Political Economy. POL3103, Fall/ 2014

Transcription

1 Political Economy POL3103, Fall/ 2014 Instructor: Prof. Kang, Myung-koo Class Time/Place: M/W, 4:10~5:25// VC8-155 Office: VC Office hours: M/W, 5:30~ 6:20, or by appointment / Phone: / (O) Course Description The course examines the interaction between states and markets in macroeconomic policy formulation and implementation, both in theory and in practice, linking classic works on political economy with current policy debates. We will, first, review three major theoretical paradigms in political economy liberalist, Marxist, and statist and explore key topics in international and domestic political economy: (1) the origins and evolution of global financial system; (2) the origins and evolution of the international trade (GATT) system. Responding to students growing intellectual demand on finance, this course will review more extensively on the origins and evolution of global financial system, especially focusing on the rise of the Bretton Woods system after World War II and its collapse, financial globalization and crises, and government s macroeconomic policy responses to crises. Learning Goals This course has four main leaning goals. If students read the assigned readings and follow lectures and discussions in class sincerely, students will be able to understand the following four topics: First, the core theoretical content and evolution of three classic views in political economy Second, the origins and evolution of the modern global financial system and the current context of global financial crises Third, the origins and development of multilateralism, regionalism, and bilateralism in global trade and the current major trade-related issues Fourth, the structural problem of global imbalances and macroeconomic policy challenges the nation-state system and each nation-state have confronted in an era of globalization Prerequisites ENG 2100 or equivalent and ECO 1001 or 1002 or departmental permission. Class Format This class will be a mixture of lecture and discussion. The instructor will give lectures first and then lead discussions based on the assigned readings or other relevant topics for each class. 1

2 Grading Formula Early-term 15% Mid-term 20% End-term exam 25% Attendance & Class participation 10% One research paper 30% Students are expected to read the assigned reading critically and play an active role in class discussions. 10% of final grade will depend on students participation in class discussions. Grading Policy Grading will be based on a curse system. 30 percent of enrolled students will get A or A-, 50 percent of students B+, B, or B-, and 20 percent of students below B-. Considering students performance in class, the scores in the mid-term and the end-term exam, if the instructor feels that the distribution needs to be re-adjusted, it will be announced before the end of the last class. If not, the original grade distribution rule will be applied. A % A % B % B 83-86% B % C % C 73-76% C % D % D 63-66% D % F 0-59% Policy Regarding Make-up Exams No make-up exams will be provided, except the cases of unavoidable medical emergences or accidents. All exceptions should be proved by a written document. But note that what qualifies as a valid excuse is at the discretion of the instructor. You should make arrangements or at least or voic me in advance. Failure to comply with this requirement will lead to an F for the exam. Classroom Behavior Rules Classroom is not a living room, dining room, or bedroom. Any of personal talking to each other, eating, or sleeping is not allowed, except drinking beverages such as water or coffee. If the instructor detects any such kinds of behaviors, the instructor can ask such students to leave the classroom. No mobile texting or checking s in the middle of the class is allowed. Please turn off your mobile phone or make it sure to a silent mode during the class. If students violate this rule, the instructor can ask students to leave the classroom immediately. Laptop or IPAD or other electronics will not be allowed. If students need to leave the classroom in the middle of class session, students should notify the instructor in advance before the class. If students leave the classroom without prior notice, his/her attendance will be counted as absence. 2

