Economics with Econometrics - BSc (Hons)

This module builds on the Stage 1 teaching of microeconomics to provide an intermediate course, which takes full account of the policy issues and controversies in the application and understanding of microeconomic issues. It introduces the fundamental theoretical foundations of microeconomics and provides examples of their application.

The module provides an analysis of the way in which the market system functions as a mechanism for coordinating the independent choices of individual economic agents. It addresses the behaviour and decision making of consumers and firms, and evaluates the efficiency and equity implications of competition and other market structures. The role of government in incentivising types of economic behaviour and addressing market failure is also explored.

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This module builds on the Stage 1 teaching of macroeconomics to provide an intermediate course, which takes full account of the policy issues and controversies in the world macroeconomy.

Autumn Term considers the basic methodology of macroeconomic models and examines how macroeconomic theories of aggregate demand and aggregate supply are derived. It is important to be aware that there are many theories of aggregate demand and supply and that consideration of these theories involves studying the markets on which they are based. The Autumn Term develops and extends use of the IS-LM model to derive a theory of aggregate demand in both open and closed economies. It also scrutinises the labour market to derive a theory of aggregate supply and study the relationship between inflation and unemployment.

Spring term starts with studying the long-run, that is, what determines the standard of living of countries in the long term, as opposed to short-run economic fluctuations. It then considers microeconomic fundamentals of macroeconomics to understand in-depth the determinants of consumption, investment, and labour supply decisions. These considerations and the ideas developed in the autumn term are then used to extensively examine macroeconomic demand management policies (fiscal and monetary) and their shortcomings. Finally, we consider the role of the financial system in the macroeconomy and the causes behind some financial crises. Particular focus is given to the 2008/09 global financial crisis.

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The quantitative estimation and evaluation of economic models is an essential feature of the study and application of economics. This module provides an introduction to econometric theory and the application of econometric techniques to economic models and data. This is achieved by explaining key economic and econometric issues using applications of econometrics that quantify and evaluate economic theory and which provide an empirical evaluation of economic behaviour and the assessment of economic policy.

The module provides both an analytical and practical introduction to econometric theory, equipping students with the analytical tools to carry out applied econometric work and to explore more advanced areas of econometric theory at later stages of their chosen degree programme. The practice and application of econometrics is achieved using both Microsoft Excel and specialist econometric software (e.g. Eviews &/or Stata).

The topics considered in the module include:

• Models and data; ordinary least squares (OLS), properties of OLS, simple and multiple linear regression, inference, confidence intervals, hypothesis tests, multicollinearity, heteroscedasticity, autocorrelation, dummy variables, functional form, linear restrictions, diagnostic testing and basic panel data.

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The module provides an analytical introduction to time-series econometrics and the challenges that present themselves with the analysis of time-series economic data. Traditional econometric techniques such as Ordinary Least Squares (OLS) are poorly suited to the estimation of economic models or data which exhibit non-stationary processes. This module provides an introduction to econometric methods that are suitable for stationary and non-stationary time-series analyses.

The module is both analytical and practitioner based providing students with the knowledge, understanding, application and interpretation of time-series techniques using specialist econometric software. The module equips students with the analytical tools to carry out advanced time-series econometrics work at a later stage of their degree programme.

The topics considered in the module include:

• Stationary and non-stationary data; trend- and difference-stationary processes, stationary autoregressive models, multivariate stationary models, spurious regression, cointegration, ADF tests, forecasting.

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The module helps prepare students to acquire and develop the employability and transferable skills necessary to search and successfully apply for work experience and graduate opportunities in the commercial and public sector and postgraduate study.

The curriculum builds on employability support offered at Stage 1 providing intermediate level knowledge and exercises in application writing, CVs, careers advice, interview and assessment centre techniques, numeracy and competency tests, and psychometric evaluation. The aims here are to support students in obtaining long internships across the Summer Vacation.

