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Frontiers of Applied Economics

Develop a strong foundation in economic theories and cutting-edge methods essential for understanding a wide range of policy issues, from digital transformation to persistent economic inequality.

Frontiers of Applied Economics

Develop a strong foundation in economic theories and cutting-edge methods essential for understanding a wide range of policy issues, from digital transformation to persistent economic inequality.

As modern economies become increasingly digitized and socially complex, the ability to apply rigorous economic logic to public policy and market behavior has never been more vital. From addressing environmental externalities and designing equitable tax systems to navigating the nuances of digital retail and labor market disparities, today’s leaders must be equipped with a versatile analytical toolkit. To prepare for these multifaceted challenges, industry professionals and policymakers must understand the microeconomic foundations that drive individual decision-making and institutional outcomes.

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In this course, you will engage with a diverse series of microeconomic applications led by six distinguished MIT faculty members. Through the lenses of public finance, industrial organization, market design, behavioral economics, and labor economics, you will explore foundational theories and their real-world implications. Specifically, you will analyze the optimal provision of public goods, the mechanics of tax incidence, and the evolving landscape of digital retail and price discrimination. You will also examine sophisticated market mechanisms, such as the Vickrey-Clarke-Groves (VCG) model and sponsored search auctions, alongside the psychological drivers of poverty and the persistent nature of gender gaps in the workforce. Overall, you will gain a systems-level understanding of how to leverage economic tools to design more efficient markets, evaluate social policies, and drive meaningful impact across the public and private sectors.

The course is free to audit. Learners can take a proctored exam and earn a course certificate by paying a fee, which varies by ability to pay. Please see our FAQ articles for more information on the certificate and audit track features as well as more information on the pricing structure. Enroll in this course by selecting the "enroll now" button at the top of the page.

This course can be completed by itself or as part of the MITx MicroMasters program in Data, Economics, and Design of Policy (DEDP), which provides a path toward the master’s in DEDP at MIT.

What you'll learn

The course will investigate the economic theories and cutting-edge methodologies that are used to address select challenges in the following fields:

  • Public finance, including public goods, cost-benefit analysis, and fiscal federalism
  • Industrial organization, including the economics of digitization
  • Market design, including the Vickrey-Clarke-Groves Mechanism
  • Transportation economics, including congestion
  • Psychology and economics, including reference dependent preferences
  • Labor economics, including gender gaps

Access the full syllabus here.

Prerequisites

Basic understanding of calculus and familiarity with microeconomics will be helpful for this course. There are no formal prerequisites, but we strongly recommend taking 14.100x (Microeconomics) before this course.

Course Readiness Check:

Our course readiness checks help you determine if you should review key concepts before starting the course.

Please use this link to access the course readiness check and answer key.

Meet your instructors

  • Featured image for Parag Pathak
    Class of 1922 Professor of Economics
  • Featured image for Sara Fisher Ellison
    Senior Lecturer
  • Featured image for Jonathan Gruber
    Ford Professor of Economics
  • Featured image for Nina Roussille
    Gordon K. Lister and Donald K. Lister Career Development Assistant Professor of Economics
  • Featured image for Frank Schilbach
    Associate Professor of Economics
  • Featured image for Tobias Salz
    Castle Krob Career Development Associate Professor of Economics

Who can take this course?

Because of U.S. Office of Foreign Assets Control (OFAC) restrictions and other U.S. federal regulations, learners residing in one or more of the following countries or regions will not be able to register for this course: Iran, Cuba, North Korea and the Crimea, Donetsk People's Republic and Luhansk People's Republic regions of Ukraine.