ECONOMICS TRIPOS

Amended by Notice (Reporter, 2007–08, p. 400)

1. The Economics Tripos shall consist of three Parts: Part I, Part IIa, and Part IIb. A separate class-list shall be published for each Part.

2. The scheme of the examination for Part I of the Tripos shall be that defined in Regulations 14 and 15 and for Part IIa of the Tripos that defined in Regulations 16–18 and for Part IIb of the Tripos that defined in Regulations 19–25.

3. The Faculty Board of Economics shall have power to make from time to time supplementary regulations further defining all or any of the subjects of the examination and regulations determining the credit that shall be assigned to such subjects respectively and marking out the lines of study that are to be pursued by the candidates, and to publish lists of books recommended to the candidates and to modify or alter any such supplementary regulations or lists as occasion may require. Sufficient notice of any such modifications or alterations shall be given to avoid hardship to candidates. The Faculty Board shall summon every year a conference of Lecturers on the subjects included in the Tripos, at which these supplementary regulations and lists shall be considered and suggestions for their revision received.

4. A student may be a candidate for honours in Part I if at the time of the examination he or she has kept one term, provided that three complete terms have not passed after his or her first term of residence.

5. The following may present themselves as candidates for honours in Part IIa, if they have kept four terms:

1. (a)a student who has obtained honours in Part I of the Economics Tripos and has not subsequently obtained honours in any other Honours Examination, provided that six complete terms have not passed after his or her first term of residence;46
2. (b)a student who has obtained honours in any other Honours Examination, in the year after so obtaining honours, provided that nine complete terms have not passed after his or her first term of residence.

A student who, under arrangements approved by the Faculty Board, has spent not less than three terms studying at the Massachusetts Institute of Technology and has been certified by the President of the Institute after consultation with the Chairman of Examiners for Part IIa of the Economics Tripos to have studied diligently during that period, shall be deemed thereby to have obtained honours in that Part of the Tripos. A list containing the names of persons so qualified shall be certified by the Chairman of the Faculty Board and published in the Reporter.

6. A student who has obtained honours in any other Honours Examination other than Part I of the Economics Tripos or has been deemed to have obtained Honours in Part IIa of the Economics Tripos under Regulation 5 may be a candidate for honours in Part IIb in the year after so obtaining honours, provided that the student has kept seven terms and that twelve complete terms have not passed after his or her first term of residence.46

7. No student shall be a candidate for more than one Part, or for any Part and also for another Honours Examination, in the same term.

8. No student who has been a candidate for any Part shall again be a candidate for the same Part.

9. A candidate shall not offer in any Part of the Tripos a paper that he or she has previously offered in another University examination.

10. In each Part the names of the students who obtain honours shall be arranged in three classes, of which the second shall be divided into two divisions. The names in the first and third classes and in each division of the second class shall be arranged in alphabetical order.

11. The Faculty Board shall nominate such number of Examiners as they may deem sufficient for each Part of the Tripos.

12. The Faculty Board shall have power to nominate one or more Assessors to assist the Examiners in any Part of the Tripos. Assessors shall be responsible for setting the paper or papers in the subject or subjects assigned to them, and for looking over the work of the candidates therein, and shall present a written report to the Examiners. Assessors shall have a right to attend the meetings of the Examiners, but shall not have a vote in determining the class-list.

13. In each Part the questions proposed by the Examiners or Assessors shall be submitted to and approved by the Examiners for that Part collectively.

Part I

14. The scheme of examination for Part I of the Tripos shall be as follows:

Each paper shall be of three hours’ duration, except Paper 3. The examination for Paper 3 shall consist of a written paper of three hours’ duration and the submission of project work undertaken by the candidate; details of the project work required and the arrangements for its submission shall be prescribed from time to time by the Faculty Board.

