Master in Economics

managing institutions

Ecole Polytechnique (year 1)

ENSAE (year 2)

First Year (M1)

Outline of the First Year: M1

S1 First Semester
ECO 550 - Microeconomics 1: 6 ECTS.
ECO 551 - Macroeconomics 1: 6 ECTS.
ECO 552 - Econometrics 1: 6 ECTS.
1 Elective course: 2 ECTS.
S2 Second Semester
ECO 560 - Microeconomics 2: 6 ECTS.
ECO 561 - Macroeconomics 2: 6 ECTS.
ECO 562 - Econometrics 2: 6 ECTS.
1 Elective course: 2 ECTS.

ECO 511 - Project in Applied Economics: 8 ECTS.
Internship: 12 ECTS.

List of courses

Location: ENSAE, and Ecole Polytechnique, Palaiseau.

Preparatory course in Mathematics and Probability (end of August, beginning of September)

Mathematics, Optimization, Probability, and Statistical Inference44 hours
Nicolas Vieille, Pierre-Edouard Collignon

– Basic calculus.
– Linear algebra.
- Static and dynamic optimization.
– Basic probability theory.
– Statistical inference.

Preparatory course in Econometrics

Introduction to Stata8 hours
Omar Sene

The objective of this course is to allow participants to be able to work and conduct their own empirical analyses with the statistical software STATA, which is one of the leading programs used by researchers in econometrics.

The course will be taught in a very applied way using real-world datasets, covering basic commands, data management, data manipulation, graphs, statistical analysis, regression analysis (cross sectional data, time series, panel data, and qualitative data) and basic programing (more specifically loops).

Over the whole year

Project in Applied Economics - ECO 511 8 ECTS

Students must work in groups of 2 or 3. They should rely on a statistical software, such as Stata, to apply econometric methods to a dataset. This work leads to the writing of a small dissertation and to an oral presentation.

Mandatory courses: First term (S1)

Microeconomics I - ECO 550 6 ECTS

Individual decision-making and market equilibrium45 hours
Emmanuelle Taugourdeau, Tristan Tomala

– Choice theory and introduction to welfare economics
– Consumer theory
– Social choice (preference aggregation and manipulability)
– Producer theory
– Choice under uncertainty (expected utility, risk aversion)
– General equilibrium, fundamental welfare theorems
– Asset markets and general equilibrium under uncertainty
– Externalities and public goods
– No trade theorem, rational expectations.

Macroeconomics I - ECO 551 6 ECTS

Economic Growth45 hours
Georgy Lukyanov, Alessandro Riboni

- Neoclassical growth model
- Public policies in the neoclassical growth model
- Structural transformation
- Inequality, political economy of growth
- The overlapping generations model
- Public policies and bubbles in the overlapping-generations model
- Product variety model
- Schumpeterian growth.

Econometrics I - ECO 552 6 ECTS

The Linear Regression Model and Extensions45 hours
Xavier d'Haultfoeuille, Thierry Kamionka

Simple and multiple regression analysis: estimation, inference and asymptotic analysis:
- Derivation of the OLS estimator
- Student t tests and F tests under normality of the residuals
- Confidence intervals
- Consistency and asymptotic normality
- functional forms and specifications
- Heteroskedasticity
- Clustering
- Robust inference
- Weighted least square estimation
- Basic Panel Data Models
- Difference in differences; First difference estimation
- Instrumental variable estimation
- Two-stage Least Squares estimation
- Inference, weak and invalid instruments
- Simultaneous equations
- Exogeneity and over-identification tests.

Mandatory courses: Second term (S2)

Microeconomics II - ECO 560 6 ECTS

Strategic Interactions and Information45 hours
Yukio Koriyama, Olivier Gossner

– Normal form games, pure and mixed strategies, equilibrium concepts (dominance, rationalizability, Nash)
– Imperfect competition (Cournot, Bertrand, Hotelling)
– Extensive form games with perfect information, backwards induction
– Extensive form games with imperfect information (information sets), normal form representation
– Bayesian games, auctions, adverse selection, signaling, screening
– Equilibrium refinements (Perfect Bayesian equilibrium, sequential equilibrium)
– Social choice and introduction to mechanism design
– Contract theory, principal agent models, risk sharing.

Macroeconomics II - ECO 5616 ECTS

Business cycles45 hours
Jean-Baptiste Michau

– Traditional macroeconomics: The IS-LM AD-AS model
– Consumption
– Investment; The ramsey model
– Determination of the price level
– Real business cycle theory
– The new Keynesian framework
– Asset pricing; The Aiyagari model
– Search models of the labor market
– International macroeconomics
– The Great Recession.

Econometrics II - ECO 562 6 ECTS

Nonlinear, Qualitative Data, and Panel Methods45 hours
Arne Uhlendorff, Christian Belzil

– Extremum Estimators 1st part: M-Estimators (Maximum Likelihood, Nonlinear Least squares)
– Extremum Estimators 2nd part: GMM
– Hypothesis Testing: Wald, Lagrange Multipliers, Likelihood Ratio Statistics
– Instrumental Variables, 2SLS, Multiple-Equation GMM (if time)
– Dynamic Panel Data: Instrumental Variables and GMM
– Binary Choice Models
– Multinomial and Ordered Choice Models
– Non-linear Panel Data Models
– Censored Regressions
– Duration Models.

Elective courses: First term (S1)

Experimental Economics – ECO 573 – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Experimental Economics20 hours
François Pannequin

This course provides an introduction to experimental economics. The emphasis will be on the methodology of experimental economics, its relevance to testing economic predictions, and to identify patterns of behaviors. The course will review some of the main results of individual decision making under risk and uncertainty, social interactions, and social decision making. Students will learn how to design experiments and interpret their results.