3 Attendance and Lateness Policy If students skip more than 4 times, participation grade will be F. If students skip more than 6 times, meaning from the 6 th absence, the course grade will be F. Class absence will be excused only if students have a valid and documented excuse. Note that what qualifies as a valid excuse is at the discretion of the instructor. Students should notify the instructor before the class. is most preferred. If the instructor does not reply to student s within 24 hours, send it again. Lateness policy: If students are late to the class more than 20 minutes, it will be counted as absence. Also, if students are late to the class more than 20 minutes, it is strongly encouraged not to come in the classroom, not to interrupt the class. Paper Assignment Students are required to write an at least 10 page (double spaced, 12 point font) research paper [excluding references] as to government s macroeconomic policy measures such as monetary or fiscal policy in response to the global financial crisis of Students can choose the case country, for example, the United States, the European Union (or member countries), Japan, China, or other countries. Paper topic approval: Before finalizing the research topic and country, students need to post their research paper topics on the course website on the Blackboard [Discussion section] and need to get instructor s approval by the end of October. Students are strongly encouraged to have face-to-face discussions regarding their research paper topic during regular office hours or after classes. Submission: All research papers should be submitted to the course website at which the instructor will create in November. Papers are due by Dec. 18. Detailed grading rubrics of paper will be announced in November as well Course Readings #Required reading: John Ravenhill, Global Political Economy (Oxford Univ. Press, 4 th edition, 2014) Additional reading materials will be posted on the Blackboard course site. If you have any questions about your Baruch address or your password, or if you have any problems accessing the site please call the computer helpdesk at Students with disabilities Students with disabilities may be eligible for a reasonable accommodation to enable them to participate fully in courses at Baruch. If you feel you may be in need of an accommodation, please contact the Office of Services for Students with Disabilities at (646) The student who wants to get auxiliary aids and services, and need appropriate academic accommodations with disabilities must provide documentation of disability to the Director of Disability Services and get registered. If not, no special accommodations with disabilities will be provided. 3

4 Academic Dishonesty Issues Cheating and plagiarism are serious offenses. The following definitions are based on the College's Academic Honesty website: Cheating is the attempted or unauthorized use of materials, information, notes, study aids, devices or communication during an academic exercise. Examples include but are not limited to: Copying from another student during an examination or allowing another to copy your work Unauthorized collaborating on a take home assignment or examination Using unauthorized notes during a closed book examination Using unauthorized electronic devices during an examination Taking an examination for another student Asking or allowing another student to take an examination for you Changing a corrected exam and returning it for more credit Submitting substantial portions of the same paper to two classes without consulting the second instructor Preparing answers or writing notes in a blue book (exam booklet) before an examination Allowing others to research and write assigned papers including the use of commercial term paper services Plagiarism is the act of presenting another person's ideas, research or writing as your own, such as: Copying another person's actual words without the use of quotation marks and footnotes (a functional limit is four or more words taken from the work of another) Presenting another person's ideas or theories in your own words without acknowledging them Using information that is not considered common knowledge without acknowledging the source Failure to acknowledge collaborators on homework and laboratory assignment My policy is to give a failing grade to any assignment that has been plagiarized or an exam in which you have cheated. In addition, I am required by College policy to submit a report of suspected academic dishonesty to the Office of the Dean of Students. This report becomes part of your permanent file. 4

5 * Required readings # Recommended readings or documentaries 9/3: Introduction What is political economy? What topics will be covered in the course? *Global Political Economy (GPE), ch.1 The study of global political economy I. Rival Views on Markets and States 9/8: Liberalist Paradigm (1): The moral foundation *Smith, Adam (1759). The Theory of Moral Sentiments. Part. I Ch.I~V #Sandel, Michael J. (2013). Market Reasoning as Moral Reasoning: Why Economists should Re-engage with Political Philosophy, Journal of Economic Perspectives 27(4): #Hirschman, Albert O. (1982). Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble? Journal of Economic Literature XX: /10: Liberalist Paradigm (II): Self-Interest, Free Market, and Market-Equilibrium *GPE, ch.2, section on liberalism *Friedman, Milton (1993). Why Government is the Problem Hoover Institution. #Smith, Adam (1976). An Inquiry into the Nature and Causes of the Wealth of Nations: Book I- Ch. 1 (of division of labor), Book IV Ch.I (Of he principle of the commercial or mercantile system) & Ch.VIII (Conclusion of the mercantile system) #Hayek, Friedrich (1944). The Road to Serfdom: & #Friedman, Milton (1962). Capitalism and Freedom: /15: Marxist Paradigm: Class Struggle and Mode of Capitalist Production * GPE, ch.2, section on Marxism *Marx, Karl, The Capital: A Critique of Political Economy, Vol.1: Chapter 1 Commodities ( 9/17: Variants of Marxist view (World System Theory, Dependency Theory) *Hilferding, Roudolf (1910). Finance Capital: A Study in the Latest Phase of Capitalist Development ch.23 & 24. (available at #Wallerstein, Immanuel (1974 & 2011). The Modern World-System I: pp /22: Statist Paradigm: Mercantilism & the State *List, Friedrich (1916). The National System of Political Economy: Ch.XII (The theory of the powers of production and theory of values) ( 315&Itemid=27) 5

