage 7. Sharing the gain from marriage 1: * Determination of shares with a finite number of agents * Continuous case 8. Sharing the gain from marriage 2: * Matching with general utilities * Matching by categories 9. Investment in schooling and the marriage market 1: * The basic model of pre-marital investment * Marriage market, investment decisions, and equilibrium 10. Investment in schooling and the marriage market 2: * Gender differences in the incentive to invest * Impacts of the wage gap, household roles

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* Division of labor and career choices 11. Equilibrium model of marriage, fertility and divorce 1: * The setup of the general model * Individual choices, aggregation and the equilibrium 12. Equilibrium model of marriage, fertility and divorce 2: * An example of multiple equilibria * The effects of income uncertainty and ex-post heterogeneity 13. Children and Family Structure 1: * Modeling children as public goods for household members * The legal framework when divorce happens * The allocation of household resources 14. Children and Family Structure 2: * Derivation of equilibrium * Welfare considerations 15. Summing up Assessment Criteria The participants of the course are assessed according to their contribution to the course, which includes (but not limited to): presentations on specified materials, participation in discussion, and attendance to the class. Textbook and Reading List Martin Browning, Pierre-Andre Chiappori, and Yoram Weiss Family Economics, yet to be published, draft version (under the name of family book 2011) downloadable from the authors website at http://www.tau.ac.il/~weiss/fam_econ/ Note (Requirements) Knowledge of intermediate level macroeconomic and microeconomics (e.g,, Macroeconomics I,II and Microeconomics I, II at IPEM) is expected.

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Japanese Economic History

Spring 2 Hiroshi HASEBE Professor hhasebe@econ.tohoku.ac.jp Wednesday, 18:00-19:00 Tuesday, 19:40-21:10 Seminar Room, 3

Course Objectives and Outline

The purpose of this class is for the students to have the historical framework of the Japanese economic society in the meaning of its socio-economical culture, system and dynamism. The first object of this course is to provide the basic knowledge on the feature and structure of the pre-modern economic society in Japan, so called Tokugawa Japan, with the historiographical intelligence. The second object is to provide the essential historical points on the modernization and industrialization process of Japanese economic society based on the historical researches.
Learning Goal

Students will become to understand the essential outline of the modernization process in Japan and will be able to narrate the history of Japanese economy from the socio-economical view point.
Course Content This is a historical research course in which topics are basically presented in the style of lecture using power point. Topics are as course schedule. Course Schedule 1) April 10 Course Orientation; about the change of view point in the economic history research 2) April 17 Lecture 1; the ordinary people in the 19th century Japan 3) 4) April 24 Lecture 2; the Meiji Restoration in 1868 May 1 Lecture 3; what was the modernization of Japan?

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5) 6)

May 8 Lecture 4; what was the Tokugawa Regime? May 15 Lecture 5; the rural society and rural communities

7) May 22 Lecture 6; rising market economy, trading and transaction in the Tokugawa Japan 8) May 29 Lecture 7; early modern City that was called Jyo-ka 9) June 5 Lecture 8; what was the modernity?. 10) June 12 Lecture 9; the Chiso Kaisei, Meiji government budget and the renewal of land tax system 11) June 19 Lecture 10; establishment of the modern financial system and banking system in Japan 12) June 26 Lecture 11; the Syokusan-Kogyo as making industry policy 13) July 3 Lecture 12; first economic growth and industrialization process in Japan 14) July 10 Lecture 13; wars and national budget problem 15) July 17 Lecture 14; entrance as the youngest empire state on the world stage of imperialism Assessment Criteria Students will be evaluated based on participation (20%), mid-term exam (30%), and the final report (50%). Textbook and Reading List Reading list and documents will be provided in the class. Note (Requirements) High attendance is required to keep the momentum and progress of the projects. .

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Corporate Finance
Spring 2 Yoshio KANAZAKI, Professor kanazaki@econ.tohoku.ac.jp By appointment Thursday 10:30-12:00 Seminar Room 3

Course Objectives and Outline The purpose of this course is to provide students with the theory and knowledge of corporate finance. Corporate finance is a study regarding how corporations make financial decisions. Financial decisions are divided into two types. One for investing in real assets and other for raising money. Before learning what financial decisions are good, we have to study how investors invest in stocks and bonds issued by corporations and how expected returns on stocks and bonds are determined in the financial markets reflecting risks of securities.

Learning Goal Grasping the fundamentals of following contents. The concept of risks involved with security investments, why diversification can reduce portfolio risks, what determine the expected returns on securities, rational rules for real assets investments made by firms, how much corporations should borrow money, and how much corporations should pay dividends to shareholders.

Course Content The course proceeds along the contents of the textbook.

