Economics is a three-year major subject which may be studied for degree curricula in the Faculties of Commerce, Humanities and Science. One, or in some cases two, courses in Economics are allowed as credits for degree/diploma curricula in the Faculties of Education and Law. Post graduate studies in Economics are available through honours, masters and doctoral degrees.
Economics 1 consists of TWO one-credit courses (1 per semester):
CODE COURSE CREDIT SEMESTER OFFERED ECO 101 Microeconomics 1.00 1 ECO 102 Macroeconomics 1.00 2
Economics 2 consists of TWO one-credit course modules (1 per semester):
CODE MODULE CREDIT SEMESTER OFFERED ECO 201 Microeconomics 1.00 2 ECO 202 Macroeconomics 1.00 1
Economics 3 consists of FOUR half-credit course modules (normally two per semester) from the following list:
CODE MODULE CREDIT SEMESTER OFFERED ECO 311 Micro & Macroeconomic Theory (compulsory) 0.50 1 ECO 312 International Trade Theory & Policy 0.50 2 ECO 313 Public Finance 0.50 1 ECO 314 Economic History 0.50 2 ECO 315 Econometrics 0.50 2 ECO 316 Money, Banking & International Finance 0.50 2 ECO 317 Environmental Economics 0.50 2 ECO 318 Mathematical Economics 0.50 1 ECO 319 Any other paper approved by the Department 0.50 4 x 0.50 = 2.00
Economics 3B consists of TWO half-credit course modules (normally one per semester) from the list under Economics 3. Students registered for both Economics 3 and Economics 3B would take 6 course modules (three per semester) in total.
Due to timetabling constraints, students would not normally be able to take both ECO 314 and ECO 317.
Econometrics is strongly recommended for students planning to do honours. The department reserves the right to offer second and third year course modules in either Semester 1 or Semester 2 and to withdraw any of the third-year modules.
Course Admission prerequisite ECO 201,202 Economics 1 or ECO 101 & ECO 102 ECO 311,312,313,315, 316, 318 Economics 2 or ECO 201 & ECO 202 ECO 314,317 Economics 1 or ECO 101 & ECO 102In addition to the above admission prerequisites, students are normally only allowed to register for third- year course modules after successful completion of a total of 14 semester credits.
Economics Honours consists of a research project plus EIGHT course modules from the following:
Compulsory Course Modules CODE MODULE CREDIT SEMESTER OFFERED ECO 401 Research project 0,20 1 & 2 ECO 418 Microeconomics 0,10 2 ECO 403 Macroeconomics 0,10 1 Elective Course Modules SIX modules are selected from the following list: CODE MODULE CREDIT ECO 402 Mathematical Economics 0,10 ECO 404 Econometrics 0,10 2 ECO 405 Monetary Economics 0,10 1 ECO 406 Growth and Technology 0,10 1 ECO 407 Financial Economics 0,10 2 ECO 408 Labour Economics 0,10 1 ECO 409 Development Economics 0,10 2 ECO 410 Environmental & Resource Economics 0,10 ECO 411 Economic Development of the SA Economy in the 20th Century 0,10 ECO 412 International Finance 0,10 ECO 413 Contemporary International Trade Policy 0,10 ECO 414 Derivative, Financial Market Regulation and Efficiency 0,10 2 ECO 415 Public Finance 0,10 ECO 416 Industrial Organisation 0,10 2 ECO 417 Any other paper approved by the Department 0,10 1 x 0,20 + 8 x 0,10 = 1,00
NB Not all the above courses will be offered in any one year. Economics Honours can be taken full-time or part-time.
TWO compulsory and TWO elective modules will normally be taken per semester. Examinations are written in June and November. The research project is completed over the whole year (full-time) and over 2 years (part-time) and should be handed in by 1 October in order to be examined in November.
A student is permitted to take a paper from another department and to the maximum weight of 0,2.
Interdisciplinary Honours Degree in Development Studies.
The degree consists of FOUR papers and a long research essay from participating departments.
