Catalogue 2007-08

• USC College of Letters, Arts and Sciences
• Economics
  • Undergraduate Degrees
  • Graduate Degrees
  • Courses of Instruction

Graduate Degrees

The graduate program in economics is designed to prepare students for careers in teaching, research, industry and government. The department emphasizes economic theory and econometrics; applied economic analysis, including microeconomics, macroeconomics, international and development economics, urban and regional economics; and political economy.

Admission Requirements

Prerequisites

The typical applicant for admission will normally have completed an undergraduate major in economics. Minimal prerequisites for admission to a master's degree program include courses in intermediate microeconomic and macroeconomic theory, a year of calculus, and a semester of statistics. Applicants for the Ph.D. program are normally expected to have completed more than the minimum, particularly in the areas of mathematics and statistics.

Criteria

The Graduate Record Examinations General Test, three letters of recommendation and the student's statement of purpose are required. The letters and statement should be sent directly to the Director of Graduate Admissions, Department of Economics, KAP 300, University of Southern California, Los Angeles, CA 90089-0253. International applicants are required to take the TOEFL examination. In addition, applicants for financial aid are advised to take the GRE Economics Subject Test and international students must have a TSE score of 200. Admission is based on the appropriateness and quality of completed course work, GRE scores and the letters of recommendation.

Procedure

Application deadlines for master's degrees are normally April 15 for the fall semester and November 1 for the spring. Completed doctoral fellowship and assistantship applications are due by December 1. Except for unusual cases, students are permitted to begin Ph.D. programs only during the fall semester.

Placement Examinations

Prior to registration, all entering graduate students are required to take the Economics Department placement examinations in general economic theory and the basic principles of algebra, calculus and statistics. Depending on the outcome of these examinations, deficiency course work yielding no credit toward graduate degrees may be required. Students whose native language is other than English will be required to take an English placement examination. Course work in English may be required.

Degree Requirements

These degrees are under the jurisdiction of the Graduate School. Refer to the Requirements for Graduation section and the Graduate School section for general regulations. All courses applied toward the degrees must be courses accepted by the Graduate School.

Foreign Language/Research Tool Requirements

There is no foreign language requirement. However, competence in the use of one computer programming language is required for all graduate degrees offered through the Department of Economics, except the Ph.D. in Political Economy and Public Policy. Such competence can be demonstrated either by course work or examination. Students in master's programs must meet this requirement before starting the thesis or taking the comprehensive examination; students in the Ph.D. program must complete it before taking the qualifying examination.

Master of Arts in Economics

Thesis Option Requirements

At least 24 units (usually six courses; at least four must be in economics at the graduate level) and completion of an acceptable thesis accompanied by registration in ECON 594ab is required. Requirements include the following courses in economics:

required courses		units
ECON 417	Statistics for Economists	4
ECON 500	Microeconomic Analysis and Policy, or
ECON 503	Microeconomic Theory I	4
ECON 501	Macroeconomic Analysis and Policy, or
ECON 505	Macroeconomic Theory I	4
ECON 511	Econometric Methods,	4-4 or
ECON 513	Practice of Econometrics	4
ECON 594ab	Master's Thesis	2-2

Comprehensive Examination Option Requirements

At least 32 units (usually eight courses; at least six must be in economics at the graduate level), and satisfactory performance on a comprehensive examination in economic theory is required.

required courses		units
ECON 417	Statistics for Economists	4
ECON 500	Microeconomic Analysis and Policy, or
ECON 503	Microeconomic Theory I	4
ECON 501	Macroeconomic Analysis and Policy, or
ECON 505	Macroeconomic Theory I	4
ECON 511	Econometric Methods,	4-4 or
ECON 513	Practice of Econometrics	4
Not more than 4 units may be ECON 590; 590 units cannot be counted as part of the required minimum of graduate level courses specified above.

