College: College of Letters and Science
Designation: Department
Major: Economics
Degrees Offered: M.A., M.S., Ph.D.
Other: Ph.D. Minor
Tracks: Econometrics, industrial organization, international economics, labor economics, macroeconomics and monetary economics, microeconomic theory, or public economics
Faculty: Professors West (Chair), Andreoni, Brock, Che, Deneckere, Durlauf, Engel, Hansen, Kennan, Manuelli, Nichols, Samuelson, Sandholm, Scholz, Staiger, Walker, Wolfe; Associate Professors Porter, Seshadri; Assistant Professors Brown, Carranza, Hertel, Kristensen, Lentz, Mazzocco, Navarro, Quesada, Shin; Affiliate Professors Chinn, Montgomery, Ortalo-Magne, Wallace
The graduate program in economics offers a firm grounding in the theory and tools of economics as well as in a variety of fields of specialization. Facilities within the department include faculty and student offices, a library of core materials, and a computer center. The size of the department, the breadth of specialties represented among the faculty, the abundance of research workshops and research facilities, and the related programs of other university departments combine to provide an unusually supportive atmosphere for study and research. Students are encouraged to work together. Study groups for course work and preliminary examinations are standard. The department currently has more than 30 faculty members and more than 130 graduate students. All students are assigned desk space. The department and students sponsor social events throughout the year. A graduate advisor is on staff to help students with problems and questions. Each student is also assigned a faculty advisor.
The primary focus of the Department of Economics is on the doctoral degree. Although a master's degree is offered officially, students are not admitted for a terminal master's degree.
The first year of study concentrates on economic theory and statistics courses. In addition, the department holds seminars for first-year students which feature the different fields in economics. The seminars provide first-year students the opportunity to meet the faculty and learn about research in each field. The department offers seven fields of concentration.
The scope of econometrics at Wisconsin is suggested by a list of recent research projects by the econometrics faculty (often with the assistance of graduate students). These include the generalized method of moments, nonparametric likelihood, bootstrap methods, interactions-based models, macroeconometrics, nonlinear time series, and semiparametric estimation. In addition, studies conducted by other faculty members and students--in public economics, labor, industrial organization, macroeconomics, trade, and microeconomics--often draw on appropriately sophisticated econometric techniques. The econometrics program is augmented by course offerings in the statistics department, traditionally strong in time series analysis and stochastic processes.
The two required courses focus on recent developments in theoretical and empirical industrial organization. Modern theoretical industrial organization studies the theory of the firm and contracting, static and dynamic models of oligopoly, the theory of price discrimination, the determinants of entry and exit behavior, models of product differentiation and advertising, and dynamic competition through R&D and the adoption of new technologies. The focus of modern empirical industrial organization has mostly shifted from discovering robust empirical regularities that hold across a broad cross section of industries to the detailed study of individual industries backed by a theoretical framework. This reflects the belief that industries have important idiosyncrasies, and that empirical regularities can be understood only in the context of a well-specified theoretical model. The range of topics studied includes the determinants of price-cost margins and numbers of entrants, the formation and enforcement of collusive arrangements, the dynamics of entry and exit, and the testing of auction theory and models in information economics. The workshop draws participation from internal faculty members as well as invited speakers from other universities. Topics that have been recently discussed in the workshop include studies of discrete choice models and hedonics, auction theory and empirics, asymmetric information, vertical integration and franchising.
Economics 873 covers advanced topics and treatments. For the most recent syllabus, see www.ssc.wisc.edu/~rstaiger/SYLspring04.873.pdf .
The monetary side of international economics includes the theory of open-economy macroeconomics and the theory of international financial markets. The latter receives less attention here, and more in the finance department of the business school. Open-economy macroeconomic theory devotes attention to exchange rate determination, balance of payments, and real and financial interaction among open economies. It treats traditional and current analytical approaches to understanding the macroeconomic consequences of intervention in the foreign exchange market, devaluation and revaluation, monetary policy, fiscal policy, and policy coordination within and across borders; international capital mobility, transfer, and default; economic growth, expectations, disequilibrium, and optimal portfolio choices. Economics 872 and 874 are the monetary-side analogues to the real-side courses 871 and 873, respectively. For the most recent syllabus for Economics 872, see www.ssc.wisc.edu/~cengel/Econ872/SyllabusFall2005.pdf .
The weekly international economics workshop, 977-978, is an integral part of the program, in which both faculty and advanced graduate students participate actively. For a recent list of seminar presentations, see www.ssc.wisc.edu/~cengel/IntWkshp/int_wkshp.htm .
