MSc PROJECT AND ENTERPRISE MANAGEMENT

CORE MODULE BENVG PML

PROJECTS, ECONOMICS, SECTORS AND BEHAVIOUR

Module Outline and Reading List

Gerard de Valence
Outline

This module provides an introduction to economics and brings an economic

perspective to the project management material elsewhere in the course program.
We examine economic aspects of projects using both theory and case studies.

This module aims to introduce students to:

 Principles of economics and finance relevant to projects and enterprises.
 Concepts and approaches from microeconomics, macroeconomics,
behavioural economics, corporate finance, and industry economics.
 Ways in which economic principles can be applied to projects.
 Concepts relevant to project management from sociology and psychology.
 Applications of the concepts and approaches covered to the management
of projects, enterprises and supply chains.

The learning objectives are for students to acquire:

 A systematic knowledge of microeconomics, behavioural economics,
industry economics and macroeconomics, and their relevance to project
management.
 A critical understanding of various approaches to economics and their
application to policy issues.
 An ability to apply and communicate to others the essential insights from
economics, sociology and psychology to a business context.
 The ability to undertake an economic analysis of the construction industry.

Text

The set text for the module is an online ebook from Core Economics called The
Economy. You register and get free access to their web page here
http://www.core-econ.org/

Students are expected to have done the required preliminary reading before the
lectures, as detailed in the Content section. The lecture notes and preliminary
readings are essential material, with additional reading suggestions provided in
this course outline and in the lectures.

Sloman J, Garratt D and Wride A (2015), Economics is a widely used economics

textbook and can be used in addition to the set readings. There are many other,

2
similar texts that can also be used. (Note: older texts will not include the financial
crisis of 2007-08 and its causes and consequences).

Lecture Content

Lecture 1 (14/11 AM)

 Introduction to the module

 Core Economics and The Economy
 Economic systems and institutions

Reading: The Economy, Preface and Ch. 1.

Additional: Sloman et al. (2015), Economics, Ch. 1.

Lecture 2 (14/11 PM)

 Technology, costs, growth and innovation

 Production, preferences and opportunity costs
 Scarcity and decision-making

Reading: The Economy, Chpts. 2 and 3.

Additional: Sloman et al. (2015), Economics, Ch. 22.

Lecture 3 (21/11 AM)

 Game theory, behaviour and social interactions

 Competition, negotiation and social norms
 Public goods, inequality and Pareto efficiency

Reading: The Economy, Chpts. 4 and 5.

Additional: Baddeley M (2016), Behavioural Economics: A Very Short
Introduction.

3
Lecture 4 (21/11 PM)

 Firms and markets, wages and profits

 Incomplete contracts, principals and agents
 Production, competition and market power

Reading: The Economy, Chpts. 6 and 7.

Additional: Sloman et al. A (2015), Economics, Chpts. 11 and 13.

Lecture 5 (28/11 AM)

 Demand, supply and competitive equilibrium

 Price setting and price taking firms
 Measuring the economy and unemployment

Reading: The Economy, Chpts. 8 and 9.

Additional: Sloman et al. (2015), Economics, Chpts. 4 and 5.

Lecture 6 (28/11 PM)

 Banks, borrowing and lending

 Central banks and the money market
 Financial markets, bubbles and crashes

Reading: The Economy, Chpts. 10 and 11.

Additional: The Economy, Chpts. 12 and 17. Sloman et al. (2015), Economics,
Chpts. 18 and 19.

Lecture 7 (5/12 AM)

 Measuring the aggregate economy and GDP

 Economic growth and the business cycle
 Unemployment and fiscal policy

4
Reading: The Economy, Chpts. 13 and 14.
Additional: Sloman et al. (2015), Economics, Chpts. 14, 15 and 17.

Lecture 8 (5/12 PM)

 Inflation and unemployment

 Monetary policy and interest rates
 Technological change, wages and productivity

Reading: The Economy, Chpts. 15 and 16.

Additional: The Economy, Ch. 21. Sloman et al. (2015), Economics, Chpts. 20
and 21.

Lecture 9 (12/12 AM)

 Construction industry economics and policy

 Market structure and barriers to entry
 Auctions, competition and collusion in construction

Reading: De Valence, G (2011), Modern Construction Economics, Taylor and

Francis.
Additional: Ive G and Gruneberg S (2000), The Economics of the Modern
Construction Sector, Palgrave Macmillan.

Lecture 10 (12/12 PM)

 Applying economics, sociology and psychology to projects

 Review of module

Exam

There is a 2 hour exam worth 100% of the assessment for this subject.

5
Additional Reading

Economic principles and microeconomics

Dixit A (2014), Microeconomics – A Very Short Introduction, Oxford University

Press.
Dasgupta P (2007), Economics – A Very Short Introduction, Oxford University
Press.
Chang H-J (2014), Economics – A User’s Guide, Pelican Books.

Behavioural economics

Baddeley M (2016), Behavioural Economics – A Very Short Introduction, Oxford

University Press.
Kahneman D (2011), Thinking Fast and Slow, Allen-Lane Penguin, especially
Chapters 1-9.
Thaler R and Sunstein C (2008), Nudge – Improving Decisions about Health,
Wealth and Happiness, especially chapters 1-5.

Industry economics and construction economics

Einav, L and Levin, J (2010), ‘Empirical Industrial Organization: A Progress

Report.’ Journal of Economic Perspectives, 24(2): 145-62.
De Valence, G (2011), Modern Construction Economics, Taylor and Francis.
De Valence G (2007), 'The Significance of Barriers to Entry in the Construction
Industry', Australian Journal of Construction Economics and Building, vol. 7, no.
1, pp. 29-37.
Ive G and Gruneberg S (2000), The Economics of the Modern Construction
Sector, Palgrave Macmillan.

Macroeconomics

Sloman J, Garratt D and Wride A (2015), Economics, Chapters 14 – 23.