Global Issues: The World Trading System (Economics 4999-003)

 

Wolfgang Keller                    

Fall 2005

 

Time & place    : TR 9:30 – 10:45 in STAD 135

Office               : Economics 222

Office hours      : Thursdays 10:45 am – 1 pm and by email appointment

Email                : Wolfgang.Keller@colorado.edu

 

This class discusses major topics in the area of globalization, where the latter may be defined as the result of increased integration in the world economy. The goal for this class is that you develop the ability to judge arguments in this debate based upon their economic merits.

 

We want to make sure that we cover some major globalization issues. This is why the structure for this course is largely provided by the award-winning movie “Life and Debt” (2001) by Stephanie Black (www.lifeanddebt.org ), which critically discusses globalization issues in the case of Jamaica over the last three decades or so.  We will watch this movie at the beginning of the course, after which it will be on reserve for this course.  Topics covered in the movie include

 

-         Civil unrest and globalization protests

-         Political independence and economic self-determination

-         Import protection for local Jamaican farmers

-         Conditionality imposed by the International Monetary Fund (IMF)

-         The effects of European export subsidies on Jamaican dairy farmers

-         Economic ‘free zones’ in Jamaica that are sheltered from local labor laws

-         Economic efficiency versus social dignity

 

These are important issues, albeit complex ones. In the course of this term, I will explain the economist’s thinking on these issues. To do this, I will develop economic models to illustrate the theory, or provide empirical evidence from countries’ experiences, or both.  Once you have a deep understanding of the economics involved, you will be in a much better position to make informed statements and choices.  Conversely, you cannot succeed in writing a good paper for this course without having a good grasp of both the economic models and the evidence.

 

You should obtain a copy of the textbook by Paul Krugman and Maurice Obstfeld, International Economics: Theory and Policy, 6th edition, 2003, Addison & Wesley (abbreviated K&O). Although my lectures will be self-contained, it will be useful to review material. Another useful book is Has Globalization Gone Too Far? by Dani Rodrik, 1997, Institute for International Economics, of which I will assign individual chapters.

 

In the final weeks of the course, students will present their research papers on topics related to this course. The grading will be based on the paper itself (40%), the presentation of the paper (20%), response to criticism (20%), and general class participation (20%).

 

 

Aug 23                         Introduction & “Life and Debt”, Part I

 

Aug 25                         “Life and Debt”, Part II, and Jamaica’s post-WW II economic performance in perspective

 

Aug 30- Sept 1            Gains from trade and specialization: why a small country can benefit from trade

                                    K&O, Chapter 2

 

Sept 6 – Sept 8            Import protection and import substitution: Jamaica’s trade policy before the 1980s

                                    K&O, Chapter 8, 10

 

Sept 13                        Preferential market access: Jamaica’s banana exports to Europe

                                    K&O, Chapter 9

 

Sept 15 – Sept 20        Agricultural imports liberalization: the effects of European and US milk powder subsidies in Jamaica

                                    K&O, Chapter 8

                                    Oxfam Briefing Paper # 31, at www.oxfam.org

 

Sept 22 – Sept 29        Distribution of the gains from trade: Jamaican producers versus consumers, and demand for protection in rich countries

K&O, Chapter 4

Rodrik, Chapter 2

 

Oct 4 – Oct 6               Foreign debt and the current account: how devaluations affect Jamaica’s solvency

                                    K&O, Chapter 12

 

Oct 11                         Finance, institutions, and the investment climate: what lies behind high interest rates, part I

 

Oct 13                         Email paper topic to Wolfgang.Keller@colorado.edu NO CLASS

 

Oct 18                         Finance, institutions, and the investment climate: what lies behind high interest rates, part II

 

Oct 20 – Oct 25           Foreign direct investment: Causes and consequences

                                    K&O, Chapter 7

 

Oct 27                         Non-economic goals: costs and benefits

                                    Rodrik, Chapter 3

 

Nov 1                          Autarky versus Integration: which road leads to economic self-determination?

 

Nov 3- Dec 6               Presentations and Discussion of up to 3 student papers 

 

Dec 8                           Final thoughts