15. In Part I every candidate shall offer all the papers specified in Regulation 14.

Part IIa

16. The scheme of examination for Part IIa of the Tripos shall be as follows:

Each paper shall be set for three hours. The examination for Paper 3 shall consist of a written paper of three hours’ duration and the submission of project work undertaken by the candidate; details of the project work required and the arrangements for its submission shall be prescribed from time to time by the Faculty Board.

17. A candidate for Part IIa shall offer

1.  (a)Papers 1, 2, and 3
2. and(b)one or two papers chosen from among Papers 4–7.

18. If under Regulation 17(b) a candidate offers two papers, the paper of these two on which the Examiners judge the candidate's performance to be least good shall be taken into account only if that would be to the candidate's advantage.

Part IIb

19. The scheme of the examination for Part IIb of the Tripos shall be as follows:

Each paper shall be of three hours’ duration, except Paper 10. The examination for Paper 10 shall consist of a written paper of three hours’ duration and the submission of an account of a project undertaken by the candidate; the work to be undertaken for the project, and the arrangements for the submission of the report, shall be prescribed from time to time by the Faculty Board.

20. Except as provided in Regulation 22 a candidate for Part IIb shall offer

1.  (a)Papers 1 and 2
2. and(b)two or three papers chosen from among Papers 3–17, provided that a candidate must offer at least one paper chosen from Papers 3–15;
3. and(c)a dissertation, submitted in accordance with the provisions of Regulation 25, within the field of any one of Papers 1–4, 6–9, 12–15, or within a field from among other fields which the Faculty Board shall specify from time to time.

21. If under Regulation 20(b) a candidate offers three papers, the paper of these three on which the Examiners judge the candidate's performance to be least good shall be taken into account only if that would be to the candidate's advantage, provided that at least one of Papers 3–15 shall always be taken into account.

22. A candidate who takes the examination in the year next after obtaining honours in any Tripos examination other than Part IIa of the Economics Tripos shall offer Papers 1 and 2 and not less than two nor more than three papers chosen from among Papers 3–17, provided that a candidate must offer at least one paper chosen from Papers 3–15. If a candidate offers three such papers, that paper from among the three in which the Examiners judge the candidate's work to be least good shall be taken into account only if that would be to the candidate's advantage, provided that at least one of Papers 3–15 shall always be taken into account.

23. For Papers 12, 13, and 15 the Faculty Board shall announce by the division of the Lent Term of the year preceding the examination a total of not more than three subjects for each paper. In any case where the Faculty Board announce more than one such subject for a paper, a candidate may offer not more than one of the subjects announced. For Paper 17 a candidate may not offer more than one of the subjects specified in the supplementary regulations for this paper.

24. Some choice of questions shall be allowed in all papers.

25. (a) A candidate for Part IIb under Regulation 20 shall submit an application to the Secretary of the Faculty Board, specifying the proposed topic of the dissertation, and the paper or field within which it falls. Applications shall be considered by the Examiners; the approval or rejection of a candidate's proposed topic shall be communicated to the candidate. A candidate whose proposed topic is rejected may submit a revised application.

(b) When a candidate's proposed topic has been approved by the Examiners, no change shall be made in it, except that a candidate may subsequently apply for permission to revise the topic.

(c) The timetable for the submission and the approval of applications under sub-paragraphs (a) and (b) shall be announced by the Faculty Board not later than the end of the Michaelmas Term. All applications shall be submitted in accordance with detailed instructions issued by the Board.

(d) A dissertation shall be in English, and shall be of not less than 6,000 words and not more than 7,500 words in length,50 including notes and appendices but excluding bibliography. Candidates will be required to give full references to sources used.

(e) Two copies of the dissertation, in typewritten or computer-printed form, shall be submitted, in accordance with detailed arrangements approved by the Faculty Board, so as to reach the Secretary of the Faculty Board not later than the first day of the Full Easter Term in which the examination is to be held. Together with the dissertation each candidate shall submit

1. (i)two copies of a brief synopsis of the contents of the dissertation, and
2. (ii)a declaration signed by the candidate that the dissertation is his or her own work, unaided except as may be specified in the declaration, that it does not contain material which has already been used to any substantial extent for a comparable purpose, and that it does not exceed the maximum permitted length.

