AEM 4500 / ECON 4810 introduces students to the economics of renewable and nonrenewable natural resources. Topics covered include the valuation and use of land; water economics, management, and conservation; the extraction and management of nonrenewable resources such as minerals, rare earth elements, and energy resources; renewable and nonrenewable sources of energy; forest management; fishery economics; groundwater; and sustainability. Students will learn how to use dynamic models to analyze decision-making over time, and to solve dynamic optimization problems analytically and numerically. Students will also learn how to analyze and explain the intuition and logic behind the theory and concepts. Students will apply the methods, quantitative tools, and concepts to analyze natural resource issues at global and local levels; to introspectively reflect on their own lives and future aspirations; and to draw lessons and implications for leadership, management, and policy. A solid background in calculus is required.

*Prerequisites:* Math 1110 and Econ 3030. These prerequisites must be completed before taking AEM 4500 / ECON 4810 (and cannot be taken concurrently). For students whose major or minor require both AEM 2500 and AEM 4500, AEM 2500 should be taken before AEM 4500.

AEM 7040 / AEM 6940 covers analytical concepts and techniques of dynamic analysis, with a focus on optimal control theory as applied to problems in applied macroeconomics. The course also covers macroeconomic applications of these methods that are relevant to the environment, energy, natural resources, agriculture, development, management, finance, marketing, accounting, industrial organization, innovation, entrepreneurship, organizations, technology, and business economics. Topics covered include optimal control theory, capital theory, the maximum principle, the stationary rate of return to capital, investment, dynamic competitive equilibrium, calculus of variations, q-theory, optimal economic growth, optimal savings, optimal growth with pollution, the environmental Kuznets curve, optimal multisector growth, limits to growth, national income accounting, sustainability, natural capital, discounting, structural uncertainty, catastrophes, the dismal theorem, climate change, innovation, endogeneous technical change, and productivity.

*Prerequisites:* Multivariable calculus; differential equations; and graduate-level microeconomics.

*Note:* AEM 7040 is listed as AEM 6940 in Fall Semester 2019 since it is a new course.

AEM 7500 covers analytic methods for analyzing optimal control theory problems; analytic and numerical methods for solving dynamic programming problems; numerical methods for solving stochastic dynamic programming problems; structural econometric models of static games of incomplete information; structural econometric models of single-agent dynamic optimization problems; and structural econometric models of multi-agent dynamic games. The course also covers economic applications of these methods that are relevant to the environment, energy, natural resources, agriculture, development, management, finance, marketing, industrial organization, and business economics. These applications include firm investment, nonrenewable resource extraction, optimal economic growth, fisheries, subsistence agriculture, investment under uncertainty, optimal stopping, (S,s) policies, q-theory, petroleum production, water management, environmental policy, engine replacement, land use, rural labor supply, incentive schemes, health, and education. The methods covered in the course enable one to analyze the strategic and dynamic decision-making behavior of individuals, households, organizations, firms, and countries; to analyze how different institutions and policies (and changes in these institutions and policies) affect this behavior and its outcome; and to design institutions and policies so that the decision-making behavior and outcome that are realized increase net benefits to society.

*Prerequisites:* Graduate-level microeconomics and graduate-level econometrics.

ARE 147/M introduces students to the use of economics to understand and
analyze environmental and natural resource problems and policy. Topics
covered include economic efficiency, costs, benefits, benefit-cost
analysis, equity, markets, market failures, externalities, public goods,
open access resources, and government policy. Students will learn how
to apply these concepts to a variety of environmental and natural
resource issues, including air pollution, water pollution, open space,
endangered species, water, fisheries, and forests. *Prerequisite:* Economics 1A. *GE credit:* SocSci.

ARE/ESP 175 introduces students to the economics of renewable and
nonrenewable natural resources. Topics covered include the valuation
and use of land and water; fishery economics, management and
regulation; extraction and management of nonrenewable resources such as
minerals and energy resources; renewable and nonrenewable sources of
energy; forest use; sustainability; and natural resource scarcity.
Students will learn how to use dynamic models to analyze decision
making over time. A solid background in calculus is required. *Prerequisite:* ARE 100B, Economics 100, or permission of instructor. *GE credit:* SocSci.

The first half of ARE 254 covers analytical concepts and techniques of dynamic analysis, with a focus on optimal control theory as applied to economic problems. Topics covered include the maximum principle and the concepts of a stationary rate of return to capital and a stationary solution. Applications to nonrenewable resource extraction and optimal economic growth will be presented.

The second half of ARE 254 covers numerical methods for analyzing optimal control theory problems; analytic and numerical methods for solving dynamic programming problems; and numerical methods for solving stochastic dynamic programming problems, with a focus on such economic applications as firm investment, nonrenewable resource extraction, optimal economic growth, subsistence agriculture, investment under uncertainty, optimal stopping, (S,s) policies, and q theory.

This course prepares you for courses that focus on decision making over time, including ARE 277 and ARE 255.

ARE 255 covers structural econometric models of static games of
incomplete information, single-agent dynamic optimization problems and
multi-agent dynamic games, with a focus on applications to issues
relevant to the environment, energy, natural resources, agriculture, and
development. The methods covered in the course enable one to analyze
the strategic and dynamic decision-making behavior of individuals and firms;
to analyze how different institutions and policies (and changes in
these institutions and policies) affect this behavior and its outcome;
and to design institutions and policies so that the decision-making
behavior and outcome that are realized increase social welfare. *Prerequisites:* Graduate-level microeconomics, graduate-level econometrics, and ARE 254.