Courses
First Term of the First Year
In the first term of the first year, doctoral students will take the following core courses:
Advanced Microeconomics
Advanced Microeconomics deepens modern duality concepts in the analysis of consumer and producer behaviour and welfare economics as well as many game theoretic concepts and links them to market analysis (incomplete competition), market design (auctions), markets under incomplete information (moral hazard, adverse selection), and elaborates on microeconomic decision theory (dynamic programming, decision under uncertainty, etc.). There are many advanced textbooks suitable for this course. Here, we mention as an example the textbook of Andreu Mas-Colell, Whinston and Green (1995 etc.): Microeconomic Theory, Oxford University Press.
Advanced Macroeconomics
Similarly, Advanced Macroeconomics deals with recent developments in macroeconomic theory including monetary and international economics and models for endogenous growth. A European perspective is explicitly taken into account, where special focus is given to the process of economic integration. Textbooks suitable for this course are e.g. Romer (2005): Advanced Macroeconomics, McGraw-Hill, Woodford (2003): Interest & Prices, Princeton University Press, Krugman and Obstfeld (2005): International Economics, Addison-Wesley, Burda and Wyplosz (2001): Macroeconomics, Oxford University Press and R. Barro and X. Sala-i-Martin (2003): Economic Growth, McGraw-Hill.
Econometric Methods
Econometric Methods starts with a review of basic regression analysis in the context of single equation linear models, and continues with stochastic regressors and simultaneous equation models. Estimation methods like generalized least squares, instrumental variables, generalized methods of moments, maximum likelihood techniques, two and three step least squares are discussed. There are many excellent textbooks in this area, e.g. Davidson and McKinnon(2004): Econometric Theory and Methods, Oxford University Press, Johnston and DiNardo (1997): Econometric methods, McGraw Hill and Woolridge (2003): Introductory Econometrics, Thomson.
Second Term of the First Year
The second term of the first year begins with either Microeconometrics or Macroeconometrics. The choice depends on what research area the student wants to specialize in. The course Research Project Management is compulsory for all students.
Microeconometrics
Microeconometrics provides an in-depth introduction to econometric models for cross section and panel data. Topics include linear and non-linear models for panel data, discrete-choice analysis, censored regression and duration models, and self-selection models. The main textbook of the course is W. H. Greene (2003), Econometric Analysis, Prentice Hall. Another textbook suitable for this course is A. C. Cameron and P. K. Trivedi (2005), Microeconometrics. Methods and Applications, Cambridge University Press.
Macroeconometrics
Macroeconometrics provides an in-depth introduction to the application of econometric techniques to macroeconomic issues. Univariate and multivariate time series techniques are considered, including structural autoregressive models, the concepts of integration and cointegration and error correction modeling. In addition, ARCH models are reviewed, as they are of special importance in the analysis of financial markets. The main textbooks for the course are Enders (2003): Applied Econometric Time Series, Wiley, Lütkepohl (2005): New introduction to multiple time series, Springer, and Johansen (2004): Likelihood-based inference in cointegrated vector autoregressive models, Oxford University Press.
Research Project Management
All students are required to take the course Research Project Management. This course is more practical and aims to convey to students all the management skills that are required to submit a research project proposal e.g. to the European Commission or research foundations. It familiariyes the participants with the internet pages of the European Union regarding research policy (http://europa.eu.int/comm/research/era/index_en.html) and Community Research & Development Information Service CORDIS (http://www.cordis.lu/en/home.html).
Participants who passed the course successfully know how decisions on research policy take place and how they are prepared. The course also covers all the skills needed to manage a project that has been accepted. This course is based on business games. To pass successfully, the examinee must “propose” one research project and “manage” it properly according to European provisions or the guidelines of other international organizations.
A Variety of Field Courses
A variety of field courses are offered to the students depending on their research interests. The Graduate Center offers field courses based on the research areas of the departments of DIW Berlin, e.g. courses in development economics, the economics of regulation (and deregulation) in different sectors (electricity, gas, telecommunication), network economics, industrial economics, energy economics and energy policy, environmental economics, climate policy, economics of waste management, empirical public economics, labor economics, social policy, household panel surveys and many others. These courses go beyond the usual textbook presentations and try to link their analysis to policy issues. They should provide students with tools applicable to clear-cut requests of policy makers.