(f) The Examiners shall have power to examine a candidate viva voce on the subject of his or her dissertation.

SUPPLEMENTARY REGULATIONS

Part I

Papers 1 and 2

Both papers will emphasize theoretical issues (some questions may also be set which require knowledge of the history of economic thought).

Paper 1. Microeconomics

This paper will deal with the following: the theory of the consumer: choice and demand; the theory of the producer; costs and supply; supply, demand, and market equilibrium; partial and general equilibrium analysis; demand and supply in factor markets; market equilibrium under various forms of industrial structure; market failure and the role of the state; elementary game theory and bargaining.

Paper 2. Macroeconomics

The paper will provide an introduction to the following topics. National income accounting. Classical theory of output and employment. Elementary neoclassical growth theory. Quantity theory of money. Economic fluctuations and short-run equilibrium. Interaction between goods and financial markets: the IS-LM model; Simple open economy macroeconomics; Aggregate supply and the labour market; Stabilization policy.

Paper 3. Quantitative methods in economics

This paper will cover the application of simple statistical and mathematical techniques to a range of problems in economics. The written examination for the paper will be set in four sections, and will carry 80% of the total mark for the paper. The remaining 20% of the total mark will be accounted for by the submission of an essay on a topic in applied economics in accordance with Regulation 14.

Candidates are required to answer questions from all four sections of the written paper: the marks attached to each section, and the number of questions to be answered, will be shown on the question paper. Sections A and B of the paper will comprise a number of questions on mathematical techniques, and the application of these techniques to simple problems in economic theory. Section A will contain a number of short questions from which candidates are required to answer four. Section B will contain a number of longer questions, from which candidates are required to answer one question. Sections C and D of the paper will deal with the manner in which statistics contributes to the study of economic problems and to the discussion of issues of public policy. The questions in these sections will test candidates’ ability to perform relatively simple statistical derivations, to analyse problems in applied economics, and their knowledge of statistical sources. Section C will contain a number of short questions: candidates are required to answer four of these. Section D will contain a number of longer questions, from which candidates are required to answer one question. Statistical tables, and a list of the most important statistical formulae, will be provided.

A detailed schedule of the specific mathematical and statistical techniques covered in this paper will be published by the Faculty Board not later than the start of the Michaelmas Term of the academical year in which the examination is to be held.

Paper 4. Political and sociological aspects of economics

This paper considers the influence of political and sociological factors on economic affairs. It focuses on the history of economic and social policy-making in the post-war period in Britain and other developed and developing countries. It examines a variety of influences on policy: the political ideologies which inform the conduct of policy; the domestic and international institutions that provide the context within which policy is formed; and the broader social and economic processes that shape the environment in which economic policy is conducted. The paper examines the processes by which policies come to be formulated and the way in which trade unions, employers’ organizations, the City, political parties, the electoral process, and the bureaucracy of the state influence decision-making processes.

Paper 5. British economic history

This paper will be concerned with three main themes in the industrial development of Britain between 1750 and 1939: the industrial revolution, problems of growth and trade in the mature economy up to 1914, and the inter-war years; it will also cover some of the demographic and social changes associated with this industrial development. The specific topics which will be covered in the course of the analysis of the main themes include the long-run growth of output, productivity, and the standard of living; the costs of growth; demographic changes; capital accumulation and technical progress; entrepreneurship; foreign trade, the export of capital, and the role of the Empire; changes in the industrial structure; the labour market; government economic policies.

Part IIa

Papers 1 and 2. Microeconomics and Macroeconomics

These papers are concerned with the theoretical groundwork of the topics covered in Papers 1 and 2 of Part I of the Economics Tripos, with emphasis on tools of analysis and their use.

