Economics is a subject which puts emphasis on acquiring problem-solving skills that can be applied in a wide variety of settings. It provides a general analytical approach: a way of thinking rather than detailed knowledge about narrowly-defined issues. This approach will serve the student well throughout his or her career.
Economics is a subject which puts emphasis on acquiring problem-solving skills that can be applied in a wide variety of settings. It provides a general analytical approach: a way of thinking rather than detailed knowledge about narrowly-defined issues. This approach will serve the student well throughout his or her career. Economics works on many levels, ranging from the micro to the macro to the international. At the micro level, it deals with the problems facing individual producers, consumers and factor owners, and the implications of their decisions for the economy as a whole. At the macro level, the focus is on the behavior of economic aggregates like the rates of inflation and unemployment, and on how public policy choices affect aggregate economic outcomes. At the international level, the focus of attention is on the implications of interactions between countries such as international trade and factor movements, as well as the reasons why some countries experience more favorable development trajectories than other countries.
The objective of the Master specialization in Economics at the Stockholm School of Economics is to give students a deep understanding of economics. The Master specialization in Economics combines a rigorous theoretical approach with extensive real-world applications. Students will learn how to use economic theory and methods in solving complex problems in many areas of economics. This will be accomplished through a structured learning environment where a solid theoretical understanding will be acquired during the first part of the program, and where a practically oriented problem-solving ability will be the focus of the second part of the program.
The Department of Economics at the Stockholm School of Economics is one of the leading economics departments in Europe with around 15 full-time faculty and around 35 PhD students. Important research areas at the department include behavioral economics, development economics, economic geography, economic growth, economic policy, game theory, industrial organization, international trade, health economics, macroeconomics and microeconomic theory. Faculty publish regularly in top economic journals and teach courses in their areas of expertise. According to the Financial Times ranking of Master programs (10-5-2009), the SSE is 3rd in Europe when it comes to economics.
During the first semester the focus is on the theory and empirical methods of economics. The courses are designed to provide students with a thorough understanding of state-of-the-art models and techniques used in economic analysis. The four compulsory courses are:
5301 Mathematics for Economists (7.5 ECTS). The course deals with essential mathematical techniques for solving economic problems. After completing this course, students should be able to solve optimization problems with and without constraints, investigate the consequences of changes in solutions due to changes in model parameters, perform mathematical operations on matrices and vectors, and identify the properties of sets of vectors.
5302 Microeconomics (7.5 ECTS). The course covers the modern theory of consumer and producer behavior under different market structures, with special emphasis on game-theoretical analysis and problem-solving. After completing this course, students should be familiar with the game-theoretical concepts of Nash equilibrium, subgame perfect equilibrium, and perfect Bayesian equilibrium, and be able to apply them to new problems.
5303 Macroeconomics (7.5 ECTS). The course is centered around two key macroeconomic questions: (1) what creates growth and prosperity in the long run and (2) what causes business cycles in the short run. After completing this course, students should have knowledge and understanding of key macroeconomic models and concepts, particularly the Solow and neo-classical growth models, and be able to use these models to analyze the effects of changes to economic policy.
5304 Econometrics (7.5 ECTS). This course focuses on the concepts of causality, identification and estimation. The course provides students with a rigorous introduction to econometric analysis of cross section and panel data. After completing the course students should be able to critically evaluate and understand applied empirical research and to apply modern econometric techniques using real data.
The second semester continues with the theory and empirical methods of economics, but gradually the focus shifts to applications and extensions. This part builds on the skills acquired during the first semester, and broadens and deepens the students’ knowledge of economics. The four compulsory courses are
5314 Applied Econometric Time Series (7.5 ECTS). This course provides more training in econometrics. Topics covered include maximum likelihood, outliers, and nonlinear regression. There is also coverage of time series and macroeconometrics, in particular, ARMA models, VAR and SVAR models, outliers and breaks in time series models, and nonlinear time series. After completing this course, students should have the tools to estimate and evaluate a wide variety of models.