Course Schedule 1) Introduction: goals and governance of the firm 2) Present value 3) Valuing bonds

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4) The value of stocks 5) Investment criteria 6) Portfolio theory and the capital asset pricing model 7) Debt policy 8) Payout policy Assessment Criteria Attendance (30%), final exam (70%) Textbook and Reading List Brealey, Myers, and Allen,

Principles

of

Corporate

Finance

10/E,

McGraw-Hill/Irwin, 2011. Note (Requirements) Basics of statistics

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Class Title Semester Credits Instructor E-mail Office Hour Time Place

Regional Enterprise
Spring 2 Michi FUKUSHIMA michi@econ.tohoku.ac.jp anytime (appointment needed in advance) Friday 18:00-19:30 Seminar Room 24

Course Objectives and Outline The purpose of the course is for students to understand the situations and features of Japanese businesses, especially SMEs and Regional Enterprises (REs). We also introduce basic business principles and concepts, including specific examples. Learning Goal The students are required as follows; (1)to understand the situations of REs and SMEs in Japan, (2)to learn theories explaining the phenomena, (3)to compare between the SMEs and REs in Japan and their own countries, (4)to think how to apply what they have learned to their own countries SMEs and REs. Course Content One topic is picked up in each class. The students learn and think the topic through listening lecture, case study and group discussion. A class will consist of three parts: (1) lecture on the topic (theories or concepts), (2) case study, (3) group discussion. Course Schedule 1) April 13 Orientation: What is the purpose of this course? 2)April 20 Enterprises and region: How are regional factors and enterprises activities related? 3)April 27 Time-honored companies and business transformation in Japan: Why are there many time-honored companies in Japan? How have they survived? 4) May 11 Resource creation by RE: How does exhausted countryside revive their economy? Self-introduction. *The schedule is subject to change.

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5) May 18 Knowledge creation by RE: How do Japanese companies make innovation happen? 6) May 25 Spontaneously emerging clusters in Japan: What is the secret of innovative region in Japan? 7) June 1 Japanese cluster policies and their results: What is the role of government in making innovation happen? 8) June 8 Collaboration among industry, academia and government in Japan: What are the roles of academia and regional entities in making innovation happen and how do they collaborate? 9)June 15 Ventures and RE: Why are there so few venture created in Japan? 10)July 29

Internationalization of RE: How do REs get to be global companies?

11)July 6 Revitalizing the primary industry: Can Japanese the primary industry survive in international competition and how? 12) July 13 Restoring from the East Japan great earthquake: How have the companies that suffered from 3.11 Tsunami revived? 13) July 20 Final Examination Assessment Criteria Students will be evaluated based on: (1) class attendance, (2) in-class participation, (3) group discussion participation and presentations, (4) reports, and (5) the final exam. Textbook and Reading List Materials are prepared by the instructor. For further study, the books as follows are useful;
Ibada-Arens,K(2005) Innovation and Entrepreneurship in Japan, CAMBRIDGE Whittaker, D.H. (1997) Small firms in the Japanese economy, CAMBRIEGE.

Note(Requirements) Absent without notice is never allowed.

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Class Title Semester Credit Instructor E-mail Office Hour Time Place

Career Development
Fall 2 Kazuko Suematsu, Associate Professor suematsu@econ.tohoku.ac.jp Tuesday, 14:30~16:00 Tuesday, 13:00-14:30 Seminar Room 1

Course Objectives and Outline This course provides students with opportunities to explore different career choices and life styles, identify their values and goals, and learn basic knowledge and skills necessary to seek employment at Japanese or multi-national companies. Presented with a conceptual framework of leadership and career development, students will gain insight into diverse career choices through readings and class discussions. Simultaneously, they will learn practical skills such as business manners, resume-writing, discussion, and presentation. Learning Goal Students will be equipped with knowledge and skills to utilize for obtaining information about career as well as life-style choices. Students will explore their career/personal attributes and future marketability. Students will learn various career as well as communication skills related to a job search in Japan and other countries. Course Content The class will be interactive and experience-based. Students are expected to be autonomic, self-motivated, and active learners/participants in class. Reading, discussion, and task-based assignments are designed to raise students awareness for future career and their marketability. The assignments are done both individually and in groups, depending on the themes. Course Schedule 1) Introduction: The instructor will clarify the expectations and goals of the course. What is career and how much do you know about it? The class will explore career development theories, the pyramid through exercises. A guidance about company profile research.

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2) Effective Presentation: Speech and visual delivery Oral and written communication 3) Career choices: learn from role-models. What is it like to pursue career in the international society and how can you prepare for that? 4) Company profile presentation Self-discovery/evaluationhow much do know about yourself such as traits and skills Identify your strengths and weaknesses and learn how to present your competitiveness. 5) Company profile presentation 30 seconds commercial presentation Create a life-planner: identify your goals and skills you need to attain the goals Occupations: Career Interest Inventory 6) Company profile presentation The best career choices: life-planner presentation & feedback Individual/group assignments: job-hunting process/strategy in my country 7) Company profile presentation Job-hunting presentation Resume-writingeffective and attractive presentation in writing 8) Career choices: learn from role-models. Career-building in Japanese companies in and outside Japan. How do you work effectively with Japanese colleagues and what do they expect from you? 9) Company profile presentation Interviewshow can you survive the interviews? 10) Company profile presentation Job-hunting strategies in Japan: unique process, collecting information, making pre-entry 11) Company profile presentation Job-hunting strategies in Japan: attending company seminars, making an entry Business manners, appearance and manners 12) Company profile presentation Job-hunting strategies in Japan: interviews 13) Company profile presentation Interviewspractice and feedback 14) Final Presentation

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15)

Final Presentation

Assessment Criteria Students will be evaluated based on: class attendance, assignments, presentations, and in-class participation Textbook and Reading List To be announced in class Note (Requirements)

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