University of Edinburgh
School of Economics
Economics 2 – 2011/2012
Pre-requisites
Economics 1A or permission of the Senior DOS
Visiting Students ONLY : There is a half year (semester 1) version of this course
TEACHING ARRANGEMENTS
The 3 lectures per week consist of two Economics lectures (Tuesday and Friday) and one weekly
lecture on Introduction to Data Analysis (Wednesday)*. The Data Analysis lecture will cover basic
material, knowledge of which will be necessary for Economics 2 and for courses in honours
years.
*For Weeks 1-5 of Semester 1, the timing of the Data Analysis lecture and the first Economics
lecture of the week will be switched. See below for more details.
Lectures
Tuesdays & Fridays 10:00-10:50
David Hume Tower, Lecture Theatre B
Wednesdays (Introduction to Data Analysis) 10:00-10:50
David Hume Tower, Lecture Theatre B
Tutorials:
Semester 1, weeks 2-10; Semester 2, weeks 2-6 and 8-11.
Tutorial attendance is compulsory. Penalties arise from failure to attend tutorials – see
overleaf.
Help Desk:
Maths Help Desk:
Please note:
Tuesdays and Fridays 1:05-1.50pm, Rm 3.04, 24 Buccleuch Place
Tuesdays 1:05-1.50pm, Rm 1.02, 22 Buccleuch Place
Help Desk locations for Semester 2 will change, and will be
confirmed at a later date.
WebCT: The Economics 2 WebCT site is the main source of information on course matters,
lecture handouts, information about essays, tutorial attendance records etc. It also contains the
Economics 2 Handbook – WHICH YOU ARE EXPECTED TO READ. You can access WebCT
via MyED (Inside MyED, WebCT is available from the myWebCT channel in the ‘Studies’ tab).
Tutorial Registration: can only be done using WebCT. Follow the instructions on the
Economics 2 WebCT site. Register for your tutorial as soon as possible. The longer you leave
it, the more restricted the choice of tutorial times you are likely to find open. If you attend a
tutorial without registering, you will be recorded as absent.
ASSESSMENT
There are two basic components to the assessment – class-work and a degree examination.
Class-work consists of: regular online tests; three class exams; and an essay. Further details of
these components are available in the Economics 2 Handbook on the Economics 2 WebCT site.
It is not possible to gain exemption from the degree examination in Economics 2.
The Final Mark for the course will be determined as follows:
Class Exam (multiple choice, October): 10%
Class Exam (multiple choice, December diet): 10%
Class Exam (multiple choice, February): 10%
Essay (2000 words, semester 2): 15%
Degree Exam (May diet): 50%
Online Tests: 5% (semester 1 and semester 2, each worth 2.5%)
- Online test mark for each semester will be the average of the highest 5 marks.
- Tutorial attendance: penalty 3 marks deducted for 5 missed tutorials, 6 marks deducted for 7
missed tutorials, 9 marks deducted for 9 missed tutorials.
Resit Exam (August diet): 100%
Economics 2 (VV1) Assessment:
Class Exam (multiple choice, October): 45%
Class Exam (multiple choice, December diet): 45%
Online Tests: 10%
- Online test mark will be the average of the highest 5 marks.
- Tutorial attendance: penalty 6 marks deducted for 5 missed tutorials, 12 marks deducted for 7
missed tutorials, 18 marks deducted for 9 missed tutorials.
Entry into Economics Honours normally requires a mark of 50% or more in Economics 2 (at
the first sitting).
PERSONAL TUTORS
Each student will have a personal tutor who will oversee his/her academic development over the
course of the year. Your personal tutor will also be the same tutor you have for Economics 2
tutorials and will arrange to have a half hour one-to-one meeting with you in the second semester
to discuss your academic performance so far and provide feedback.
ILLNESS, PERSONAL PROBLEMS, SPECIAL NEEDS AND DISABILITIES
In the first instance you should contact your Director of Studies, and the Course Co-ordinator.
See the Economics 2 Handbook on the Economics 2 WebCT site for more details.
READINGS
Texts: Microeconomics by R. Pindyck and D. Rubinfeld (7th edition) (Pearson)
Macroeconomics by N. Gregory Mankiw (7th edition) (Palgrave)
Introduction to Econometrics by James M. Stock and Mark W. Watson, only chapters 1-3
(2nd edition) (Pearson), or
Introductory Econometrics, A modern approach, by Jeffrey Wooldridge (4th edition)
(South-Western Cengage Learning)
Note: Instructors will provide students with more detailed lists of readings for each part of the
course.
BRIEF COURSE OUTLINE
Please, note that there may be some small changes.
Tuesday & Friday Lectures:*
Semester 1
Weeks
1–5
6-10
11
Semester 2
Weeks
1–6
7
8-11
20 Sept– 25 Nov 2011
General Equilibrium and
Game Theory
Uncertainty and Investment
No lectures/tutorials
Dr Santiago Sanchez-Pages
Dr Nick Vikander
17 Jan – 6 April 2012
Economic Growth
Reading/Study Week
Business Cycles
Professor Sevi Rodriguez Mora
no lectures or tutorials
Professor Andy Snell
Innovative Learning Week will take place from Feb. 20-24, after Week 5 and before Week 6.