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This module applies economic theory and statistical methods to the understanding and critical assessment of economic policy. It focuses on the policy application of economic concepts and provides an introduction to material that may be studied in greater depth at Stage 3. A key aspect of this module is the relationship to contemporary policy issues.

The module introduces students to a variety of microeconomic policy issues. Alongside formal lectures, workshops and seminars are designed to develop academic research skills and the ability to communicate ideas both verbally and in writing. This focus provides opportunities to develop a range of highly transferable skills and to develop as autonomous learners.

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The module provides a starting point for understanding financial markets. It attempts to link models of money, banking and finance into one generic, or foundation, view and provides insight into what determines the set of equilibrium prices required to provide an appropriate level of savings in an economy to finance the expected level of expected activity. It considers how financial and economic innovations have evolved over time, and explores why and how it seems to be that when finance fails, so does the modern market economy.

Important considerations within the module include:

• How can we analyse the appearance of money in an economy?

• What is the link between money and finance?

• What explains bank runs?

• Can we explain the occurrence of financial crises?

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This module introduces students to the skills of economic reasoning and argument by exposing them to critical debates within the discipline. It is designed for students who have completed Stage 1 Economics.

The module draws on current and past controversies to give students a critical insight into theoretical and empirical differences of opinion and approach to economics in the real world. The curriculum provides an insight into the academic and professional development of the discipline, and provides opportunities to develop a range of highly transferable skills. It also lays the foundations to many of the skills required for modules taught at Stage 3.

Four controversies will be covered each drawn from a range of topics pertinent to the discipline and relevant sub-disciplines. Students must study two controversies.

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The module will introduce students to the topic of political economy using microeconomic analytical tools. In particular, the module will provide students with an overview of microeconomic theories and empirical methods that have been used to bring new insights to issues related to political economy. The module will also explore how these issues relate to themes in development, public and environmental economics. The following topics will be covered in the module.

1. Electoral rules, voting and their economic implications

2. Political Reforms and their Economic Impacts

3. Institutions and Development

4. Ethnic and Civil Conflict

5. Climate Agreements

Find out more about ECON5830

This module covers a variety of the mathematical methods and their application to economic theory. The module starts off with a review and extension of stage 1 calculus, including integration. We examine production functions, returns to scale and their relation to firm profits. The module then covers dynamic systems where students learn to solve second-order difference equations, and, in so doing, learn about complex numbers. We use this analysis to generate insights about monetary policy. Matrix algebra is explored and used to analyse multiple equation dynamic systems. We then cover more optimisation theory, using Lagrangians to solve problems with equality and inequality constraints. Building on matrix algebra, we use Hessians to examine when we have found a genuinely desired optimum. Some of the further economic ideas we analyse are efficiency wages and monopsony power in the labour market, the duality theory of cost minimisation, and consumer theory, including Roy's identity and Shephard's Lemma.

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This module applies various aspects of environmental economic theory in combination with mathematical and statistical methods to provide students with an understanding of the link between economic theory and policy application. It introduces students to fundamental key skills used by environmental economists in the application of economics to real world environmental issues.

The main focus will be on how economic theory is applied to real world environmental issues and how this can be demonstrated using EXCEL. Therefore, it continues the development of students' use of information technology within a structured environment. This module will provide students with an enhanced understanding of how economic theory can be translated into practical policy advice.

The module introduces students to a variety of environmental economic practical issues. Alongside formal lectures, computer workshops and seminars are designed to develop academic research skills and the ability to communicate ideas both verbally and in writing.

Examples of topics the module may cover include:

• Pollution control instruments – will consider taxes and permits using market simulation and potentially the development of equilibrium displacement models;

• Non-market evaluation – will consider stated and revealed preference approaches to non-market valuation, consider experimental design, survey design and delivery and data analysis using linear regression and binary choice models;

• Renewable resource management – will consider fisheries and/or forestry management as a dynamic programming problem using the EXCEL solver; and

• Non-renewable resource management – will consider oil reserve management as a dynamic programming problem using the EXCEL solver.

