Institutional Economics

2018/2019

Academic Year

ENG

Instruction in English

3

ECTS credits

Author

Verbus, Valery A.

Delivered at:

Department of Economic Theory and Econometrics (Faculty of Economics)

Course type:

Elective course

When:

3 year, 3 module

Instructor

Verbus, Valery A.

Course Syllabus

Abstract

The course explores the basics of institutional economics. The economic and mathematical aspects of institutional models of economics for the level of micro – and macro-economics are considered in this course. In this course will be payed attention to the questions of application of the studied theoretical models and methods for the decision of the applied tasks for business and state administration.

Learning Objectives

• The objectives of discipline "Institutional Economics" are mastering the basics of economic theory, the acquisition of skills in the use of its conceptual apparatus of the construction of various economic models that describe the dynamics of socio-economic systems and forecasting the development of the economy.

Expected Learning Outcomes

• Knows the theoretical foundations of institutional economics and the history of its origin and development
• Uses the principles of institutional analysis to explain the economic choice of economic entities and to solve applied problems
• Applies the necessary methods of institutional analysis to analyze specific events of economic life
• Analyzes economic phenomena at the micro and macro level, taking into account their institutional structure

Course Contents

• Institutions Theory
  Norm and rule. The main functions of the rules: ensuring coordination, cooperation, distribution. The genesis of rules: evolutionary formation and directive introduction "from above". Formal and informal rules. The hierarchy of formal rules (D. North). Institute as a unit of analysis. The concept of the institute. The role of institutions in the functioning of the economic system. Functions of Institutions. Institutions as substitutes and compliments of the market. The value of institutions. Coordination and distribution functions of institutions. Formal and informal, external and internal institutions
• Theory of Property Rights
  Ownership. Different approaches to determining ownership. Anglo-Saxon and continental traditions. Specification and erosion of property rights.
• Transaction cost theory
  The concept of transaction. Transactions, management and rationing. Transaction parameters (frequency, uncertainty, specificity of assets) and contract management. Fundamental transformation: the essence of the phenomenon and the factors of occurrence (opportunism, the recurring nature of the interaction, the presence of investments in specific assets. Approaches to determining transaction costs.
• External effects and Coase's theorem
  The concept of external effects. Classifications of external effects. Alternative methods of internalizing external effects. Property rights and the problem of internalization of external effects. Coase's theorem. Institutional aspects of Coase's theorem, conditions for its applicability.

Assessment Elements

• Exam
• Test
• Seminar work

Interim Assessment

• Interim assessment (3 module)
  0.4 * Exam + 0.24 * Seminar work + 0.36 * Test

Bibliography

Recommended Core Bibliography

• Elodie Douarin, Tomasz Mickiewicz, (2017) Economics of Institutional Change, Springer, [Электронный ресурс]: Режим доступа: https://link.springer.com/book/10.1007/978-0-230-29128-7-Загл. с экрана

Recommended Additional Bibliography

• Martin Kolmar (2017) , Principles of Microeconomics, An Integrative Approach, Springer, [Электронный ресурс]: Режим доступа: https://link.springer.com/book/10.1007/978-3-319-57589-6 -Загл. с экрана