Logo Doctoral Certificate Program in Agricultural Economics Deutsch
Course of Study

Module 4200
Foundations of Agricultural Economics: Selected Topics

Place: IAMO, Halle (Saale)


Prof. Dr. Dr. h.c. mult. Ulrich Koester
University of Kiel
Department of Agricultural Economics
Wilhelm-Seelig-Platz 6/7
24118 Kiel
Phone: 0431/8804436, ukoester@ae-uni-kiel.de

Dr. Linde Götz
Theodor-Lieser-Strasse 2
06120 Halle/Saale
Phone: 0345/2928327, goetz@iamo.de

Course Description

The course is supposed to provide an update, upgrade or extension for students who hold a Master degree honoured by a foreign university or who have not got a complete education in economics. The content aims at harmonizing the state of knowledge in the field of economic theory and policy analysis. Moreover, participants will be trained to apply economic theory – including institutional economics - for the assessment of real world problems. A fairly broad and large program is offered, which may be adjusted according to the course participants’ preferences. The aim of the course is not mainly to teach tools. Instead, it is intended to stimulate critical thinking and to challenge some assumptions of neoclassical theory. In order to provoke critical thinking we may start a session with a ‘fallacy’. A fallacy is a statement which is considered as valid by most people and even by many economists.

There will be two morning sessions where the instructors try to improve the participants’ economic way of thinking. The focus of the afternoon is on the application of economic theory to real world problems. “Pure Economic Theory is merely idle amusement unless it is tested and applied” (F.V. Waugh, Demand and Price Analysis, 1964). We try to train the application of the economic way of thinking by the policy analysis of specific laws from selected transition countries. The participants will be asked to analyse policy impacts in a group of three or four for about 60 minutes and discuss their findings in a plenary discussion with the lecturer for about two hours. Hence, students should learn to question the assumptions of specific economic theories and to use in addition the present state of knowledge of institutional economics for explaining real world problems.

Organisation and time

The course is organised as a block seminar. The course takes place Monday to Saturday at the IAMO in Halle/Saale. There will be an oral exam on Saturday.

Time schedule

The present plan is to have 4 hours (4 times 45 minutes) teaching and discussion in the morning. The afternoon should start with a group discussion. It is suggested that groups of 3 to 4 participants try to assess the impact of a selected law in about 60 minutes. Thereafter follows a discussion in the plenary for about 45 to 60 minutes. After this session participants are expected to read about 20 pages (2 hours reading time). It is planned to give an oral exam on Saturday. Hence, you should plan not to leave Halle before or at lunch time.

It would be very helpful for the lecturers if you were to inform them on your formal education, the country you come from, the supervisor of your dissertation and the topic of your dissertation. Please send a mail with this information to Goetz@iamo.de, UKoester@ae.uni-kiel.de.

Course Program


Morning session

Methodology in economics, coordination of individual decisions by markets and the relationship to morality  

  • The role of economics for selecting the mechanism which coordinates individual decisions in a society
  • Clarify that economics is part of social science and as such includes value judgments
  • Discuss under what conditions the economic order as proposed by neoclassical economics might coincident with moral standards of a specific society
  • Transaction costs as a main determinant of productive interactions
  • Discuss the role of the government for securing incentive compatibility
  • The importance of institutions for transition and agricultural development

Afternoon session:

Case study: Analysis of the impacts of a selected law from a transition country


Morning session

Specifics of agricultural markets and the agricultural sector

  • Students should learn that agricultural markets are characterized by some specifics, such as
    • private and public goods and
    • search, credence goods and experience goods
  • Specifics on the demand side of agricultural products and the relevance of neoclassical approach to economics
  • Specifics on the supply side and the relevance of  the neoclassical approach to economics
  • Specifics of price formation for agricultural products and factors
  • The role of agricultural policy for achieving policy objectives
  • Determinants of agricultural growth

Afternoon session:

Case study: Analysis of the impacts of a selected law from a transition country


Morning session

Evaluation of agricultural policies

  • Normative aspects of any policy evaluation
  • The importance of a reference system
  • Economic versus financial costs
  • Justification of changes in policies
  • Market and policy failure
  • The role of markets and the role of the government in a market economy

Afternoon session:

Case study: Analysis of the impacts of a selected law from a transition country


Morning session

Welfare economics

  • The specific assumptions of traditional welfare economics
  • Welfare effects of policies
  • Change in welfare due to change in income
  • From individual to social welfare
  • Change in welfare due to change in prices
  • 2 concepts of welfare measurement
  • The limits of welfare analysis
  • Exercises in the application of welfare analysis

Afternoon session:

Case study on policy and welfare analysis

Export restrictions for wheat in Kazakhstan, Russia, Serbia and Ukraine: Effective measures to improve domestic food security?


Morning session:

Governance problems

  • The term governance
  • The importance of governance for assessment of policy measures
  • Corruption and patronage as a governance problem
  • Some criteria for good governance
  • Policy measures which may cause governance problems
  • Designing a trade policy which minimizes government policies

Afternoon session:

Individual study to prepare for the exam


Oral exam



A detailed list of references will be provided in the course. However, it is expected that participants read the following publication before the class starts:

Credit Points: 3

Grading: Oral exam on Saturday

Course language: English