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This module introduces students to applied econometrics using a general-purpose statistical software package (e.g., Stata or R), which is suitable for those intending to undertake postgraduate training in economics and/or becoming professional economists.

The module assumes a basic knowledge of statistics and quantitative methods and is designed for students who have followed Stage 1 modules in mathematics and statistics and who have taken relevant Stage 2 modules in econometrics.

What distinguishes this module is the adoption of the modern learning-by-doing approach to teaching econometrics, which emphasises the application of econometrics to real world problems. The focus is on understanding the theoretical aspects that are critical in applied work and the ability to correctly interpret empirical results.

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This module presents a systematic and operational approach to the econometric modelling of economic time series, which gives an understanding of the techniques in practical, appropriate, analytical and rigorous manner. Econometric analysis is a core skill in modern economics.

The module gives an introduction to univariate time series analysis, dynamic econometric modelling and multiple time series, linking theory to empirical studies of the macroeconomy.

All topics are illustrated with a range of theoretical and applied exercises, which will be discussed in seminars and computer classes. As such, the module emphasises the development of practical skills in the use of software for empirical research, and introduces you to the research methods used by macroeconomists in academia, government departments, think tanks and financial institutions. It also helps you to prepare for the quantitative requirements of a master programme in economics.

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The module helps prepare students to acquire and develop the employability and transferable skills necessary to search and successfully apply for work experience and graduate opportunities in the commercial and public sector and postgraduate study.

The curriculum builds on knowledge and experience gained in related employability modules delivered at Stages 1 and 2, providing further guidance and more advanced practical exercises in application writing, CVs, careers advice, interview and assessment centre techniques, numeracy and competency tests, and psychometric evaluation. The aims here are to support students during their final year in applying for good graduate jobs and MSc degree programmes.

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This module is a one-term placement opportunity that allows you to teach aspects of your degree subject in a local school. Launched to coincide with Kent's 50th anniversary in 2015, it highlights the longstanding excellence of human and social science research and teaching at the University, and the important role the institution has in contributing to the local community.

If selected for this module you will spend approximately 6 hours in a Kent secondary school in the Spring term (this session excludes time to travel to and from the School, and preparation and debrief time with the teacher). Generally, you will begin by observing lessons taught by your designated teacher and possibly other teachers. Later you will act somewhat in the role of a teaching assistant by working with individual pupils or with a small group. You may take 'hotspots': brief sessions with the whole class where you explain a topic or talk about aspects of university life. Finally, you will progress to the role of "teacher" and will be expected to lead an entire lesson. Throughout the module you will be given guidance and support by a local convenor based in your academic school as well as the overall module convenor.

You will be required to keep a log of your activities and experiences at each session. You will also create resources to aid in the delivery of your subject area within the curriculum. Finally, you will devise a special final taught lesson in consultation with the teacher and with your local module convener. You must then implement and reflect on the lesson.

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This module develops your ability to solve economics problems and to analyse economic data using computational techniques. It will teach you to apply numerical optimisation methods to a range of economics and econometrics problems, develop an understanding of numerical and computational methods through their practical applications, and develop an ability to assess the strengths and weaknesses of different methods for different applications. The module builds upon the Level 4 modules Introduction to Object Orientated Programming (CO320), and Programming for Artificial Intelligence (Python programming) (CO359) and will further develop students' understanding of programming languages commonly used in economic analysis, including at least one of Python, R and/or Julia.

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This module applies economic theory and statistical methods to the understanding and critical assessment of economic policy. It focuses on the policy application of economic concepts and provides an introduction to material that may be studied in greater depth at Stage 3. A key aspect of this module is the relationship to contemporary policy issues.

The module introduces students to a variety of microeconomic policy issues. Alongside formal lectures, workshops and seminars are designed to develop academic research skills and the ability to communicate ideas both verbally and in writing. This focus provides opportunities to develop a range of highly transferable skills and to develop as autonomous learners.

