Both theoretical models and empirical applications will be discussed in this course. Students who register are assumed to be familiar with time series econometrics. Technical details may not be discussed in the course. There is a mid-term examination but no final examination. You are required to hand in a term paper. The topics of your term paper should be related to the topics in the syllabus. If the size of the class is very small then I may ask for class presentation. The grade of your class presentation depends on several factors such as the successfulness of your presentation and the importance of the selected article. Your final grade is determined by your class presentation (0 or 10%), term paper (70%) and the mid-term examination (20% or 30%). The literature with a star (*) in the syllabus will be discussed in class if we have enough time. Sit in the class is not suggested since you are likely to waste your time.