Special courses also deal with methodological issues like microsimulation models, panel econometrics, dynamic factor models and other statistical techniques.
Here are some examples:
Computable General Equilibrium Models
Computable general equilibrium models- theory and application in the energy-environmental research area:
Computational general equilibrium Models (CGE) are primarily based on neoclassical theoretical background of equalizing supply and demand in all markets by means of market clearance prices. Profit maximization under perfect competition and free market entrance guarantee zero profits and optimal allocation and distribution of resources. The dynamics of CGE is produced by capital accumulation and/or by the exogenous growth of production factors and productivity. Recursive dynamic models determine temporary equilibria under myopic expectations, intertemporal CGEs consider capital and investment changes over time. In order to guarantee the consistency of all exogenous given parameter, CGEs are frequently benchmarked on a given base year. CGE models produce (as a response to external shocks) a general equilibrium of all markets according to economic behavior of individual agents. Mainly CGEs use non-linear substitution-based production and utility functions of the CES type to describe production and utility behavior. Energy can be considered a further input production factor; to describe technical progress, autonomous energy efficiency factors are considered. Recent model improvements include an endogenous representation of technological progress. The main shortcomings of CGE are their reliance on an assumption of perfect market equilibrium; they do not allow for structural unemployment in the long run. Recent model development take this into account by allowing imperfect markets and incomplete information. CGEs are simulation tools that assess “if-then” questions in a medium to long term time horizon and can hardly be applied for short and long term prediction tasks. The lecture furthermore illustrate CGE models in the programming language GAMS and gives some concrete examples and options for modifications of CGE models.
The course is mainly based on Ginsburgh V. and M. Keyzer (1997): “The structure of applied general equilibrium models”, MIT Press. and Shoven J.B. and J.Whalley (ed.) (1986): “General equilibrium trade policy modeling”, MIT press.
Macroeconometric Models
Macroeconometric models serve as a main tool in the areas of forecasting and policy consulting. They describe the economy by a set of behavioural equations and definitions. Sectors include households, firms and policy authorities. Due to the rising globalization of markets, multi-country models are preferred for policy consulting, where countries are modelled as similar blocks. A neoclassical steady state provides the long run solution, where output and employment are determined via a production function. Because of rigidities in the evolution of wages and prices, however, aggregate demand is important in the short run. Temporary disequilibria in the labour and goods market are proxied by gap variables, which are relevant for the wage and price reactions. Monetary policy is implemented via Taylor rules. Due to the adjustment of wages, prices and interest rates, the long run equilibrium is gradually restored. The models are employed to examine the expected effects of alternative economic policies.
Further Macroeconometric Topics
Further macroeconometric topics include paneleconometric methods for nonstationary variables, and dynamic factor models. Paneleconometric methods for nonstationary data offer a framework to analyse macroeconomic relations at the European level, treating the individual countries as the cross section. Compared to the time series setting, efficiency gains can be realized, as the analysis is based on a broader information set. Dynamic factor models are important primarily as a forecasting device. The evolution over the business cycle is seen to be driven by a small number of independent forces. They are estimated as common components, which can be extracted from a large dataset of time series.
Microsimulation Modeling
This course covers various important topics and technical issues in microsimulation modelling, as well as practical applications. Topics include microsimulation using structural models of individual behavior, modelling non-linear budget constraints and simulating responses to non-linear tax reforms, measuring welfare gains/losses, and simulating demographic change. Technical issues include measuring statistical precision and generating confidence bands of simulated responses. Some of the issues covered in the course are summarized in: J. Creedy and A. Duncan, Behavioural Microsimulation with Labour Supply Responses, Journal of Economic Surveys, Vol. 16 (1), 2002, pp. 1–39.
Doctoral students taking this course will be actively involved in the further development of a behavioral microsimulation model and its applications to fiscal and social policy issues.
Macrosociology
Students who major in sociology will take the following courses instead of advanced macro- and microeconomics. They will enroll in Macrosociology. With a quantitative comparative methodological perspective, the topics of the course include sociological theory, theories of social change, values, culture and social stratification and inequality in comparative perspective. Some of the issues covered in the course are summarized in: J.W. van Deth and E. Scarbrough (ed.), The impact of values. Oxford 1995 and Grusky, D.B. (2001): Social stratification, Boulder.
In addition, several field courses in the field of methods of comparative analysis of societies, data-management and data-analysis in panel surveys will be offered.