Master of Arts in Economic Developmental Programming

This degree program is designed to provide advanced training in the basic tools of development programming and their application to practical problems of developing countries. The program is structured to enable well-prepared students entering in May to finish the following summer. Requirements include the following courses in economics:

required courses		units
ECON 401	Mathematical Methods in Economics	4
ECON 500	Microeconomic Analysis and Policy, or
ECON 503	Microeconomic Theory I	4
ECON 501	Macroeconomic Analysis and Policy, or
ECON 505	Macroeconomic Theory I	4
ECON 502	Mathematical Methods in Dynamic Economics, or
ECON 607	Topics in Dynamic Optimization, or
ECON 615	Applied Econometrics	4
ECON 511	Econometric Methods	4
ECON 513	Practice of Econometrics	4
ECON 523	Economic History and Development, or
ECON 537	Contracts, Organizations, and Institutions, or
ECON 541	Economic Development, or
ECON 634	Political Economy of Institutions, or
ECON 644	Economic Development Programming and Policy Planning	4
ECON 650	International Trade Theory, or
ECON 651	International Monetary Theory	4
ECON 590	Directed Research, or
ECON 692	Seminar in Economic Development	2-8

In addition, a total of three courses in one of several designated options in economics, international relations, law, urban planning and development, demography, or business administration is required. In certain cases units can be granted for internship work. The total unit requirements are 32-48, including a comprehensive examination or a thesis.

For a detailed description of the program and its requirements see Master of Arts in Economic Developmental Programming, available from the Department of Economics faculty advisor.

Master of Science in Mathematical Finance

The objective of this master of science program is to produce graduates with a rigorous foundation in the economic theory and mathematical modeling of financial markets. The program creates an integrated curriculum spanning four disciplines: economics, mathematics, econometrics/statistics and computational/numerical analysis. The program is designed for recent graduates in the fields of applied mathematics, physics and engineering -- or for graduates in economics, business and finance with strong mathematical backgrounds -- who wish to pursue high-tech finance careers in financial institutions, industry or government. The program should also be attractive to gifted undergraduates who are able to complete a combined B.A./M.S. degree with specialization in financial mathematics in five years.

Admission Requirements

Refer to the Requirements for Graduation section and the Graduate School section of the catalogue for general regulations. All applicants must take the GRE General Test. Complete transcripts of undergraduate and any graduate level courses are required, as well as a statement of purpose and three recommendation letters. A substantial undergraduate background in mathematics is required, which should include one semester of real analysis or advanced calculus, one semester of linear algebra and one semester of advanced probability/statistics. Candidates with weaker backgrounds may be required to take mathematics classes prior to admission to the program. An undergraduate knowledge of microeconomics and of macroeconomics, and partial differential equations is helpful, although it is not required for admission. Some experience in Matlab and C/C++ programming is also useful.

Foreign Language Requirement

There is no foreign language requirement.

Course Requirements

Thirty units of course work are required. Students are required to complete a final project integrating material from all the courses. The program consists of:

Financial Economics and Econometrics		UNits
ECON 659	Economics of Financial Markets I	4
two courses from:
ECON 613	Economic and Financial Time Series I	4
ECON 614	Economic and Financial Time Series II	4
ECON 652	Economics of Financial Markets II	4

Theory of Stochastic Processes		UNITs
MATH 503	Stochastic Calculus for Finance	3
one course from:
MATH 505b	Applied Probability	3
MATH 506	Stochastic Processes	3
MATH 509	Stochastic Differential Equations	3

Statistics (Choose one)
ECON 614	Economic and Financial Time Series II	4
MATH 508	Filtering Theory	3
MATH 512	Financial Informatics and Simulation	3
MATH 541ab	Introduction to Mathematical Statistics	3-3
MATH 542L	Analysis of Variance and Design	3
MATH 543L	Nonparametric Statistics	3
MATH 547	Methods of Statistical Inference	3
MATH 650	Seminar in Statistical Consulting	3
PM 511abL	Data Analysis	3
PM 544L	Multivariate Analysis	3

Numerical/Optimization Methods (choose one)
MATH 458	Numerical Methods	3
MATH 501	Numerical Analysis and Computation	3
MATH 502ab	Numerical Analysis	3-3
MATH 504ab	Numerical Solution of Ordinary and Partial Differential Equations	3-3
MATH 585	Mathematical Theory of Optimal Control	3
PM 520L	Advanced Statistical Computing	3

Computational and Empirical Finance (Choose two)
ECON 695	Internship in Mathematical Finance	4
FBE 535	Applied Finance in Fixed Income Securities	3
FBE 554	Trading and Exchanges	3
FBE 555	Investment Analysis and Portfolio Management	3
FBE 559	Management of Financial Risk	3
FBE 589	Mortgages and Mortgage- Backed Securities and Markets	3
FBE 599	Special Topics	1-3
MATH 512	Financial Informatics and Simulation (Computer Labs and Practitioner Seminar)	3
MATH 590	Directed Research	1-12

The courses in statistics/numerical/optimization methods and computational and empirical finance are considered electives and have to be approved for each student by the program advisors. Other electives might be approved by the advisors.