Find out more about ECON5310

The module provides a starting point for understanding financial markets. It attempts to link models of money, banking and finance into one generic, or foundation, view and provides insight into what determines the set of equilibrium prices required to provide an appropriate level of savings in an economy to finance the expected level of expected activity. It considers how financial and economic innovations have evolved over time, and explores why and how it seems to be that when finance fails, so does the modern market economy.

Important considerations within the module include:

• How can we analyse the appearance of money in an economy?

• What is the link between money and finance?

• What explains bank runs?

• Can we explain the occurrence of financial crises?

Find out more about ECON5340

This module introduces students to the skills of economic reasoning and argument by exposing them to critical debates within the discipline. It is designed for students who have completed Stage 1 Economics.

The module draws on current and past controversies to give students a critical insight into theoretical and empirical differences of opinion and approach to economics in the real world. The curriculum provides an insight into the academic and professional development of the discipline, and provides opportunities to develop a range of highly transferable skills. It also lays the foundations to many of the skills required for modules taught at Stage 3.

Four controversies will be covered each drawn from a range of topics pertinent to the discipline and relevant sub-disciplines. Students must study two controversies.

Find out more about ECON5380

Development Economics is a sub-field of economics that focuses on the unique problems of poor countries. In the course we will use economic analysis to understand the structure of poor economies and the behaviour of individuals within them. The goal is to better understand why the world looks the way that it does so that one can make more informed opinions and decisions about policies meant to improve global welfare. The topics considered in the module will include:

• The development gap in the world economy and the measurement of poverty

• Characteristics of underdevelopment and structural change

• Models of the growth and development process

• The role of agriculture and surplus labour in the development process

• Industrialisation

• Dualism and vicious circles of poverty

• Trade and Development

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This dissertation is a 30 Credit module based on self-directed study, which allows students to develop a complete piece of work within the general field of economics, from an initial idea through to a final written report. Learning is largely independent and self-directed, but is supported by lectures at the beginning of the course, structured supervision from a dissertation supervisor and weekly computing sessions to help in accessing, coding, analysing and interpreting data.

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The market for labour is the crucial mechanism that determines the distribution of income, work and opportunities. Macro factors such as globalisation, (im)migration, technological change and government policy will affect and be affected by the structure of labour markets. Rather than trying to cover the entirety of this very broad subject, the aim of this course is to focus on a few areas of topical interest and importance. We will examine the issues like the following:

1 The relationship between unemployment and wages

2 The impact of immigration on the resources of the lower skilled

3 The differences in pay and opportunities between men and women

4 Government policy towards skills and education

5 Executive pay

Throughout we attempt to integrate theoretical issues, empirical evidence and questions of policy, drawing on research covering a range of OECD countries.

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The module provides an introduction to game theory and its use by economists as a professional tool for understanding and analysing economic decision making under uncertainty. The module introduces students to topical and important research areas of microeconomic analysis, and develops their skills in setting up and solving games that arise in business and economics.

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The module introduces students to the field of Industrial Economics and studies why and how firms and industries behave and interact with each other. Understanding firms' behaviour is relevant not only to the firms but also to the governments that design industrial policies in order to favour consumers without decreasing firms' efficiency.

The module is designed for students who have taken intermediate microeconomics and addresses issues that are present in everyday news: anti-competitive practices, the effect of market power on consumer welfare, incentives for product innovation, and the private and public effects of mergers.

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The module introduces students to the theoretical underpinnings that constitute international finance and the nature and extent of monetary and financial relations between countries.

The module introduces basic concepts of international macroeconomics such as the balance of payments and exchange rates, and arbitrage conditions. It then proceeds to analyse the impact of opening up the economy on the alternative macroeconomic policies available. The main factors that determine exchange rates between currencies, and the power of different models are also considered. Finally, the module explores 'hot topics' in international finance including the benefits and drawbacks of fixed and floating exchange rates, the concept of a speculative attack, current account imbalances from an inter-temporal perspective, and how world macroeconomic imbalances drove the 2008/09 international financial crisis and recent sovereign debt crisis in Europe.