5309 Dynamic Macroeconomic Analysis (7.5 ECTS). The course provides a rigorous treatment of modern macroeconomic research and its microeconomic foundations. The covers the analytical tools and computational methods necessary for macroeconomic analysis, with particular attention to the study of business cycles. After completing this course the students should be able to write code in Matlab; to compute equilibrium outcomes in deterministic and stochastic settings; and to calibrate economic models to real world data.
5313 Behavioral Economics (7.5 ECTS). The course is intended to enhance students’ knowledge and skills in behavioral economics; both in terms of understanding how human behavior typically deviates from the conventional “economic man” model and in terms of designing and interpreting economic experiments. After completing this course the students should be able to design and interpret economic experiments; to understand the main theoretical models of behavioral economics; and to gain insights from the results of economic experiments in a number of key areas of economics.
5311 International Trade (7.5 ECTS). The course aims to understand the mechanism of global economic integration, its consequences on the level and distribution of income within and across countries, and the effectiveness of policy interventions in globalized economies. After completing this course students should understand the theoretical foundations of professional and policy discussions on the consequences of globalization and evaluate them in the light of empirical evidence.
The second year of the Master program is devoted to taking more courses (30 ECTS) and thesis writing (30 ECTS). During the second year of the Master program the Department of Economics currently offers three elective courses that students can take:
5315 Development Policy (7.5 ECTS). This course will examine major current issues related to the areas of health, education, corruption, institutions, and gender in developing countries. The goal is to provide an overview of the challenges of world poverty and to study different policy interventions and their effectiveness. The course will also cover the application of econometric program evaluation methods in development economics.
5310 Labor Markets (7.5 ECTS). The course deals with theoretical models for analyzing issues pertaining to aggregate labor markets. Much of the course is devoted to explaining why hours of work differ markedly across countries. After completing this course, students should understand the key macroeconomic models relevant for the study of aggregate labor markets, particularly the neo-classical growth model, the overlapping generations model and the search and matching model.
5308 Markets and Institutions (7.5 ECTS). This course aims to give students an understanding of the links between institutions and the functioning of markets. Topics covered include the role that property rights play in economic development, why the world economy did not experience sustained growth before 1800, and what is the interplay between financial markets and economic development. After completing this course, students should be able to critically examine empirical evidence on links between institutions and economic development.
Students can also take elective course offered by other departments. For example, elective courses currently offered by the Department of Finance include:
4301 - Corporate Finance Theory
4302 - Theory of Investments
4303 - Advanced Derivatives
4311 - Valuation and Capital Budgeting
4314 - Behavioral Finance
4305 - Debt Instruments and Markets
4307 - Banking and Financial Intermediation
4304 - Empirical Methods in Asset Pricing
Finally, students that specialize in economics must write a Master Thesis and it must be in the area of economics. The MSc Thesis is a 30 ECTS credits independent piece of work where the student shall show that she/he can identify and analyze a problem and present and defend the thesis in a proper way. The thesis should illustrate the student´s ability to think systematically and critically as well as showing an ability to interpret and discuss data and literature. Half of the second year is devoted to thesis writing. Students can do half of their thesis in the Fall semester and half in the Spring semester, or all in the Spring semester (or all in the Fall semester but this is not recommended).
Specific Entry Requirements
In addition to the basic requirements for admission, the Master specialization in Economics also requires that the applicants should have a good knowledge of basic statistics and econometrics.
Students with a Master specialization in Economics can look forward to a wide range of possible careers. The following are examples of the types of organizations/fields that demand the kind of skills that a Master specialization in Economics provides:
- Domestic and international companies
- Consultancy firms
- International organizations like the United Nations and its specialized agencies, the World Bank, the International Monetary Fund and regional development banks
- Branch and business organizations
- The entire public sector, including ministries, central government bodies, counties, municipalities
- The foreign service, including embassies and consulates abroad
- National and international development cooperation agencies, governmental and non-governmental
- Journalism and media of all kinds
Economics majors are frequently found in the upper ranks of all these organizations/fields.