Aim:

Introduces students to the fundamentals of micro- and macro-economics, with a focus on construction firms, markets and industries. The objectives are to not only cover the conventional economic theories and policies that students need to explore but also new developments on environmental economics, economic growth, innovation and inequality.



Objectives:

To introduce core economic concepts and the construction industry
 To explain effective use of resources by examining allocation systems, market mechanism, and theories on demand and supply.
 To describe construction clients and contractors, costs of the construction firm, and types of market structure in the construction industry
 To access markets for green buildings and infrastructure, market failure and government intervention, and introduce main topics of environmental economics
 To explain macroeconomic objectives and policies, measurement and manipulation of construction, and the roles of inflation and expectations
 To describe the role of construction in sustainable economic development
 To introduce the innovations in the construction industry and their potential impact on economic inequality
Learning Outcomes:

Understanding of basic economic concepts such as choice, scarcity, opportunity cost, and productivity, and key macroeconomic policies, and ability to locate key economic data resources
 Implications of key economic knowledge in construction with theories on allocation systems, market mechanism, and demand and supply.
 Understanding of the sectors, work types, construction clients and contractors, costs of the construction firm, and types of market structure.
 Understanding of key concepts of environmental economics and their applications in sustainable construction such as green buildings and infrastructure
 Understanding of key macrocosmic topics such market failure and government intervention, macroeconomic objectives and policies, and the roles of inflation and expectations
 Implications of innovation in the construction industry, understanding its potential impact on economic inequality
Content may include: 

During the first term, we will focus on microeconomics, especially the roles of markets in allocating resources. Hence this term will provide essential knowledge to explain competitive construction businesses run by rational entrepreneurs.

After introducing core economic concepts and the construction industry, we will explain effective use of resources by examining allocation systems and market mechanism. We will discuss theories of demand and supply, and specify the determinants of demand and supply for infrastructure, housing, industrial buildings, commercial property, and repair and maintenance. We will also cover topics on construction clients and contractors, costs of the construction firm, and types of market structure in the construction industry. Meanwhile, the broader nature of construction and the value it adds to the economy will be explained.

During the second term, we will cover topics on macroeconomics, environmental economics, innovation, growth and inequality.

We will present topics on protection and enhancement of the environment. We will also consider failures of the market system, and government intervention tools such as taxation and subsidies. Meanwhile, we will discuss carbon reduction, wellbeing and productivity and general resource efficiency to tackle the implications of the Paris agreement, and continuing debates around fragmentation, reductions in costs, lower emissions and faster project delivery.

We will then incorporate construction into broader macroeconomic setup. We will explain the various government objectives and macroeconomic policies. Besides discussions on managing an economy to achieve economic growth that meets the needs of everyone, we will explain innovation in the construction industry, with aims to shed light on the issues related to economic growth and inequality.



Essential Reading: 

Meyers (2017), Construction Economics: A New Introduction, 4th Ed.

Unit 1, and Unit 20, from CoreEcon (2016), The Economy: The Core Project. http://www.core-econ.org/ (Uploaded to Moodle)

IMF(2015), Causes and Consequences of Income Inequality: A Global Perspective, IMF Staff Discussion Note, SDN/15/13 (Uploaded to Moodle)

Further Reading:

Gruneberg, S. and Ive, G. (2000) The Economics of the Modern Construction Firm, MacMillan.

Ive, G., and Gruneberg, S. (2000) The Economics of the Modern Construction Sector, MacMillan.