There will be no lectures or tutorials during this week.
Wednesday Lectures on Introduction to Data Analysis with Dr Dimitra Politi:*
Tentative Schedule (subject to change)*
Fall Semester: Probability Theory and Probability Distributions
Week 1 (Tuesday lecture)
Introduction to Data Analysis in Economics
Week 2 (Tuesday lecture)
A primer on probability theory
Week 3 (Tuesday lecture)
Conditional probability, independence, and Bayes’ Theorem
Week 4 (Tuesday lecture)
Week 5 (Tuesday lecture)
Random variables, Probability Distributions, and Statistical
Independence
Statistical Independence (continued)
Week 6
Characteristics of Probability Distributions and some examples
Week 7
The Normal, Chi-squared, Student t, and F Distributions
Week 8
Random sampling and some sample statistics
Week 9
Large Sample Approximations, The Law of Large Numbers and The
Central Limit Theorem
The Central Limit Theorem, Semester I revision
Week 10
Spring Semester: Introduction to Statistics
Week 1
December exam discussion and feedback
Week 2
Statistical Inference, Estimation, and Hypothesis Testing
Week 3
Estimators and their properties in small and large samples; the case of
the population mean
Estimation of the population mean, and introduction to hypothesis testing
Week 4
Week 5
Hypothesis Testing (continued): estimating the population variance
Feb. 20-24
Innovative Learning Week: No lectures
Week 6
Hypothesis Testing (continued): the t-statistic
Week 7
Reading/Study Week: No lectures
Week 8
Hypothesis Testing (continued): significance levels and confidence
intervals
Hypothesis Testing (continued): comparing means from different
populations
Week 9
Week 10
Approaches to estimation: Least Squares, Method of Moments,
Maximum Likelihood
Relationships between two variables, Semester II revision
Week 11
IMPORTANT:
* For Weeks 1-5 of Semester 1, the Data Analysis lecture will take place on Tuesday, while
the Economics lectures will take place on Wednesday and Friday.
Assessments
21 October 2011
12 Dec – 21 Dec 2011
2 Feb 2012
17 February 2012
30 Apr - 25 May 2012
Aug 2012
Class exam
Economics 2 Class Exam Period
Essay due 3pm
Class exam
Economics Degree Exam Period
Resit Examination
ONLINE TESTS
There will be weekly on-line tests set up on WebCT during semester time. Each test will be
available for two weeks, usually released on Tuesday mornings at 9am, and available for
completion until Tuesday 9am 2 weeks later. If you have problems accessing the test email
Econ2@ed.ac.uk immediately so that the problem can be rectified. Each test will normally
comprise 10 to 20 multiple choice questions and focus on the material covered in the relevant
week, as well as occasional review questions to reinforce understanding of material covered earlier.
The tests are primarily formative in nature, i.e. they are aimed at motivating your study by
encouraging active learning and enabling you to monitor your own performance. Your performance
in the tests will contribute towards your final mark for the course. Therefore you are required to
submit answers to the online tests. An average of the 5 highest marks from your online test
results in each semester will be used to calculate your mark. Only the top 5 marks in a
semester are used to calculate the online test mark, to allow for illness, missed tests or technical
difficulties. A mark of zero is recorded for each missed test.
TUTORIAL ATTENDANCE
Attendance at tutorials is required as an integral part of the course. Tutors will keep an
attendance record. It is the responsibility of students to ensure that their names are recorded on
the attendance sheet. Students are expected to be on time for tutorials. Missing 5 tutorials in a
semester will result in a penalty of 3 marks being deducted from the final mark awarded for the
course; missing 7 tutorials in a semester will result in a penalty of 6 marks being deducted from the
final mark awarded for the course, if you fail to attend 9 tutorials your final mark for the course will
be reduced by 9 marks. In previous years students have failed the course because of
penalties incurred through tutorial absences!

It is the student’s responsibility to check that the attendance record is correct. To check your
attendance record, go to WebCT, where the course secretary will post attendance when she

receives the data from tutors. Following each week of tutorials, it is updated each Monday
morning. If you disagree with the record, you have until 4pm of the Friday following the week
of the disputed tutorial to register your disagreement. For example, if you have a tutorial on
Wednesday of week 2, the updated record will appear on WebCT on Monday morning of
week 3, and you have until 4pm on Friday of week 3 to challenge the record. This should be
by e-mail to Econ2@ed.ac.uk.
Please note that if you attend a tutorial other than your assigned one, you will be
recorded as absent. In addition the secretary will endeavour to e-mail a warning to any
students who have missed three tutorials (copied to your DOS), but due to lags inherent in
the system you should not rely on this as an infallible guide.
The allowance of four missed tutorials per semester before a penalty is incurred is to cover
all normal reasons for unavoidable absence such as illness. The only exception to this is
chronic illness or similar affecting all or most of a semester. In this case, a student must submit a
Medical Certificate or similar evidence to cover the period of absence and this will be taken into
consideration in determining whether a penalty for missed tutorials will apply.
CONTACT DETAILS
Course Organiser:
Course Secretary:
Nick Vikander (Nick.Vikander@ed.ac.uk)
Room 2.01, 21 BP
Eirlys Armstrong (Econ2@ed.ac.uk)
Room 1.01, 21 BP