Master's degree by research thesis
This option is available to students wishing to pursue a clearly defined field of research and where such students have the ability to work independently.
Master's degree in Financial Markets by coursework and dissertation
This degree is aimed specifically at a specialised career in the financial/banking sector. A minimum registration of 5 students is normally required for the degree to be offered.
The normal requirement for admission is an honours degree or a four-year degree, preferably with a strong background in Economics and/or Management.
Professional experience will also be taken into account.
The course modules are structured with the above career in mind and are all compulsory. The degree consists of:
CODE MODULE CREDIT ECO 501 Dissertation 0,50 ECO 502 Financial Institutions & Regulation 0,10 ECO 503 Money Banking & Monetary Policy 0,10 ECO 504 Debt & Foreign Exchange Markets 0,10 ECO 505 Equity & Derivative Markets 0,10 ECO 506 Portfolio Theory & Management 0,10 1 x 0,50 + 5 x 0,10 = 1,00
A PhD degree may be taken by research thesis. Acceptance of the candidate will depend on previous academic record, an acceptable research proposal and the availability of expertise in the department to supervise the project.
ECO 101 - Microeconomics
Fundamental economic concepts; comparative economic systems; demand, supply and market equilibrium; elasticities of demand and supply; consumer behaviour; production and costs; price and output determination under competitive and monopolistic conditions. The South African economy, structure and development.
ECO 102 - Macroeconomics
National income accounts; index numbers; determination of national output, income and employment; money and banking; quantity theory of money; money, prices and output; unemployment; inflation; introduction to international economics.
ECO 201 - Microeconomics
The economist's view of human nature; preferences, budgets, and consumer equilibrium; income and substitution effects; the Chicago school; production, technology and costs. Fundamentals of market structure; general equilibrium and second best; asymmetric information; the South African labour market; oligopoly and oil; product differentiation (automobiles and airlines); globalisation.
ECO 202 Macroeconomics
Measurement of macroeconomic variables; classical macroeconomics; the role of aggregate demand; money, interest and income; policy effects in the IS-LM model; aggregate supply and aggregate demand; output, inflation and unemployment; the balance of payments and exchange rates; monetary and fiscal policy in the open economy; the Mundell-Fleming model; cases of imperfect and perfect capital mobility. Money and monetary policy; the role of the Central Bank; changing nature of monetary control; the budget and fiscal policy (functions of fiscal policy, expenditure issues, revenue issues, and debt and the deficit); internal balance (unemployment and inflation); external balance (the balance of payments); and the growth debate in South Africa.
ECO 311 - Micro & Macroeconomic Theory
Microeconomics: Externalities & public goods (ways of correcting market failure, externalities and property rights, common property resources & private preferences of public goods); markets with asymmetric information (quality uncertainty and market for lemons, market signalling, moral hazard, the principal-agent problem); choice under uncertainty (describing risk, preferences toward risk, reducing risk, the demand for risky assets).
Macroeconomics: Economic fluctuations (business cycle theories); consumption and investment theories; economic forecasting and stabilisation policy (forecasting, policy lags and problems); supply shocks and inflation (causes of the shocks, output-inflation trade-off, policy response); productivity, competitiveness and long-term growth (trends, factors determining competitiveness and growth, empirical evidence); policies for long-term growth and productivity.
ECO 312 - International Trade Theory & Policy
Trade theory : The classical (Ricardian) model; Neoclassical trade theory; additional trade theories and extensions based on technology, demand conditions, economies of scale and imperfect competition; economic growth and international trade.
Trade policy: The instruments of trade policy and their effects; the arguments for protection; economic integration; trade and development; South Africa's trade policy.
ECO 313 - Public Finance
Economic basis for investment activity; public versus private goods; externalities; government intervention in the market; financing of government expenditures; effect of taxation on the economy; the budget deficit; theory and structure of taxation; provincial expenditure and intergovernmental fiscal relations.
ECO 314 - Economic History
Historiography; industrialisation in historical perspective; the industrial revolution, why Europe?; change in social structures; technological change; labour and capital in historical perspective; concept of growth revisited; development and underdevelopment; imperialism; late industrialisation.
ECO 315 - Econometrics
Statistical review; simple linear regression: estimation and hypothesis testing; multiple regression: estimation, goodness of fit and hypothesis testing; functional forms of regression models : nonlinearity in variables; dummy variables; regression analysis in practice: multicollinearity, heteroscedasticity, autocorrelation, spurious regression.
ECO 316 - Money, Banking and International Finance
Money & interest rates; the demand for money; interest rate behaviour; transmission mechanism; rational expectations theory (traditional, new classical and new Keynesian models); financial instruments and markets; central banking and depository institutions; foreign exchange markets and the balance of payments accounts (monetary, portfolio balance, price adjustments approaches to the external balance); national income and current account; and macroeconomic policy in the open economy.
ECO 317 - Environmental Economics
Scope and development of environmental economics; a model of the economy and the environment; the economics of pollution; measuring economic impacts on the environment; resource economics; sustainable development; issues and applications.
ECO 318 & ECO 402 - Mathematical Economics
Analytic and mathematical models in economics; linear models; Leontief input-output analysis; optimisation - single and several variables with contraints; consumer theory; demand theory; expenditure minimisation; production theory; profit maximisation; equilibrium and its basic welfare properties; dynamical models of economic processes. Honours level includes: constrained optimisation, integration and applications.
ECO 401 - Research Project
A research project of limited scope (of not more than 15 000 words) on an approved topic in economics to be selected by 31 March, handed in by 1 October, involving either a theoretical analysis or an application of economics. Empirical work is strongly recommended. A presentation of the results is to be made at a departmental seminar. Candidates are encouraged to present a paper at an economic conference.
ECO 418 - Microeconomics
Production, information costs and economic organisation; the allocation of resources in the presence of indivisibilities; the usefulness of core theory in economics; the analytics of uncertainty and information; the causes and consequences of the dependence of quality on price.
ECO 403 - Macroeconomics
Revision of classical and Keynesian models; monetarism and supply side economics; rational expectations and new classical models; New Keynesianism, Post Keynesianism and the Z-D model; introduction to macroeconomic dynamics; contemporary issues; macroeconomic policy in South Africa.
ECO 404 - Econometrics
Dummy variables; logit, probit and tobit models; dynamic econometric models: autoregressive and distributed- lag models; time series econometrics: stationarity, unit roots, cointegration, forecasting with ARIMA and VAR models; simultaneous equation models: the identification problem; the methods of indirect least squares and two-stage least squares.
ECO 405 - Monetary Economics
The monetary sector; money and credit; monetary theory (classical, Keynesian, portfolio models & post Keynesian); the demand for money; the transmission mechanism; the money supply process; theory and application of the definition of money; monetary policy; monetary control in South Africa; monetary vs inflation targeting.
ECO 406 - Growth & Technology
Technology and macroeconomic growth models; technical change and the economic system; the sources of innovation; the new manufacturing technologies; international differences in growth and technology; national systems of innovation; foreign direct investment and multinational corporations in developing countries; technology and industrial policy: government intervention in the market; South Africa: a case study.
ECO 407 - Financial Economics
Financial markets and the economy; portfolio theory; interest rate theory; capital market theory and the valuation of assets (the capital asset pricing model and arbitrage pricing); pricing of bonds and equities; the cost of capital, corporate finance and investment; money, bond and equity markets.
ECO 408 - Labour Economics
Perspectives on labour; neoclassical fundamentals; monopoly, monopsony and the economics of information; traditional systems of industrial relations; labour and the law in South Africa; trade and labour; new workforms; global trends in flexible labour; labour and the law in the global economy.
ECO 409 - Development Economics
Meaning and measurement of development; theories of economic development: classical perspective & alternative perspectives on development (dependency theory etc); human rights; poverty; famine; entitlement and deprivation; role of the state in development; role of foreign aid; the debt crisis; structural adjustment programs; post-Washington consensus; globalisation; urban bias theory & rural development.
ECO 411 - Economic Development of the South African Economy in the 20th Century
Brief review of development theory: role of mining in development: agriculture and the dual economy: inward industrialisation and the beginnings of export led growth: parastatials and development: apartheid and the role of the state: competition policy, strategy and structure in institutional development.
ECO 414 - Derivatives, Financial Market Regulation and Efficiency
Types of futures contracts; pricing of futures and the futures market; options; pricing of options including the Black-Scholes model; the regulation of financial markets; banking supervision and financial market efficiency.
ECO 416 - Industrial Organisation
Introduction to game theory, oligopoly and bargaining; bounded rationality and private information; moral hazard and performance incentives; risk sharing and incentive contracts, rents and efficiency, ownership and property rights.
ECO 502 - Financial Institutions & Regulation
The financial system and its institutions and markets, comprising of three groups of financial institutions, ie financial intermediaries, quasi-financial intermediaries, and the financial institutions that act in a supporting capacity, such as the financial exchanges. The financial intermediaries in South Africa are wide-ranging, from mature central banking and urbane private sector banking to institutions that aim to satisfy the financial needs of the less sophisticated segment of the population. No financial system is able to function well without proper standards and supervision of performance. South Africa enjoys a standard of supervision of financial institutions that compares well with the western world. The two main regulators are the South African Reserve Bank (banks) and the Financial Services Board (other financial intermediaries and financial markets). All aspects of financial market regulation are covered.
ECO 503 - Money, Banking & Monetary Policy
Central bank functions, such as the sole issuer of bank notes and custodian of the foreign exchange reserves of the country. Dynamic functions, the relationship between the central bank, government and the private sector. Private sector banking, registered branches and representative offices. Banking products and services, in comparison to the rest of the world, and new developments, such as securitisation. The development of the South African Reserve Bank, monetary regimes in South Africa. The present one follows an inflation targeting approach. Monetary policy is explored in great detail, including the mechanics of the refinancing system.
ECO 504 - Debt and Foreign Exchange Markets
The mathematics of the financial markets centres on the time value of money. The more challenging mathematics of bonds, where interest is paid 6-monthly in arrears and the capital (which may have been discounted at the start of the period) at the end of the period.
The money market and its functions and developments, its influence on interest rates and the role of the central bank. The relationship between money market rates and other interest rates. The bond market is an extension of the money market, ie it is the longer end of the debt market (which extends up to 25 years). Now that a debt ratings culture is developing in South Africa, certain members of the corporate sector are starting to enter this market. South Africa has of the most liquid debt markets in the world.
Essentials of the foreign exchange market, exchange rate theory and determinants, as well as exchange rate policy in South Africa. Many foreign entities are involved in the local financial markets and require the ability to enter and exit on demand. Importers and exporters require sophisticated services, including foreign exchange hedging tools.
ECO 505 - Equity and Derivative Markets
Mechanics of and developments in the equity (or share) market. Pricing of shares, dealer mechanisms, the securities exchange and its role as manager of the market.
The financial derivatives market is the market in which financial exposures may be hedged, and in which speculators are able to take risk (in the process adding to the liquidity of the market). Types of derivatives, their market characteristics and developments, pricing techniques.
A natural development to follow from the maturity of the financial derivatives market was the creation of derivatives for agricultural products. The largest agricultural markets are the maize and wheat markets, and derivatives for these and other markets were introduced in the middle-nineties.
ECO 506 - Portfolio Theory & Management
Financial markets operate in environments, the most significant of which is the economic environment. A constant awareness and analysis of the ever-changing economic environment is required for any person involved in the financial markets. The economic situation is examined throughout the masters degree course.
Portfolio management is about managing a diverse portfolio in an ever-changing environment. The portfolio manager is required to make decisions on the structure of a portfolio, ie what markets (asset classes) to invest in (or change the weight in) and what securities within asset classes to buy or sell. Essentially, portfolio is about risk and the management of risk.
For more information, see the departmental website: http://www.ru.ac.za/academic/departments/economics/