The module has both a theoretical and an applied emphasis in order to apply available theories into the real problems of the world economy. It does not analyse the detailed workings of international financial markets or questions related to firm financial management in international capital markets but students interested in these aspects can acquire basic foundations that are fundamental in understanding the context in which firms and governments work.

The topics covered in the module include:

• Open economy macroeconomics and policy.

• Exchange rates determination theory and empirics.

• Microfounded models of the current account.

• International financial flows.

• International indebtedness.

• International financial crises

• International monetary arrangements.

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This module provides students with an in-depth understanding of current issues and theoretical debates in international trade, together with their policy implications. It also provides the knowledge and skills necessary for interpreting related studies of countries at different levels of development.

International trade is a key issue on the world agenda and has considerable effects on countries' economies. The effects occur at the micro level of firms and households as well as at the macro level, where they are the subjects of government policy debates. International Trade takes advantage of the tools of economic analysis, which are common to other areas in economics, to study the issues raised by the economic interaction between sovereign states.

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This module introduces students to monetary and macroeconomic issues from a theoretical perspective. The following topics are considered:

• Structural macro and monetary modelling

• Reduced form macro and monetary modelling

• Short-run analysis of the aggregate economy

• Long-run analysis of the aggregate economy

• Policy interventions.

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The module focuses on the role of the government in the economy. It uses the tools of microeconomics and empirical analysis to study the impact of government policies on individual behaviour and the distribution of resources in the economy. The module explores the economic arguments for and against government intervention in the economy, also introducing insights from behavioural economics into the analysis and design of public policies.

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This module provides an overview of the main instruments in financial markets, the motivation for trade in these assets and the pricing of these assets. Specifically, we show how the economics of uncertainty motivates trade in a wide range of financial assets. This helps us determine how the risk and maturity of different assets affects the demand for those assets.

First, the module introduces the key principles of asset pricing: discounting, diversification, arbitrage and hedging. Second, the module introduces and motivates the use of debt, equity and derivative instruments in financial markets. Third, the module applies the key principles of asset pricing to help understand the behaviour of prices across these asset classes. While different classes of assets expose their holders to different types of risks, the key principles of asset pricing are common to all asset classes. This concept is formalised by the Fundamental Theorem of Asset Pricing.

While focusing on financial applications, the module does speak more widely to methodological challenges encountered when testing economic theories against data. These challenges are particularly relevant in financial economics. While the literature has developed a range of innovative techniques to more effectively test competing theories against the data, the answers to a number of key questions remain contested.

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The module develops skills in asset pricing and an understanding of the theoretical basis of the theory behind it. The module requires knowledge of some mathematical techniques but stresses practical training in asset pricing with a focus on the intuitions and heuristics behind theorems and formulae, rather than their rigorous derivations and semantic definitions

There are three key topics; (i) investors' optimisation, (ii) discrete time models and (iii) option Greeks and option strategies. For (i), the module first introduces the basic financial economics, and, based on it, we establish the basis of the risk-neutral probability. For (ii), the module discusses how to construct the tree model based on the historical price data, and shows that the model can be used to find the fair prices of a wide range of financial derivatives. For (iii), the module investigates the Black-Scholes-Merton (BSM) formula, and then how to use it to find the optimal hedge ratio for delta hedging. In this respect, the module also discusses how to use the return correlations to find the optimal hedge ratio.

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The module provides an alternative to students carrying out an economics research project in the dissertation module. Some students lack the necessary analytical, quantitative and research skills necessary for a piece of original research. This module will give such students the opportunity to investigate an area of economics in depth by critically reviewing the literature on a chosen subject.

Students will be given a set of questions with readings. They can also construct their own question so long as it is approved. Each student would write a different essay. Examples of questions are: what evidence exists on the success(es) of micro lending schemes? Can active labour market policies reduce long term unemployment? Can economists explain voting behaviour? Students are taught about what is required for an extended critical review of the literature and advised about what should be contained in an essay on their topic. They are also advised about how to present a poster session.

