Global Economics, Econ 13

Mark McNeil
Spring 2012

 
Welcome to Global Economics. This course examines the institutions, the economic theory, and some of the issues associated with international trade and global integration. It first establishes the general theoretical basis for trade among countries- wealth. It then reviews institutional structure in which trade takes place, these include international markets for goods and for financial assets, government actions as they relate to international trade and finance, and the international institutions like the IMF, World Bank, and the WTO. Finally, the course investigates some of the major problems and criticisms of international economic integration. The course is very topical in that it will attend to many of the issues that are currently of major consequence in the political arena: trade restrictions, globalization, trade deficits, exchange rate management, and global financial crises. In short, the course is a combination of the major issues associated with the global economy and the economic theory associated with these issues.
 
Text and Readings.  The primary book used in this course will be Free Trade Under Fire, by Douglas A. Irwin, 3d ed., (ISBN: 9780691143156). This can be purchased at the IVC Bookstore, online at: http://press.princeton.edu/titles/9027.html, or you can purchase the eBook version on Amazon.
The second book we will read parts of is Macroeconomics, by Timothy Tregarthen & Libby Rittenberg. This book can be obtained for purchase or to read online for free at:
http://www.flatworldknowledge.com. Look for the "Find My Class" button at the top of the page, or,
http://www.flatworldknowledge.com/mmcneil/principles-economics-macro. This link takes you to the correct page.
Additionally, there will be assignments from other texts, online sources, or in-class hand-outs as the course progresses.
 
Grading.  There will be 2 midterm examinations (50 points each), homework assignments, quizzes or other assignments (100 points total), and a comprehensive final examination (100 points). The mid-term examinations and the final examination will be part multiple choice questions and part short essays and problems. The quizzes will be multiple choice only. For every test or quiz you will need to bring a Scantron form (one that has 5 possible answers, a-e) and a simple calculator. You may not use cell phones, PDA’s, or fancy calculators.  When I calculate the grade, I drop the lowest 50 point test score.  Final grades will be assigned as follows: 90% or more of the total points, A; 80% of the total points, B; 70%, C; etc.  The diagram below will help you keep track of your grades.  Please keep all returned tests, quizzes and homework for your records.
 
I strongly encourage you to do the following in this course:
 
1.     Attend. You need to attend class because you are responsible for what happens in the class – if a test or quiz is announced or if something is handed out; because you need a complete set of notes to study for tests or the final exam; because listening to the lectures is very helpful in learning the material; and because the instructor gets lonely and feels rejected when students do not attend the lecture.
2.     Be Optimistic and Do the Work. Hard work and perseverance are rewarded. There is no substitute for spending the time to do the work.  Success in an economics class is almost always the result of hard work and a positive attitude.  This material is manageable - I promise. Stick with it.
3.     Ask questions. If you have questions or difficulties, ask.  Ask questions in class, ask other students, ask me, or go to the tutoring center in the library.
4.     Relate the course material to the real world. Since an economics course will help you understand your world much better, feel free to raise questions about economic events that are taking place during the semester.
5.     Enjoy the process. Learning involves work and is sometimes difficult, but it is also very satisfying and, in some strange way, fun. Make it a positive experience.


COURSE OUTLINE AND ASSIGNMENT SCHEDULE

LESSON 1 Introduction

a. On the importance of international commerce.
b. Why trade? (Imagine a world with no trade.)
Tools: markets, supply and demand, consumer and producer surplus.
Reading assignments: Chapters 1 , Irwin
Tools assignment: Chapters 3 & 4, Tregarthen & Rittenberg

LESSON 2 Patterns of International Production

a. Heckscher-Ohlin
b. Trade and growth
Tools: Production possibilities, comparative advantage, gains from trade
 
Reading assignments: Chapter2, Irwin
Tools assignment: Chapter 2, Tregarthen & Rittenberg

Test 1, Lessons 1 & 2

LESSON 3 Trade Protection - Costs & Benefits

a. Tariffs and their effects
b. Other trade restrictions
c. Direct and indirect effects
d. The political economy of trade restriction
Tools: CS, PS, DWL
Reading assignment: Chapters 3 Irwin
Tools to be assigned
LESSON 4 Trade & Jobs
a. Does trade cost jobs?
b. Does tade reduce wages?
c. Keeping the books - the balances
d. The issue of offsetting balances
Tools: The International Accounts
Reading assignment: Chapter 4, Irwin
Tools to be assigned
 
Lesson 5 Making Trade Fair

a. Dumping
b. Subsidies
c. Trying to make it all fair
e. Efficiency issues

Reading assignment: Chapter 5, Irwin
Tools to be assigned

Test 2, Lessons 3-5

LESSON 6 Trade & Economic Development

a What causes economic growth?
b. The joys of autarky
c. China and India
d. Industrial policy
e. The labor standards issue
Reading assignment: Chapter 6, Irwin
Secrets of Intangible Wealth,
http://cocolog-yoshi.cocolog-nifty.com/blog/files/WSJ070929Bailey.pdf


LESSON 7 The World Trading System

        a.   A little history
        b.  Bretton Woods & GATT - round and round
        c.   The WTO
        d.   Health and safety issues
        e.   Regional trade agreements
       
                    Reading assignment: Chapters 7, Irwin

LESSON 8 Parity, Risk & Arbitrage

a. Parity issues
b. Risk issues, keep it covered or uncovered
c. Spot and forward markets
d. Arbitrage

Reading assignment: to be assigned

LESSON 9 Conclusions and Speculations

Reading assignment: To be assigned

Final Examination


Please be aware of the following dates:

Martin Luther King, Jr. Holiday: Jan. 16
Last day to drop without a “W”:  Feb. 14 (this is also the last day to select a credit/no credit option)
Lincoln/Washington Holiday: Feb. 17-20
Spring Break: Mar. 11-17
Last day to drop:  Apr. 5
Final Exam Week: May 11-17
May 18: Commencement


Office number: BSTIC 210H-- Telephone: (949) 451-5313 -- e-mail: mmcneil@ivc.edu
Office Hours (please note that these are subject to change):
Mon-Wed 11-12:30
Tue-Thurs 12:30-1:30

The McNeil, Microeconomics web page address is: http://iserver.ivc.cc.ca.us/faculty/mmcneil/


About the Issue of Academic Honesty:
a. Any work you turn in must be your own. If you study and do your homework with other students, you may work out the answers to the problems together, but when you write your answers on the homework paper, it must be in your own words.
b. The penalties for any type of cheating are very severe, including dismissal from the course with a grade of "F", probation, suspension, or expulsion from the college. Please be sure to do your own work.


Mobile phones must be turned off.  No exceptions.
No cameras or recorders except with permission.
No laptops unless you talk to the instructor first.


The information on this syllabus is subject to change over the course of the semester. Information about any changes will be discussed with and provided to the class.
Please forward your student email account to your home account so that I can communicate with you should the need arise.

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