1

UNIVERSITY OF CANTERBURY

DEPARTMENT OF ECONOMICS AND FINANCE

UNDERGRADUATE AND
POSTGRADUATE COURSES 2013

(1
st
Edition)

First year 8
Second Year - Economics 9
Second Year - Finance 9
Third year - Economics 10
Third year – Finance 10
Economics Pathways for different types of student 12
Finance Pathways for different types of student 13
Pathway for students interested in Macroeconomics and Monetary Economics 14
An LLB and an Honours degree in Economics in five years. 15
Economics options in the Bachelor of Arts (B.A.) 15
The Economics Honours Programme 17
Where did the 2011 Honours Graduates go? 18
The Graduate Diploma in Economics 18
Master of Commerce or Master of Arts in Economics 18
The Postgraduate Diploma in Economics 19
The Finance Honours Programme 19
The Graduate Diploma in Science 19
Master of Commerce in Finance 20
The quality of the Honours programme 20
SOME COMMONLY ASKED QUESTIONS 21
Do I need to have studied Economics or Finance before? 21
What should I study at secondary school? 21
What Mathematics and Statistics do I need? 21
I have studied economics at school, can I go directly into 2nd year classes? 21
What level of English language do I need? 22
What is the difference between ECON 202/203 and 207/208? 22
In what circumstances can prerequisites be waived? 23
Do any courses have limitation of entry? 24
Should I do a BA, BCom or a BSc? 24
What can I combine economics and/or finance with? 24

ECON 332-S2 ECONOMICS AND PSYCHOLOGY 51
ECON 333-S2 EXPERIMENTAL ECONOMICS 52
ECON 336-S2 PUBLIC CHOICE 53
ECON 337-S1 ECONOMIC EVALUATION IN HEALTH 54
ECON 340-S1 DEVELOPMENT ECONOMICS 55
ECON 341-S2 ECONOMICS OF EDUCATION 56
ECON 342-S2 ECONOMIC HISTORY 57
ECON 344-S2 INTERNATIONAL FINANCE 58
ECON 345-S1 ECONOMICS OF RISK AND INSURANCE 59
FINC 301-S1 CORPORATE FINANCE THEORY AND POLICY 60
FINC 302-S1 APPLIED CORPORATE FINANCE 61
FINC 305-S2 FINANCIAL MODELLING 62
FINC 311-S1 INVESTMENTS 63
FINC 312-S2 DERIVATIVE SECURITIES 64
FINC 316-S1 FIXED INCOME SECURITIES 65
FINC 331-S2 FINANCIAL ECONOMICS 66
FINC 344-S2 INTERNATIONAL FINANCE 67
FINC 345-S1 ECONOMICS OF RISK AND INSURANCE 67
POSTGRADUATE COURSES 68
ECON 603-S1 MICROECONOMICS I 68
ECON 605-S1 MACROECONOMICS I 68
ECON 641-S2 MONETARY ECONOMICS: THEORY 69
ECON 642-S1 MONETARY ECONOMICS: POLICY 69
ECON 643-S2 INTERNATIONAL FINANCE 70
ECON 653-S2 PUBLIC ECONOMICS 71
ECON 655-S2 ENVIRONMENTAL ECONOMICS 72
ECON 663-S2 ECONOMETRICS I-600 73
ECON 664-S1 ECONOMETRICS II-600 73
ECON 665-S1 WELFARE ECONOMICS 74
ECON 667-S2 BEHAVIOURAL ECONOMICS 75

comprising two subject areas and teaching into three undergraduate degrees.

Economics and Finance are united in a single Department with the two subjects
retaining their distinct nature and value. Economics courses are labelled ECON and
Finance courses FINC. Students can choose to major in either subject alone or to
follow a coherent combined path of study. Some of the Department’s 300-level courses
are double coded across the two subjects to reflect this approach.

Economics and Finance combine well with most other subjects, which is reflected in
the fact that Economics is a major in the B.A., B.Com. and B.Sc. degrees, and Finance
is a major in the both the B.Com and the B.Sc. Students in the B.A. can major or
minor in Economics with a number of courses aimed at the interests of these students.

We value diversity in our student body and strongly encourage students to take courses
from across the University.

The lecturers in our Department are passionate about what our subjects have to offer
and are passionate about the teaching programme. We are always happy to help
students plan their degrees.

Work hard and enjoy your studies.