The Examiners shall set a number of questions which require the candidates to manipulate a simple mathematical model of some aspect of economic behaviour, and to provide an economic interpretation of such a model. A number of such questions may be set in a single paper. The level and range of mathematical techniques required shall not be higher than that required in Paper 3 of Part I of the Economics Tripos. The questions will be designed to test candidates’ economic insight as well as their mathematical skills.

Paper 3. Theory and practice of econometrics I

This paper deals with the manner in which statistics contributes to the study of economic and social problems and to the discussion of issues of public policy. Its main purpose is to test candidates’ understanding of the intuition and concepts which underlie elementary statistical techniques, and their ability to analyse problems in applied economics, by bringing to bear on them relevant economic theory, knowledge of statistical sources, and relatively simple statistical derivations. A detailed schedule of the specific statistical techniques covered in this paper will be published by the Faculty Board not later than the start of the Michaelmas Term of the academic year in which the examination is to be held.

The examination for Paper 3 will consist of two components, as follows:

1. (a)A three-hour written paper which tests candidates’ understanding of the logic of the methods covered in the course.
2. (b)Project work, involving use of the Faculty's computing facilities, on topics chosen by the candidate from a list of topics specified by the Examiners. Candidates will be required to select one topic, involving the application of data sources and statistical methods to economic problems.

The written paper will carry 60% of the weight for the examination as a whole, and the project 40%.

Paper 4. Economic development

This paper provides an introduction to the main analytical issues in development economics through examining the relevant economic principles and the comparative development experience of selected countries. It does not assume any prior knowledge of development economics. It provides useful preparation for candidates proposing to take Part IIb specialist options in development economics or economic history, but also constitutes a self-contained one-year course for those interested in studying this field, but not necessarily planning to continue with it further.

The analytical issues to be covered include: models of economic growth; human capital investment (both health and education) and population growth; physical capital investment; learning and technological change; factor market failures and the role of government policy; inequality and its effects on growth; agriculture and industrial sectors in economic development; dualism and labour surplus models; financial markets and financial policy; the role of trade and trade policies; political economy issues in economic development. These issues are covered both theoretically and empirically through applications to the historical development experience of selected countries.

The examination will contain two sections. Section I will consist of purely analytical questions. Section II will require candidates to relate their analysis of theoretical issues to comparative historical evidence from countries to be announced by the Faculty Board at the beginning of the Michaelmas Term of the academical year in which the examination is to be held. Candidates will be required to answer one question from Section I and two questions from Section II.

Paper 5. Modern societies (Paper 2 of Part I of the Social and Political Sciences Tripos51)

Paper 6. Mathematics for economists and statisticians

This paper deals with those portions of linear algebra, differential and integral calculus, differential and difference equations, probability theory, and statistics which are the principal mathematical groundwork of the subjects covered in Papers 5 and 11 of Part IIb of the Economics Tripos.

Paper 7. Labour

The paper has the following subject matter: the setting of pay and employment (levels and structures), as dependent on employer demand and household supply; theories of human capital, internal markets, informational failure, mobility, industrial conflict, discrimination, and collective organization and activity; current issues in industrial relations and the management of the employment relationship; gender issues in, and public policies towards, the labour market. Candidates will be expected to know the main empirical characteristics of the British labour market, and some comparative attributes of other advanced economies, as well as to draw selectively on contributions from sociology and political science.

Part IIb

Papers 1 and 2. Economic principles and problems

These papers will deal with the scope and method of economics, with fundamental ideas, and with the application of the methods of economic analysis to economic problems. The papers will be designed to afford scope for the exercise of analytical power in abstract reasoning and in interpreting economic data. A few questions of a more advanced analytical character may be set, but the papers as a whole will be so framed as to be within the competence of those who have not made a study of advanced methods of analysis. A main object will be to test the power of candidates to apply their theoretical reasoning to actual problems. Candidates will, therefore, be expected to show a general knowledge and understanding of the role of the Government in economic affairs and of the working and effects of the principal economic institutions in the fields of production and distribution, of money and banking, of international economics, of employment, labour, and wage determination. Knowledge of the British economy is a basic requirement. Candidates should be able to analyse British problems in their international setting. Some questions will be asked about international economic problems and institutions, and about the problems of different types of economy. The questions set will not require such detailed knowledge as may be appropriate in Papers 3–9, but an understanding of general principles.