Juris Doctor/Master of Arts in Economics

Students are required to complete 92 units of law and economics course work, four units of which must constitute a thesis acceptable to the faculties of the USC Gould School of Law and the Department of Economics. Before enrolling in economics courses, students must have completed an undergraduate course in probability and statistical inference (e.g., BUAD 310). Students with undergraduate degrees in such disciplines as business, economics, mathematics and psychology will usually have taken such a course as part of their undergraduate program.

First Year: Required law school courses.

Second and Third Years:		Units
ECON 500	Microeconomic Analysis and Policy	4
ECON 511	Econometric Methods, or
ECON 513	Practice of Econometrics	4

Two Additional Graduate Level Courses in Economics (eight units): ECON 680 Industrial Organization and ECON 681 Economics of Regulated Industries are recommended, but the student is free to choose any graduate level courses other than ECON 590 or 790 in consultation with the program advisor. ECON 401 Mathematical Models in Economics may be substituted for one of these courses, and ECON 417 Statistics for Economics or ECON 414 Introduction to Econometrics may be substituted for the other. (These three courses are applicable toward graduate credit.)

Four Units of Thesis: The thesis must be acceptable to both the faculty of the law school and the faculty of the Department of Economics.

Thirty-nine Units of Law Courses: including one course in a subject matter related to economics (including but not necessarily limited to Taxation, International Business Transactions, Natural Resources Law, Antitrust Law I, Antitrust Law II, Regulated Industries, Labor Law, Administrative Process, Taxation of Corporations or Land Use Seminar and Land Finance Seminar). In addition to the LSAT, students interested in this dual degree program are required to take the aptitude and advanced economic portions of the Graduate Record Examinations (GRE).

Doctor of Philosophy in Economics

Application deadline: December 1

The Ph.D. in Economics requires 60 units of graduate level courses numbered 500 or higher (excluding ECON 500, ECON 50l, ECON 590, ECON 690, ECON 691, ECON 692, ECON 693, ECON 694, ECON 790 and ECON 794).

required courses		Units
The following courses must be taken within the first 36 units of graduate level courses:
ECON 503	Microeconomic Theory I	4
ECON 505	Macroeconomic Theory I	4
ECON 511	Econometric Methods	4
ECON 514	Probability and Statistics for Economists	4
ECON 603	Microeconomic Theory II	4
ECON 605	Macroeconomic Theory II	4

additional Required units		Units
A minimum of 6 units selected from the following:
ECON 690	Seminar in Economic Theory	2-8
ECON 691	Seminar in Econometrics	2-8
ECON 692	Seminar in Economic Development	2-8
ECON 693	Seminar in Applied Economics and Public Policy	2-8
ECON 694	Seminar in Dynamic
	Economics	2-8
A minimum of 4 units of
ECON 794abcdz	Doctoral Dissertation	2-12

Students must take a core theory examination immediately after the completion of ECON 503, ECON 505, ECON 603 and ECON 605 in order to continue in the Ph.D. program. There is also a breadth requirement which may be satisfied by taking either ECON 523 Economic History and Development or ECON 527 Classical Economic Theory and Its Critics or ECON 538 Values and Social Analysis.

After passing the core theory examination, the student should consult the director of graduate studies on the appointment of a Ph.D. guidance committee. The student should complete two advanced fields of study with the approval of the guidance committee and the director of graduate studies. The requirements for completing each advanced field of study consist of (1) at least two courses numbered 600 or higher in that field with a minimum grade of A- in each, (2) satisfactory completion of one of the seminars related to the field and (3) presentation of a research paper in a class or seminar. In addition, the student should complete a minor field which consists of a course numbered 600 or higher with a minimum grade of B. The signing of the student's Permission to Take the Qualifying Examination form will signify the satisfactory completion of the field requirements.

