Microeconomic Policy


Course Objective

The objective of this course is to identify, justify, analyze and
evaluate policy options to various current economic problems, including
issues in the fields of development and trade, climate and environment,
labor markets and social insurance, as well as competition policy for
and regulation of product markets. Using problem sets along with work on
empirical economic data will increase and deepen understanding and help
broach a large number of applied policy fields.

Specific learning outcomes upon completion of this course are:
i. students are able to formulate the economic rationale for policy
intervention in various current economic problems, developed from
insights based on economic theories;
ii. students are able to evaluate existing and potential policy options,
both in theory and in practice;
iii. students can apply tools of economic modeling and are able to
interpret economic data;
iv. students show a critical attitude to existing theoretical and
empirical policy analysis of current economic problems.

Course Content

Microeconomic policy is on top of the agenda when it comes to keeping
individual countries on the path to stability and growth. Microeconomic
structural reforms (say, in labor and product markets, social security
and welfare systems) are often seen as long-run policy measures, geared
at structural and sustainable solutions, and are complementary to
short-term macroeconomic stabilization policies.

This course discusses the role of economic policy in the context of both
market failures and government objectives to adjust market outcomes,
including distributional aspects.

Current structural economic problems arising in the following fields are
prime candidates to be discussed:
• taking into account the trade-off between efficiency and equity when
formulating policy goals in an interconnected world;
• measuring inequality of incomes and the role of distributional policy;
• development and trade: analysis of living standards and poverty,
provision of legal and political frameworks, trade protection, WTO;
• environment: externalities from pollution, regulation and tax
solutions; public goods and free rider behavior; climate policy
challenges and trade effects;
• labor market allocation; labor supply responses to the tax and
transfer system;
• social insurance and asymmetric information: disability insurance,
moral hazard, welfare payments;
• competition policy and regulation: imperfect competition, market
power, cartels, price-discrimination, regulation and de-regulation.

During the course, both theoretical and empirical economic work in
policy context is discussed.

Teaching Methods


Method of Assessment

Grade is average of problem sets (30%) and written examination (70%),
with written exam grade of at least 5.0.

Entry Requirements

Basic knowledge of mathematics (differential calculus; high school
level) and statistics, as provided in the academic core of most academic
BSc programs at Vrije Universiteit Amsterdam or equivalent.


Main text: to be specified;
Various academic papers and ancillary textbook chapters, to be announced
on Canvas.

Target Audience

Third-year bachelor students of any major (except Economics and Business
Economics; and Econometrics).

Additional Information

This course replaces the previous course "Structural Policy". It is an
integral part of the University Minor Economics; participants gain
strongly from attending the entire minor program. This course prepares
for Economic Policy Analysis, and has intersections with the course
Macroeconomic Policy.

Recommended background knowledge

The course builds on a previous courses in the Minor Economics program,
in particular, Foundations of Microeconomics. Familiarity with contents
of that course is assumed. Familiarity includes a working knowledge of
how to apply economic models in context and how to select and use
appropriate graphical tools of analysis. Foundations of Macroeconomics
is useful.

General Information

Course Code E_ME_MIEP
Credits 6 EC
Period P2
Course Level 300
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. S. Hochguertel
Examiner dr. S. Hochguertel
Teaching Staff dr. S. Hochguertel

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Study Group, Lecture
Target audiences

This course is also available as: