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University of Wisconsin–Madison </wisconsin>


  Markets with Frictions


      Randall Wright

This course explores markets with frictions. The goal is to sharpen our
economic reasoning, add a few twists that you are unlikely to have seen
in other courses, and apply the methods to interesting phenomena. This
should improve the way you think analytically about the economy, and
help address interesting issues that come up in the real world.

Workload:4-6 hours/week
Watch intro video
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    About the Course

The classical economic theory of markets cannot account for some
important issues, such as the coexistence of unemployment and vacancies;
credit market rationing; or bubbles in asset prices. This course will
explore markets with frictions, shedding light on these issues and other
fundamental questions such as: What is a bank, and why do we use money?


    Recommended Background

Students should at some point have taken intermediate to advanced
undergraduate courses in economics (intermediate microeconomics) and
have minimal proficiency in algebra and calculus.


    In-course Textbooks

As a student enrolled in this course, you will have free access to
selected chapters and content for the duration of the course. All
chapters were selected by the instructor specifically for this course.
You will be able to access the Coursera edition of the e-textbook via an
e-reader in the class site hosted by Chegg. If you click on “Buy this
book”, you will be able to purchase the full version of the textbook,
rather than the limited chapter selection in the Coursera edition. This
initiative is made possible by Coursera’s collaboration with textbook
publishers and Chegg.


    Suggested Readings

The following readings and books are listed as resources for those who
are interested in learning more outside of the class space.*
*

*You do NOT have to purchase these books or readings to participate in
this course.
*

*Undergraduate Level Books*

  * Pissarides, C. A. (2000). Equilibrium unemployment theory. 2nd ed.
    Cambridge, Mass.: MIT Press.
  * Varian, H. R. (2010). Intermediate microeconomics : a modern
    approach. 8th ed. New York: W.W. Norton & Co.
  * Williamson, S. D. (2011). Macroeconomics. 4th ed. Boston:
    Addison-Wesley.

*Graduate Level Readings* *and Books*

  * Mortensen, D. T., & Pissarides, C. A. (1999). Job reallocation,
    employment fluctuations and unemployment. Handbook of macroeconomics
    <http://www.sciencedirect.com/science/article/pii/S1574004899100260#>,
    1, 1171-1228.
  * Nosal, E., & Rocheteau, G. (2012). Money, payments, and liquidity.
    Cambridge, MA: MIT Press.
  * Rogerson, R., Shimer, R., & Wright, R. (2005).Search-Theoretic
    Models of the Labor Market: A Survey. Journal of Economic Literature
    <http://pubs.aeaweb.org/doi/pdfplus/10.1257/002205105775362014>, 43,
    959-988.
  * Williamson, S., & Wright, R. (2010). New monetarist economics:
    Models. Handbook of Monetary Economics
    <http://www.artsci.wustl.edu/~swilliam/papers/ww-ii-feb-28.pdf>, 3,
    25-96.


    FAQ

*What is a Friction?*

A “Friction” is a restriction imposed by nature that may make it
difficult to achieve good outcomes.

Frictions can take a lot of different forms.  For example, it takes time
to meet a life partner. Consider a dating website – this is an online
institution that helps you meet others. This institution helps mitigate
the friction of finding a compatible mate.  They expedite your ability
to meet individuals.
In a market, there are many different kinds of frictions.  As we go
through this course, Professor Wright will examine different examples of
frictions and the institutions that help mitigate frictions.

*How much math is involved in this course?*
Most of the math you will be doing will be found in the homework
assignments.  The recommended math background is listed above.

*I have little business experience. Will this course be worthwhile to me?*
We discuss banking, credit and households.  The content covered in this
course can be generally applied with respect to ones life.  However,
many of the examples that Professor Wright uses are related to business
in an economic setting.

*Will this course address investment strategies in the stock market?*
No, this course will not address investment strategies in the stock market.

Students will receive a Statement of Accomplishment after completing
this class.


Enroll for Free


    About the Instructor

<https://www.coursera.org/instructor/randallwright>
Randall Wright
<https://www.coursera.org/instructor/randallwright>University of
Wisconsin–Madison </wisconsin>


    Course Details

Taught In: English
Subtitles Available In: English
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