The core material deals with labor supply decisions made by rational households, labor demand decisions made by profit-maximizing firms, and the equilibrium wage differentials and employment patterns implied by these decisions when markets are competitive. Applications include the analysis of industry wage differentials, life-cycle age-earnings profiles, and returns to human capital investments. Further topics, emphasizing deviations from the competitive ideal, include efficiency wages and other incentive schemes, discrimination, bargaining between workers and employers to divide monopoly rents, and unemployment.
There are two required courses for the labor major, Economics 750 and 751, usually taken in the second year of the program. Both theoretical and empirical research is emphasized in these courses, and students begin work on a research paper that will help lay the foundation for dissertation research. These courses are supplemented by an active workshop program featuring speakers from various universities and research centers (including Wisconsin).
Labor economics faculty are often affiliated with the Institute for Research on Poverty, and with the Center for Demography and Ecology.
These institutes are sometimes a source for research assistantship positions and support for dissertation research for labor majors.
In addition to the courses offered in the department (in general up to five per year), the field recognizes courses taken outside the department (e.g., mathematics courses for those interested in theory, probability and statistics, and courses for students planning to work on empirical topics) as well as other fields.
Students are required to participate--both presenting their own research and discussing research performed by others--in the weekly macro workshop. In addition, depending on demand, the field organizes a brown bag seminar designed to encourage students to present research at an early stage, or a reading group to discuss current research topics.
Many of the faculty in public economics are also affiliated with the Institute for Research on Poverty. Many students find the IRP to be a valuable resource for data and technical support and, for some, possible employment during graduate school.
For students interested in health economics, the health economics program within the public economics group annually supports several graduate trainees with a grant from the National Institute of Mental Health. The program is open to students in any field. Special course offerings in health economics include a lecture course and a research seminar. The research seminar explores a particular topic each semester and students (individually or in small groups) conduct original research.
The department has a well-organized placement service. Each year a faculty member functions as the placement officer. He or she is assisted by the placement secretary who coordinates the sending of resumes and letters of recommendation, makes available job vacancy information, and offers general guidance. To prepare for the job market convention of the American Economic Association, all students are given mock "job market interviews" by faculty members who are unfamiliar with the student's work. Students also receive extensive help from their primary advisor, who in addition to providing general counsel during the process of job search, often is instrumental in contacting colleagues at other universities, or in bringing the student to the attention of the vast network of former Wisconsin Ph.D.'s employed in universities, colleges, government, and the private sector. Students also benefit from the fact that many government agencies, including the Board of Governors, the World Bank, the International Monetary Fund, and several Federal Reserve banks often actively recruit on campus.
Graduates generally seek and accept research positions in academia, though some sometimes gain employment with international organizations, government, or private consulting firms. In the last six years, placements at U.S. universities have included positions as assistant professors at Yale University, Northwestern University, University of Michigan, University of Pennsylvania, University of California-San Diego, Boston University, Carnegie-Mellon University, Duke University, University of California-Santa Cruz, University of Southern California, University of Washington, University of California-Santa Cruz, University of Southern California, Tufts University, University of Virginia and the College of William and Mary. Placements at non-U.S. universities have included London School of Economics, McMaster University, Hong Kong University of Science and Technology, New Economic School in Moscow, Queen’s University, and the National University of Singapore. Students who prefer non-academic employment have accepted positions at institutions including the Federal Reserve Board of Governors, the International Monetary Fund, the Bank of International Settlements, the Congressional Budget Office, Korea Economic Research Institute, Bates, White and Ballentine, Deloitte and Touche, ERS Group, Economic Policy Institute, Welch Consulting, the Institute of Economics-Academia Sinica, and Mathematica Policy Research Institute.
To receive full consideration for financial aid, all materials are due January 1.
All applications for admission to the Department of Economics will be considered for departmental financial support if application materials are received by this date. The department offers a limited number of financial support packages to incoming students with outstanding records. These packages generally guarantee support for four years of study and take the form of fellowship, teaching assistantship, research assistantship, or a combination of the three.
In most cases where students do not receive support in their first year, the department has been successful in providing support in subsequent years. All continuing support is based on the condition that a student is making good progress in the program.
Applications received after February 1 will not be processed by the department.
Admission requirements include a bachelor's degree, plus three semesters of calculus, a semester of linear algebra, and a semester of mathematical statistics, which must be completed before entering the program. Mathematics preparation should include multivariate calculus, elementary probability, and regression analysis. Applicants must submit three letters of recommendation and Graduate Record Exam (GRE) scores.
Every applicant whose native language is not English, or whose undergraduate instruction was not in English, must provide official scores from the Test of English as a Foreign Language (TOEFL), or the International English Language Testing System (IELTS).
For more information: Graduate Advisor, Department of Economics, 7235 Social Science Building, 1180 Observatory Drive, Madison, WI 53706; 608/262-3285; gradpro@ssc.wisc.edu; www.ssc.wisc.edu/econ/grad.