6 *Gerschenkron, A. (1962), Economic Backwardness in Historical Perspective: #Johnson, Chalmers (1982), MITI and the Japanese Miracle: Conclusion: # Önis, Z. (1991). "The Logic of the Developmental State." Comparative Politics 24(1): #Pincus, Steve. (2012). Rethinking Mercantilism: Political Economy, the British Empire, and the Atlantic World in the Seventeenth and Eighteenth Centuries. The William and Mary Quarterly 69 (1): /24: No Class 9/29: Cooperation and Conflicts in the Global Political Economy * GPE, Ch.3 (pp.50-73) 10/1: Domestic Sources of Foreign Economic Policies *GPE, Ch.4 (pp ) 10/6: Early Term exam II. The Origins and Evolution of Global Financial System 10/8: The Global Financial Crisis: Where did it come from? *Documentary: Inside Job (wathcing in class) #U.S. Congress (2011). The Financial Crisis Inquirty Report ( 10/13: No Class (Columbus day) 10/15: Gold Standard, Great Depression, and Inter-War Conflicts *GPE, Ch. 7 (pp ) #Eichengreen, Barry. (1998). Globalizing Capital: A History of the International Monetary System. Princeton, N.J.: Princeton University Press: ch.2 & ch.3: pp #Eichengreen, B. J. (2004). Capital Flows and Crises pp #Documentary: Ascent of Money (PBS): Part 3 & 4 10/20: The Origins of the Bretton Woods System *GPE, Ch. 7 (pp ) #Bordo, Michael D., Barry J. Eichengreen, and National Bureau of Economic Research. (1993). A Retrospective on the Bretton Woods system : lessons for international monetary reform: pp

7 #Ikenberry, John G. (1993), The Poltical Origins of Bretton Woods Bordo et. Al: pp #Eichengreen, Barry. (1998). Globalizing Capital: A History of the International Monetary System. Ch.4. 10/22: The Collapse of Bretton Woods System and Aftermath *Eichengreen, Barry (2011). Exorbitant Privilege: The rise and fall of the dollar and the future of the international monetary system. Ch. 6 Monopoly no more #Garber, Peter (1993), The Collapse of the Bretton Woods Fixed Exchange Rate System, Bordo et. al : #Eichengreen, Barry. (1998). Globalizing Capital: A History of the International Monetary System. Ch.5: /27: The Political Economy of Global Financial Crisis *GPE, Ch. 8 (pp ) 10/29: Governance of Economic Globalization; Trilemma *Rodrik, Dani. (2011). The Globalization Paradox: Ch.9 *GPE, Ch.10 (pp ) #Stiglitz. J.E. (2012). The Price of Inequality. Ch.1 #Rodrik, Dani. (2007). One economics, many recipes : globalization, institutions, and economic growth: pp #Joseph E. Stiglitz. (2008). The Future of Global Governance, in Serra & Stigltiz (2008): pp /1: Eurozone crisis (I): Origins *Vallante, Deigo (2011). The Eurozone debt crisis: From its origins to a way forward. CEPS Policy Studies #Mourlon-Druol, Emmanuel (2011). The Euro Crisis: A Historical Perspective. LSE Ideas #Mahnkopf, Birgit (2012). The euro crisis: German politics of blame and austerity- A neoliberal nightmare International Critical Thought 2(4): /5: Eurozone crisis (II): Evolution and Current Challenges *Kirkegaard, Jacob Funk (2011). The Euro area crisis: origin, current status, and European and US responses. Congressional testimony. #Hall, Peter (2012). The Economics and Politics of the Euro Crisis German Politics 21(4): /10: Austerity vs. Expansion: Policy Responses to Financial Crises *Blanchard, Romer, and et. al, ed.(2012). In the Wake of the Crisis: Leading Economists Reassess Economic Policy. Ch.1 (monetary policy in the wake of the crisis) & ch.5 (fiscal stimuli and consolidation). #Hirshman, Albert.O. (1992) Exit and Voice: An Expanding Sphere of Influence Rival Views of Market Society: #Stiglitz, Joseph E. (2002). Globalization and Its Discontents. 7