Paper 3. A subject in economics

This paper will not be set until further notice.

Paper 4. Economic theory and analysis

In this paper questions will be set of a more advanced character than in Papers 1 and 2, and the emphasis will rest on the theoretical aspects of economics. The paper will provide opportunity for the use of analytical methods including mathematics.

Paper 5. Mathematical economics52

Paper 6. Banking, money, and finance

This paper provides an introduction to advanced topics regarding the economic functions of money, credit, banking, financial asset markets, and monetary policy.

The topics to be covered in the paper will include: portfolio theory; valuation of financial assets and options; coordination of monetary and fiscal policy; bank risk management and regulation; and the design and transmission of monetary policy. Questions for this paper will assume knowledge of analytical models, relevant empirical evidence, and recent significant events regarding banking, financial markets, and monetary policy in developed and emerging economies.

Paper 7. Public economics

This paper will have the following subject matter: Public goods; externalities and environmental policy; preference revelation mechanisms; optimal tax and benefit systems; effects of taxation on behaviour; social security; normative and positive theories of the state; political decision-making and political economics; public expenditure and tax systems in practice. The paper will require knowledge of the relevant theories and institutions.

Paper 8. The economics of under-developed countries

This paper will deal with the problems of economic growth and development in developing countries. It will provide a framework to understand how developing countries display common failures of information and legal structures and how this in turn affects their institutional and economic development. It will also demonstrate how the standard analytical tools of micro-economics and macro-economics can be used to understand key economic problems in less developed countries.

Candidates will be expected to show familiarity with the theoretical issues involved and be able to apply their knowledge to the experience of a number of developing countries. They will also be expected to have a basic knowledge of econometric techniques (at the level of Paper 3 in Part IIa of the Tripos), and to be able to use this to assess the empirical evidence on development.

Paper 9. Industry

This paper will have the following subject matter: The modern business enterprise: its internal organization and functioning and their implications for its economic performance; competition, selection, and external constraints on corporate behaviour; law and the corporation; alternative theories of the firm; financial systems, capital structure, and corporate financial choices; multinational corporations; the market for corporate control. The evolution of firms, markets, and industries; standard models of imperfect competition, strategic behaviour; the relationship between industrial structure, behaviour, and performance; information technology and networks; technical change. Deindustrialization and structural changes in UK industry; issues of competition and industrial policies in the context of the international economy.

The Faculty Board will publish a list of prescribed readings for this paper at the beginning of the Michaelmas Term of the academic year in which the examination will be held. Students will be expected to be familiar with these readings, and to develop an understanding of the relevant literature which lies beyond them. The examination for this paper will be set in two sections. Section A will contain not less than three questions which relate closely to the topics covered in the prescribed readings, while Section B will contain not less than eight questions on more general topics associated with the subject matter of the paper. Candidates will be required to answer one question from Section A, and three questions from Section B.

Paper 10. Theory and practice of econometrics II

This paper will deal with ways in which statistical data and methods can assist in the study of economic and social problems. It will not require the use of advanced mathematical methods.

The examination for this paper consists of a written paper of three hours’ duration and the submission of an account of a project undertaken by the candidate. The written paper and the account of the project will carry equal weight. In the written paper candidates will be required to answer a number of questions relating to statistical methods and sources and their applications and to show knowledge in each of these areas. Statistical tables will be provided.

The project to be undertaken by the candidate shall be chosen from a list of topics specified by the Examiners. The topics will be announced not less than two weeks before the last day of Full Lent Term. Candidates will be required to submit an account of the project, in the form of an extended essay by a date not later than one week after the first day of Full Easter Term. This account, which must be in English, should not exceed 4,000 words in length (inclusive of notes and appendices).53 It should report the statistical sources and techniques used by the candidate as well as presenting the candidate's results and conclusions. Candidates are expected to show familiarity with a range of statistical techniques which are widely used for the analysis of economic data and to be able to select the appropriate techniques and data for the analysis of the topic which they have selected.