Prof. Bob Reed
Head of Department

Christchurch 8041
New Zealand

Telephone: +64 3 364 2631
Where do I get help with course advice?
Economics
Undergraduate enquiries:

Postgraduate enquiries:

Finance
Undergraduate enquiries:

Postgraduate enquiries:
or Or contact the Student Advisors:
See /> for how to contact
the student advisors.

This booklet is designed to give a brief introduction to the Department of Economics
and Finance. Details are correct at time of printing but may change over time. For
more information on our people, courses and other options please see the

involves examination of a government's taxation, expenditure, monetary and
exchange rate policies.
 Econometrics,
which brings economic theories to the data. It is the study of
methods aimed at i) testing economic theories and ii) providing quantitative
information on economic relationships for policy analyses and decisions. Courses
provide both an accessible account of available econometric methods, and
numerous illustrations of these methods with applications to real data sets in
hands-on laboratory classes that introduce students to the latest developments in
computing and web technology. What is Finance?

Finance is the study of savings, investment and risk. It describes the ways in which
individuals form, or should form, investment portfolios; the ways in which firms
make, or should make, investment decisions, and how they can best pay for these
investments; and the ways in which markets, institutions, regulators and governments
facilitate these decisions. As in economics, incentives play a pivotal role, but with
the added dimension that responses have uncertain and long-reaching consequences.
Finance draws heavily on the tools of mathematics, statistics (including probability),
and accounting, as well as economics and econometrics. At Canterbury, emphasis is
placed on the three core areas of finance. These are: 7 Corporate Finance,
which focuses on the financial decisions of the business firm.

Pathways of Study

The flexibility of University of Canterbury degrees allows students to design a
personal course of study to meet their needs. Set out below are possible courses of
study but they are suggestions only and our team will be happy to advise you.

The University Calendar sets out the definitive rules for the various degrees and if in
doubt, students should check the Calendar. First year students in particular should
seek advice at enrolment time.
“It has been my experience that competency in mathematics, both in numerical manipulations and in
understanding its conceptual foundations, enhances a person's ability to handle the more ambiguous and
qualitative relationships that dominate our day-to-day financial decision-making.”
Alan Greenspan

8

Along with the general requirements of the degree, students who wish to major in
economics must meet the following conditions:

100-level ECON104 and ECON105
200-level ECON 202 or 207; and
ECON 203 or ECON 208 or ECON 213; and
ECON 201 or 206 or 15 points ECON at 200-level which has not
been used to satisfy other 200 level majoring requirements
300-level At least 60 points of 300-level Economics, which must include
ECON 325 if ECON201 or ECON206 have not been credited to
the degree.

semester 1 (for finance students not continuing to honours, MATH 101 is sufficient).
Finance students intending to proceed to honours should also take MATH 103. 9

WARNING: Students without a mathematics background equivalent to NCEA Level
2 should pass MATH 101 before enrolling in any second year courses in finance.
Most third year courses have a prerequisite of MATH101 or MATH102. (MATH102
is recommended and is a prerequisite for some 300 level FINC courses. If you do not
take MATH102, there is no guarantee there will be enough 300 level FINC courses
offered every year to allow you to graduate.)

Many students have no interest in mathematics. However, there is a very good
pathway through to a major in economics that does not require mathematics. In the
B.A., economics is also a very attractive minor option. This handbook contains more
specific information on those various pathways.

Students should plan the rest of their first year to allow them as much second year
flexibility as possible. Many students, when they enter university, are unsure as to
which area of study they will eventually major in and their subject preference does
not become clear until well into the first year. Students should plan with an eye to
allowing a range of options in the second year.

Students who would benefit from improving their written English skills should also
consider enrolling in ENGL 117 or another course of interest that provides students
with an opportunity to develop their written skills. Second Year - Economics


Students who are intending to continue to honours are advised to take 45 points from
ECON 321 to 326. We strongly recommend taking ECON 324. Not only does this
open up a greater range of projects at the honours level but quantitative skills are
valued in the work place. For those who intend to progress to honours, it is also a
really good idea to take at least one applied course at the 300 level.
(Note that students who took ECON 208 rather than 203 prior to 2013 will be
allowed to enter honours provided they also pass ECON 321. Students who take their
200-level intermediate microeconomics course from 2013 onwards will be required
to take ECON 203 in order to enter honours).