The remainder of the courses to total 60 units must be preapproved by the guidance committee. However, not more than four units of ECON 590 and/or 790 can be taken in each semester. Courses taken outside the department or USC cannot count toward the completion of a field and are not allowed before at least one advanced field is completed. Waivers to the course requirements based on equivalent work at another university may be made upon petition to the director of graduate studies up to a maximum of 12 units. Waivers for any other reason require the approval of the department graduate committee.

Grade Point Average Requirements

In addition to the Graduate School requirements, a minimum GPA of 3.0 on all course work taken toward the 60 units requirement must be achieved. ECON 615 or a higher level course in econometrics must be completed with a grade of B or better.

Screening Procedure

Students desiring the Ph.D. must undergo a screening procedure before completing more than 24 units of graduate level courses. The process involves a review of the student's course grades, performance on the core theory examination, and demonstrated research ability. Students who pass the screening procedure are permitted to continue studies toward the Ph.D. degree.

Core Theory Examination

Before beginning the third semester of graduate study, the student must pass a written examination in general economic theory including applications. A maximum of two attempts is allowed. Not taking the examination at a given due time is considered as failing the examination once. The core theory examination is offered twice every year during the summer session. Any exceptions are subject to approval of the director of graduate studies.

Empirical Research Paper

During the summer after the fourth semester of study, the student must submit an empirical paper using quantitative methods to the examination committee. The paper may use field, experimental or simulated data. In this paper, the student should demonstrate competence in using a computer programming language and software.

Research Paper

During the summer after the sixth semester of study, the student must submit a research paper to a committee of faculty. The paper must be of publishable quality.

Seminar Requirements

Every student is required to take and satisfactorily complete three, two-unit research seminars chosen from ECON 690, ECON 691, ECON 692, ECON 693 and ECON 694. The same seminar may be taken more than once. Before completing the dissertation, the student must present at least one original research paper in a seminar of the student's choice.

Dissertation Proposal Preparation

The student is required to write a research proposal on a topic suitable for a dissertation. Normally, the chair of the student's guidance committee directs this work. The written proposal is presented and critiqued during the qualifying examination.

Qualifying Examination

Upon successful completion of course and grade requirements, the paper requirement, and the core theory examination, the student takes an examination, which focuses on the presentation and defense of the written dissertation proposal. After passing this examination, the student is admitted to candidacy for the Ph.D. degree. This examination must be taken not later than the end of the seventh semester of study.

Doctoral Dissertation

After admission to candidacy, the student forms a dissertation committee composed of three faculty members, one of whom must be from an outside department. The chair of this committee is the dissertation supervisor. The student must register in sequence for ECON 794abcdz Doctoral Dissertation each semester, excluding summer sessions, until the dissertation and all other degree requirements are completed.

The dissertation is defended in an oral examination administered by the dissertation committee when the committee agrees that the student has completed the research and a satisfactory draft of the dissertation has been written. If the committee agrees to pass the student, all suggested extensions, modifications, and corrections are incorporated into a final draft which must be approved by all members of the committee.

It is the student's responsibility to see that the proper paperwork is submitted to the Graduate School upon completion of each requirement for the Ph.D. degree.

Doctor of Philosophy in Pharmaceutical Economics and Policy

Application deadline: December 1

The Department of Economics and the Department of Pharmaceutical Economics and Policy (School of Pharmacy) jointly offer a program of study leading to the Ph.D. degree and to the M.A. degree in the process of work toward the Ph.D. degree.

Required courses include both core requirements and area requirements. Core requirements include courses in economic theory, econometrics, and research methods. Area requirements include courses in health economics, pharmaceutical economics, welfare theory and applied econometrics.

For a detailed description of this program, see the School of Pharmacy section of this catalogue.

Doctor of Philosophy in Political Economy and Public Policy

The Department of Economics, the Department of Political Science and the School of International Relations jointly offer a program of study leading to the Ph.D. degree and to the M.A. degree in the process of work toward the Ph.D. degree.

Required courses include both core requirements and area requirements. Core requirements include courses in economic theory and history of economic theory; history of political thought; scope, methodology and research methods; and political economy and public policy. Area requirements include courses selected from the following three areas of concentration: comparative and developmental political economy; politics, economics and the policy process; and international political economics. There is no computer programming requirement for this degree.

For a detailed description of this program, see the Political Economy and Public Policy.

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