History of Economics since 1945 – ECO 581 – Location: ENS Paris-Saclay, Cachan 2 ECTS

History of Economics since 194520 hours
Philippe Fontaine

This course considers the increasing significance of economics within the social sciences after the Second World War. It points to historical transformations that made it possible for economists to present theirs as a discipline that could free itself from value judgments. Special attention is given to economists’ war service, the expansion of higher education, foundation patronage and cross-disciplinary research ventures. The course shows that much can be learned about today's economics from identifying the historical reasons for presenting economics as a special social science. Another dimension of the course centers on the writing of the history of recent economics by noneconomists.

European Economics – ECO 575 – Location: ENS Paris-Saclay, Cachan 2 ECTS

European Economics20 hours
Caroline Vincensini

This course focuses on the main steps of European economic integration, trade integration, and monetary integration, from a double historical and economic perspective. In each case (customs union, common market, monetary union, recent developments in the monetary union), the objective is first to replace European integration in its historical context (economic and political history), and second to study the tools of economic theory that are relevant to analyze each successive step.

The course will thus deal with approaches such as comparative political economy and European economic history on the one hand, the microeconomics of a customs union, new trade theories and commons markets, the optimum currency area approach, the post-Keynesian approach to the monetary union, the time inconsistency literature, etc., on the other hand.

Development Economics – ECO 576 – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Development Economics20 hours
Thomas Vendryes

The objective of this course is to provide a presentation of the phenomenon of economic development, and an introduction to development economics. After a general depiction of the process of development, the main theories and schools of thought that structured the related research field are presented. Specific topics are then studied, mainly through classical or contemporary research papers: on the micro side, health and education, and on the macro side, institutions.

Elective courses: Second term (S2)

Competition Policy – ECO 580 – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Competition Policy18 hours
David Sevy

The course gives an overview of the economic concepts, theoretical approaches and quantitative methods used in the main areas of competition policy: restrictive agreements, abuse of dominance and merger control. The aim of the course is to demonstrate how the economic approach can contribute to the application of competition law. The course focuses on competition policy applications in French and European cases, but it can also be useful to theory-oriented economists interested in real markets or for students who want see a legal field where microeconomic principles are applied.

– Introduction to the theoretical and institutional framework of competition policy
– Market power and relevant market
– Abuse of dominant position 1
– Merger control 1
– Cartel and information exchanges
– Merger control 2
– Abuse of dominant position 2 (high-tech sectors)
– Vertical restraints
– New frontiers of competition policy (big data, privacy ...).

Macroeconomic Policy – ECO 581 – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Macroeconomic Policy20 hours
Hubert Kempf

The course presents a broad analysis of economic policy issues. It covers the tools and main issues of macroeconomic policy. Then, monetary policy instruments and strategies, fiscal policy and public debt issues are presented and discussed. The aim of the course is to allow students to decipher the current debates and policies followed in advanced economies.

Microeconomics for Public Economics – ECO 585 – Location: ENS Paris-Saclay, Cachan 2 ECTS

Microeconomics for Public Economics20 hours
Emmanuelle Taugourdeau

This course provides an introduction to the main public economic issues: social welfare, public choice theory, externalities, public goods, and taxation. It recalls the classical theory of market failures due to externalities and public goods and derives the main results from the public choice theory. A large part is devoted to the economic theory of taxation. The course contains rigorous mathematical tools and handles the microeconomic tools used in the public economic theory. To go further, particular attention will be devoted to the tax evasion and fiscal federalism issues.

Fintech, Blockchain and Cryptocurrencies – ECO 589 – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Fintech, Blockchain and Cryptocurrencies18 hours
Julien Prat

The financial industry was until recently a very concentrated sector. This is becoming less and less true as a wave of innovations greatly lowers the barriers to entry and intensifies the degree of competition among providers of financial services. Disruptive technologies are being implemented at an increasing pace, leading to major changes in the realms of payments, lending and borrowing, insurance, wealth management, venture capital.

To understand this revolution, one needs to have a good grasp of technological innovations as well as of the economics of the financial sector. This course will introduce students to both dimensions, allowing them to identify how financial services can be improved with new approaches.

The course will put a strong emphasis on the blockchain protocol because of its disruptive potential, hopefully preparing the audience for the next wave of innovations. We will adopt a hands-on approach with the objective of enabling students to monitor transactions over Bitcoin’s blockchain.

On completion of this course, students should understand:
– The ongoing trends in the Fintech industry and their technological underpinnings;
– How cryptographic functions make it possible to secure transactions over a public network? Why the blockchain technology can replace third-party certification;
– What are the main differences between the most prominent blockchain infrastructures;
– How the market for cryptocurrencies operates, and critically assess its functions and vulnerabilities;
– What are "smart contracts";
– How to identify the conditions under which smart and self-executing contracts can generate some value-added.

Environmental Economics with a Geography Focus – ECO 567A – Location: Ecole Polytechnique, Palaiseau 2 ECTS

Environmental Economics with a Geography Focus18 hours
Geoffrey Barrows

This course examines the supply and demand of environmental goods (mostly clean air and clean water) in heterogeneous regions. The course first introduces externalities into the neoclassical model and then studies different policy options for correcting market failures stemming from these externalities. The course then studies how agents sort across space when environmental quality differs between regions. Finally, the course considers how trade between regions impacts pollution, and the heterogeneous impacts of global climate change on welfare.

– Tiebout Sorting
– Environmental Justice
– Valuing Environmental Amenities Across Space
– Pollution Havens
– Adapting to Climate Change

Research internship: Third term (S3)

Micro ECO 591, Macro ECO 592, Finance ECO 593

During the third term, students must complete a research internship of at least 16 weeks. The internship must be either related to micro (ECO 591), to macro (ECO 592), or to finance (ECO 593).

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