Students who are not intending to progress to the honours level should select their
courses at the 300 level carefully. Many courses have a MATH or a STAT
prerequisite (or both). This is a strong signal that there is a significant mathematical
content to the course. Other 300 level courses are more language rather than
mathematics intensive and will usually involve more reading, written work or
sometimes presentations. Students should investigate carefully which courses are
most likely to suit their needs. A good approach is to “shop around” in the first two
weeks. You are free to change your course selection during this time. Third year – Finance
Students majoring in Finance must take at least 60 FINC 300-level points. These
must include 2 of FINC301, FINC311, FINC312.

Most 300-level Finance courses have MATH101 or MATH102 as a prerequisite, but
the latter is recommended. These courses differ in their requirements. FINC 312 and
331 make extensive use of mathematics (calculus, algebra and probability). FINC
305 requires considerable familiarity with spreadsheets. Enrolment in FINC 302 and
305 is limited to 70 students.

and BCom. Others combine economics with a subject in the same degree such as, for
example, political science or history (BA), accounting (BCom), or statistics (BSc).
Some combinations can be done under more than one degree, for example economics
and finance can be either a BSc or a BCom.

The undergraduate courses you choose will reflect what your ultimate goal is and
what your strengths are. The table on the next page sets out some possible options.

(Note that prior to 2010 MATH 102 was known as MATH 108 and STAT 101 was
known as STAT 111).

“Remember that time is money:” Benjamin Franklin 12

Economics Pathways for different types of student


level ECON courses. This route will appeal
to students taking an
LL.B. along with a
second degree Law
students who are
competent in
mathematics should
look at the 5 year
LL.B./B.Com.(hons) or
LL.B./B.A.(hons)
option described in this
handbook.

ECON 104 and 105

ECON 206
ECON 207
ECON 208

ECON 222, 223, 224
and 225
60 points from 300-
level ECON with 327,
329, 335, 336, 340, 341
and 342 likely to
appeal.
This combination of

quantitative approach.

ECON 104 and 105
MATH 102 & STAT
101

ECON 202
ECON 203
ECON 206
ECON 213

60 points from 300-
level ECON with 321,
323, 324 325, and 331
likely to appeal.
Students studying
subjects such as
Psychology or
Sociology will find that
Behavioural and
Experimental
Economics topics are
an ideal complement.

ECON 104 and 105
(MATH 102 and STAT
101 may be useful)

ECON 202 or 207
ECON 203 or 208

useful as is a written
language rich courses
such as ENGL 117.

13
Finance Pathways for different types of student

The Minimum route. The quantitative route. Finance and Accounting
Double Major Students
Economics and Finance
Double Major students
The Honours bound
student
This option is most suited to
students who are combining
finance with something else
and who do not wish to take
mathematics or statistics
and who only have room for
the bare minimum to
qualify for a major in
finance.

ACCT102, MATH 101,
MSCI 110 or STAT 101.

FINC201

Students who wish to major
in both subjects should take

ACCT 102 and ACCT 103
ECON 104
MATH 102
STAT 101

FINC 201 and 203
ACCT211 and ACCT222
ECON 202 or 208

60 points from 300-level
FINC courses including at
least 2 of
FINC301,FINC311,FINC312
and 60 points from 300-level
ACCT Students who wish to keep
their Honours options in
both subjects should take

ACCT102
ECON 104 and ECON 105
MATH 102
MSCI 110 or STAT 101

ECON202 and ECON203

FINC201, FINC203 and
FINC 205

FINC331
45 additional points from
300 level finance including
at least 2 of FINC301,
FINC311, FINC312.

14Pathway for students interested in Macroeconomics and Monetary Economics

First Year: Second Year:
Third Year:
Honours Year:


International Finance

ECON 202
Microeconomics
with calculus

15

An LLB and an Honours degree in Economics in five years.

It is difficult but not impossible for very able students to achieve an LLB and
an
honours degree in economics in five years (a strong mathematics facility is highly
desirable). The required papers to enter an honours degree in economics are taken
within the LLB and the student does not complete an undergraduate degree in
economics itself. The course of study would look something like this:

Year 1: LAWS101, 110, ECON104, 105, MATH102, STAT101, plus one other
100 level course (e.g. MATH 103) (120 points)
Year 2: 4 Group A LAWS courses, ECON 202, 203 (150 points)
Year 3: 2 Group A LAWS courses, 4 Group B LAWS courses, ECON 213, 325
(150 points)
Year 4: 7 Group B LAWS courses, 3 x 300-level ECON (recommended
ECON324). (150 points).