Candidates will be expected to show knowledge of a specified range of statistical techniques, in addition to those prescribed for Paper 3 in Part I of the Economics Tripos and Paper 3 in Part IIa of that Tripos. A detailed schedule of the techniques which are required for this paper will be published by the Faculty Board not later than the start of the Michaelmas Term of the academic year in which the examination is to be held. Candidates will also be expected to show familiarity with major econometric studies in areas to be decided by the Faculty Board from time to time, and with the most important statistical and economic problems involved in the analysis of economic issues in these areas.

Until further notice the areas will include:

1. (i)Consumer behaviour;
2. (ii)Investment behaviour;
3. (iii)UK imports and exports;
4. (iv)Wages, prices, and unemployment;
5. (v)Macroeconomic dynamics;
6. (vi)Macroeconometric models of the UK economy;
7. (vii)Labour supply models;
8. (viii)Static panel data models;
9. (ix)Discrete choice models in econometrics.

Not more than six of these areas will be covered each year. At the beginning of the Michaelmas Term each year the Faculty Board will announce the areas to be covered in that year and will issue a list of references associated with each area.

Paper 11. Time series and financial econometrics

This course is designed to give students a good grounding in econometric theory, particularly as it relates to time series. Proofs and derivations will play a more important role than in Paper 10. Candidates will be expected to show a good understanding of both the statistical theory and the way in which the methods can be used in economics and finance.

Questions may be posed on regression, estimation procedures such as maximum likelihood and generalized methods of moments, test statistics, model selection, simultaneous equations, limited dependent variables, the properties of time series models and the way in which they are fitted and selected, dynamic models and cointegration. Financial topics may include predictability of asset returns, volatility, portfolio analysis, CAPM model, factor model and options.

The use of calculators and statistical tables is permitted in the examination. The paper will be divided into two sections, one consisting of short questions, all of which should be attempted, and one consisting of longer questions, of which two should be attempted.

Paper 12. A subject in economics

Paper 13. A subject in economics

These papers will not be set until further notice.

Paper 14. A subject in economic history

This paper will, until further notice, be a paper entitled ‘World Depression in the interwar years’. Its main focus will be on the causes and courses of the Great Depression of the 1930s, but the events of the 1920s including the inflation and deflation of 1919–21 will also receive attention. Topics covered will include the transfer problem and international monetary arrangements, the growth of protection and the development of trading blocs, monopolistic tendencies and changes in income distribution, technology and structural changes, the agrarian depression, and the comparative experience of different countries with regard to unemployment, especially following the trough of the cycle.

The main countries considered will be Britain, France, Germany, the USA, and Japan, but the paper will not be exclusively confined to these, and, in particular, the experience of some of the main primary producing countries will also be studied.

Paper 15. A subject in economic history

This paper will not be set until further notice.

Paper 16. A subject in sociology II (Paper Soc. 5 of the Social and Political Sciences Tripos in any year that the subject of that paper is ‘Modern Britain’)

Candidates for this paper who are taking the Economics Tripos shall be examined by written examination.

Paper 17. A subject in the field of sociology and politics

Until further notice the subjects specified for this paper, from which candidates are required to select one, will be

1. (a)An interdisciplinary subject III (Paper Int. 5 of the Social and Political Sciences Tripos),
2. (b)The sociology and politics of South Asia (the subject specified for Paper Sa. 27 of Part II of the Oriental Studies Tripos),
3. (c)Society, politics, and culture in Latin America (Paper Int. 7 of the Social and Political Sciences Tripos),
4. (d)A subject in sociology IV (Paper Soc. 7 of the Social and Political Sciences Tripos in any year that the subject of that paper is ‘The political economy of capitalism’).