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This module covers a variety of growth issues from both empirical and theoretical views. The first part of the course deals with basic concepts of economic growth, including how to measure growth and the core theories of economic growth. The second part deals with productivity; how to measure productivity and analyse different sources of productivity growth. The third part deals with economic fundamentals, including the relationship between government policies, income inequality, and growth.

The aim of the module is to teach the basic principles of economic growth in order to answer such questions as:

• what are the determinants of growth?

• how can we improve productivity?

• what kind of role does the government play on growth?

• why are there differences in the level of income among countries?

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The module will introduce students to the topic of political economy using microeconomic analytical tools. In particular, the module will provide students with an overview of microeconomic theories and empirical methods that have been used to bring new insights to issues related to political economy. The module will also explore how these issues relate to themes in development, public and environmental economics. The following topics will be covered in the module.

1. Electoral rules, voting and their economic implications

2. Political Reforms and their Economic Impacts

3. Institutions and Development

4. Ethnic and Civil Conflict

5. Climate Agreements

Find out more about ECON5830

This module covers a variety of the mathematical methods and their application to economic theory. The module starts off with a review and extension of stage 1 calculus, including integration. We examine production functions, returns to scale and their relation to firm profits. The module then covers dynamic systems where students learn to solve second-order difference equations, and, in so doing, learn about complex numbers. We use this analysis to generate insights about monetary policy. Matrix algebra is explored and used to analyse multiple equation dynamic systems. We then cover more optimisation theory, using Lagrangians to solve problems with equality and inequality constraints. Building on matrix algebra, we use Hessians to examine when we have found a genuinely desired optimum. Some of the further economic ideas we analyse are efficiency wages and monopsony power in the labour market, the duality theory of cost minimisation, and consumer theory, including Roy's identity and Shephard's Lemma.

Find out more about ECON5850

The aim of the module is to introduce the students to the evolution of the financial crises from a historical perspective. Since financial crises are infrequent (though often occurring) events, a long-run perspective is necessary to understand their causes and consequences. This module will look at financial crises from the Tulip mania in 1636 to the financial crisis of 2008, and combine theoretical approaches to understanding financial crises with critical discussion of historical episodes.

The module will cover the following topics:

1. Financial crises in historical perspective: long-run facts

2. Theories of financial crises

3. The severity of financial crises in historical perspective

4. Financial crises in the 17th and 18th Centuries

5. Early 19th century financial crises

6. The 1890s

7. The banking panic of 1907 and the emergence of Fed

8. The Great Depression I – Florida housing bubble, FED and 1931 banking crises

9. The Great Depression II – US banking crisis

10. The Great Depression III – Germany, Eastern European crisis, sterling crisis

11. Financial crises in the 1990s

12. The Great Recessions – housing bubble, contagion, banking crisis.

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This module applies various aspects of environmental economic theory in combination with mathematical and statistical methods to provide students with an understanding of the link between economic theory and policy application. It introduces students to fundamental key skills used by environmental economists in the application of economics to real world environmental issues.

The main focus will be on how economic theory is applied to real world environmental issues and how this can be demonstrated using EXCEL. Therefore, it continues the development of students' use of information technology within a structured environment. This module will provide students with an enhanced understanding of how economic theory can be translated into practical policy advice.

The module introduces students to a variety of environmental economic practical issues. Alongside formal lectures, computer workshops and seminars are designed to develop academic research skills and the ability to communicate ideas both verbally and in writing.

Examples of topics the module may cover include:

• Pollution control instruments – will consider taxes and permits using market simulation and potentially the development of equilibrium displacement models;

• Non-market evaluation – will consider stated and revealed preference approaches to non-market valuation, consider experimental design, survey design and delivery and data analysis using linear regression and binary choice models;

• Renewable resource management – will consider fisheries and/or forestry management as a dynamic programming problem using the EXCEL solver; and

• Non-renewable resource management – will consider oil reserve management as a dynamic programming problem using the EXCEL solver.

Find out more about ECON6310