This option does require that one ECON 200 or 300-level course is substituted for
one Group B course which is allowable under the regulations with the approval of
Law. Students wishing to pursue this option must consult the Law Student Advisors.

Some students may also wish to discuss the possibility of an LLB(hons) and an


Students Majoring in Foreign Languages: (Any 3)
ECON 105 Introduction to Macroeconomics
ECON 222 International Trade
ECON 340 Development Economics
ECON 342 Economic History

Students who are seeking in major in Economics in the B.A. will need to minor in
another discipline. The following are examples of Arts courses that Economics
students are likely to find interesting.

Students interested in History
HIST136 Revolutions and Revolutionaries
HIST137 Modern World History
HIST253 Renaissance and Reformation Europe
HIST275 The Muslim World, 600-1650
HIST291 Chinese Society and Culture since 1949

Students interested in Classics
CLAS104 Greek Mythologies
CLAS201 Theatre and Performance in the Ancient World
CLAS213 Alexander the Great
CLAS214 Imperial Rome
CLAS220 Troy and Ancient Epic

Students interested in Chinese Language
CHIN 110 Oral Chinese 1
CHIN 115 Introduction to Business Chinese
CHIN 211 Study Chinese in China Summer Programme 1
CHIN 303 Chinese Society and Culture Since 1949 (30 points)

points from ECON 321, 322, 323, 324, 325, 326

BSc(Hons) (1) ECON 201 or ECON 206; and
(2) ECON 213 or STAT 213; and
(3) ECON 203 or ECON 321; and
(4) 60 points from ECON 321, 322, 323, 324, 325, 326 There are circumstances under which some of the prerequisites can be waived. See
the Graduate Studies Coordinator to discuss your particular circumstances.

Honours students take 4 courses per semester plus a research paper which lasts the
full year. There are four honours courses that are taken as part of an existing 300-
level course (ECON 663, 664, 678, 679). Students may take a maximum of two of
these courses.
There are also options to take honours level courses across more than one subject.
Students wishing to examine this option should discuss this with the Department’s
Graduate Studies Co-ordinator.

Students taking their 200-level microeconomics courses from 2013 onwards should
note that the entry requirements will be changing from “ECON 203 or ECON 321” to
simply “ECON 203” meaning that students will not be able to enter the honours
programme by taking ECON 208 then ECON 321. Further “ECON 201 or ECON
206” will change to “ECON 201 or ECON 206 or ECON 325”. “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.
The first lesson of politics is to disregard the first lesson of economics.”
Thomas Sowell.


The Masters programme is in two parts:
Part I: Eight courses or equivalent from ECON 601 – 679. This is equivalent
to the course work of the honours programme.
Part II: Thesis

Admission to the Masters programme is similar to the admission criteria for Honours
though with a slightly lower 300 level GPA required. Students who complete an
honours year can enter directly into part II of the Masters programme. Students
interested in enrolling in the MA or MCom should talk to the Postgraduate Studies
Co-ordinator.

Students should note that successful completion of the MCom. part I or the honours
year does not automatically mean that a student will be able to enrol in part II of the
MCom. There does need to be a thesis supervisor available though every attempt will
be made to find a supervisor.

19

The Postgraduate Diploma in Economics
The Postgraduate Diploma in Economics is the course work part of the honours year
(so is effectively equivalent to part I of the MCom.). Students who enrol in the
MCom can elect to “cash in” their study at the end of part I and exit with a
Postgraduate Diploma. Students who initially enrol in the Postgraduate Diploma and
successfully complete the requirements for (with a B or better average) can apply to
enrol in part II of the MCom.

