Global Economics, Econ 13
Mark McNeil
Spring 2009
 
Welcome to Global Economics. This course reviews the institutions and economic theory associated with international trade and global integration. It first explains the theoretical basis for trade among countries- wealth. It then reviews institutional structure in which trade takes place, and finally it 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, and exchange rate management. In addition to the economic aspects of these issues, we will also integrate into the discussion the political and social consequences of international trade.
 
Text and Readings.  The text used in this course will be Global Economic Issues and Policies, by Joseph P. Daniels and David D. VanHoose (ISBN: 0-324-26908-0 or 0-324-07188-4). There will be additional readings assigned during the semester.
 
Grading.  There will be 3 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.

a. On the importance of international commerce.

b. Why trade? (Imagine a world with no trade.)
c. A few basics: markets, supply and demand, consumer and producer surplus.
d. Absolute and comparative advantage.
e. The gains from trade.

Reading assignment: Chapters 1 & 2, Daniels & VanHoose

LESSON 2 Patterns of International Production

a. Heckscher-Ohlin

b. Trade and growth

Reading assignment: Chapter3, Daniels & VanHoose

Test 1, Chapters 1-3

LESSON 3 Trade Policies, Regionalism & Free Trade

a. Tariffs and their effects

b. Other trade restrictions

c. Regional trade blocks

d. Does regionalism morph into multilateralism?

Reading assignment: Chapters 4 & 5, Daniels & VanHoose

a. Keeping the books - the balances

b. Foreign exchange markets and foreign exchange rate determination

c. Spot vs. forward markets

d. How derivative!

Reading assignment: Chapter 6, Daniels & VanHoose

a. A history of exchange rates
b. What should exchange rates be? PPP?
d. PPPP?
e. Foreign exchange market efficiency

Reading assignment: Chapters 7 & 8, Daniels & VanHoose

LESSON 6 The Role of Central Banks

a Functions of central banks

b. Central banks and their effects on interest rates, prices and GDP

c. Intervention

Reading assignment: Chapter 9, Daniels & VanHoose

Test 3, Chapters 7-9

LESSON 7 Issues and Policies

        a.   Globalization and wages
        b.   Globalization and economic development
        c.   Economies of scale and globalization
        d.   Consumer protection and international trade
        e.   Globalization and externalities
        f.    Globalization and tax competition
                    Reading assignment: Chapters 10, 11 & 12, Daniels & VanHoose

LESSON 8 Policy Options in a Globalized World

a. Rules vs. discretion
b. Policy coordination?

Reading assignment: Chapter 13, Daniels & VanHoose

LESSON 9 Do We Need a New, New World Order?

Reading assignment: Chapter 14, Daniels & VanHoose

Final Examination

Martin Luther King, Jr. Holiday: Jan. 19
Last day to drop without a “W”:  Feb. 19 (this is also the last day to select a credit/no credit option)
Lincoln/Washington Holiday: Feb. 13-16
Spring Break: Mar. 15-21
Last day to drop:  Apr. 9
Final Exams: May 15-21 (Final Exam Schedule)
May 22: Commencement

Office number: A236 -- Telephone: (949) 451-5313 -- e-mail: mmcneil@ivc.edu
Office Hours (please note that these are subject to change):
Mon-Wed 11-12:30
Wed 6-7
Fri 12:30-1:30

The McNeil, Microeconomics web page address is: http://iserver.ivc.cc.ca.us/faculty/mmcneil/econ1/e1indx.html