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Master of Commerce in Finance
The Masters programme is in two parts:
Part I: Eight courses or equivalent from FINC 600-level courses. This is
equivalent to the honours year. Courses from other subjects may be
substituted for FINC courses where appropriate.
Part II: Thesis

Admission to the Masters programme is subject to the same criteria as Honours;
missing pre-requisites may need to be made up prior to or after admission. Students
who obtain first-class honours can enter directly into part II of the Masters
programme. Students interested in enrolling in the MCom should contact Professor
Boyle.
The quality of the Honours programme
The Department of Economics and Finance is proud of its honours programme and
we produce graduates of a high calibre as the following comments from visiting
Erskine Fellows makes clear:

“I am especially impressed with the undergraduate honours program at
Canterbury. This is, I think, superior to the honours program that we offer at
the University of California at Santa Barbara. The class sizes are smaller, the
material more challenging. Students who can perform at this level receive an
excellent education.”
Professor. Ted Bergstrom, 2009


What should I study at secondary school?
Students are recommended to devote their secondary school study to gaining a broad
liberal education, and subjects such as history and English that develop the ability to
write clearly and analyse written material are helpful. Studying economics (and
accounting in the case of finance) is useful but not essential. Those students who are
able to succeed in mathematics are strongly advised to take Mathematics with
Calculus at year 13. What Mathematics and Statistics do I need?
Finance students should take at least MATH 101. Students wishing to continue to
honours in economics or finance must take at least MATH 102 and MATH 103 is
recommended. They must also take STAT 101. Students who wish to major in
economics without the need for mathematics are fully able to do so and there is an
extensive range of 200 and 300-level courses that do not require mathematics.

STAT 101 is strongly recommended for all economics and finance students.
I have studied economics at school, can I go directly into 2nd year classes?
In order to obtain direct entry to 200 level economics (ECON 206 and 202) in their
first year of university study, high school students must study economics at year 13
level (and preferably mathematics with calculus) and meet the requirements as
follows.

ECON202 Microeconomics – to gain direct entry to ECON 202 students must gain
either
(i) an NZ scholarship award in economics; or
(ii) an “excellence” in standards 90630 (3.1) AND 90629 (3.2) (microeconomics);


What level of English language do I need?
Competence in English expression is essential. All students are presumed to be
competent in English.

Overseas students must have achieved appropriate standards in the International
English Language Testing System (IELTS) or equivalent.

Students wishing to pursue further programmes in English language and
communication may wish to seek advice from the International Student Centre (tel:
3642 391) or the English Language Centre (tel: 3642 905).
What is the difference between ECON 202/203 and 207/208?
Students take either 202/203 or 207/208. Students wishing to continue to honours
must take ECON 202 and 203.

As the names suggest, ECON 202/203 have a mathematics co-requisite (MATH 102)
and will require students to use some calculus in examinations. A co-requisite is a
course you must have already taken or be taking at the same time. Therefore, having
MATH 102 as a co-requisite means that students who did not take MATH 102 in
their first year but who now wish to potentially continue on to honours level can take
ECON 202. ECON 207 has no mathematics requirement, and the approach is a direct

23

follow-on of the graphical intuitive approach that students encountered in ECON 104.
Students who prefer measles to mathematics are more likely to find ECON 207 and
208 to their liking.

PSYC 206
For students who are majoring in Psychology and at the discretion of the Head of
Department of Economics, PSYC 206 will be allowed as an alternative to a required
STAT paper. Students seeking this waiver will normally have a solid study record at
both 100 and 200 level. “If you want to know what's happening in the market, ask the market.” Japanese proverb

24Do any courses have limitation of entry?
FINC 302 and 305 and 311 are limited to 70 students .

Should I do a BA, BCom or a BSc?
It is not the title of your degree that matters – more important are the subjects that it
contains and the grades achieved. What type of degree you get in economics or
finance is determined by the other subjects that you do. For any of the general
degrees, approximately 70% of the points in the degree must come from the schedule
for that degree and the remaining points can be from any schedule. Some courses are
in more than one schedule (e.g. Economics is in arts, commerce and science; Finance
is in commerce and science) while some are only in one (e.g. Accounting is only in
commerce). It is important to select your courses first which determines the focus of
your degree and then the title of your degree will look after itself. You can seek
further advice on this at enrolment time.
Students who elect to complete a BCom in economics will need to complete the five

Economics, 1970

25How do marks relate to grades in the Department of Economics and Finance?

The Department of Economics and Finance uses the University of Canterbury
grading scale for purposes of assessment in its courses. Percentage Mark Letter Grade
90-100 A+
85-89.9 A
80-84.9 A-

75-79.9 B+
70-74.9 B
65-69.9 B-

60-64.9 C+
55-59.9 C
50-54.9 (1) C-

45-49.9 (2) R

40-49.9 D
0-39.9 E

(1) Prior to 2012 a C- grade represented a restricted pass. From 2012 the restricted