8 11/12: Global Imbalances *GPE, Ch. 12 (pp ) *Dunaway, Steven. (2009). Global Imbalances and the Financial Crisis. Council on Foreign Relations Press. #Obstfeld, Maurice (2012). Liqudity and the International Monetary System in Blanchard, Romer, and et. al, ed.(2012). In the Wake of the Crisis: Leading Economists Reassess Economic Policy. #Eichengreen, Barry. (2006). Global imbalances: The new economy, the dark matter, the savvy investor, and the standard analysis. Journal of Policy Modeling 28 (6): /17: Mid-term Exam 11/19: The Washington Consensus: The role of the IMF & the World Bank group *GPE, Ch.13 (pp ) #Weisbrot, Mark, Jose Cordero and Luis Sandoval (2009). Empowering the IMF: Should Reform be a Requirement for Increasing the Fund s Resources? Center for Economic Policy and Research #Meltzer, Allan H. (2011). The IMF Returns Review of International Organization. 6: #Serra, Narcís, and Joseph E. Stiglitz. (2008). The Washington Consensus Reconsidered : Towards a New Global Governance: pp ( A short history of the Washington Consensus ) #Birdsall, Nancy & Francis Fukuyama (2011). The Post-Washington Consensus: Development After the crisis Foreign Affairs 90(2): III. The Evolution of International Trade Regime 11/24: The Formation of GATT system and Its Evolution *GPE, Ch. 5 (pp ) #Goldstein, Judith (2006). The Evolution of the Trade Regime: Politics, Law and Economics of the GATT. Princeton Univ. Press: Ch.1 #Harvard Law Review Association Free Trade and Preferential Tariffs: The Evolution of International Trade Regulation in GATT and UNCTAD Harvard Law Review 81 (8): #Moore, Patrick M The Decisions Bridging the GATT 1947 and the WTO Agreement. The American Journal of International Law 90 (2): /26: World Trade Organization: Birth and Functions *GPE, Ch. 6 (pp ) #Goldstein, Judith (2006). The Evolution of the Trade Regime: Politics, Law and Economics of the GATT: Ch.2 & Ch.3 8

9 #Gowa, Joanne (2010). Alliances, market power, and postwar trade: explaining the GATT/WTO World Trade Review, 9, pp #Wallace, Taylor. (2010). Most Favoured Nation Treatment and WTO Dispute Resolution. Journal of Contemporary Legal Issues 19 (1): #Crowley, M.A., An Introduction to the WTO and GATT, 2003 Economic Perspectives, 4 th Quarter 2003, Federal Reserve Bank of Chicago. 12/1: Regionalism (1): European Union & NAFTA *GPE, Ch. 6 #Mattli, Walter (1999). The Logic of Regional Integration: Europe and Beyond Cambridge Univ. Press: Ch.2 & 4 Integration in Europe #Molchanov, Mikhail A. (2005). Regionalism and Globalization: The Case of the European Union. Perspectives on Global Development & Technology 4 (3/4): # Official portal of EU website ( # Official portal of NAFTA ( 12/3: Regionalism (II): ASEAN & MERCOSUR *Freund, C. & Ornelas E. (2010). Regional Trade Agreements World Bank Policy Research Working Paper No # Official portal of ASEAN ( # Official portal of MERCOSUR ( 12/8: Free Trade and the Role of the State: The Compensation Hypothesis? *Rodrik, D. (1997). Has Globalization Gone Too Far? : Ch.4 Trade and the Demand for Social Insurance #Cooper, W. H (2010). Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy. CRS Report #Bhagwati, Jagdish N. (1988). Export-Promoting Trade Strategy: Issues and Evidence. The World Bank Research Observer 3 (1): IV. Future Prospects 12/10: The Rise of China and Its Potential Impacts on Global Political Economic Order *GPE, Ch.11 (pp ) *Ikenberry, john (2008). The Rise of China and the Future of the West: Can the Liberal System Survive? Foreign Affairs, 87(1) #Glaser, Charles. (2011). "Will China's Rise Lead to War?" Foreign Affairs #Walt, Stephen M. (2011). The End of the American Era, National Interest #Brzezinski, Zbigniew (2012). Balancing the East, Upgrading the West: U.S. Grand Strategy in an Age of Upheaval, Foreign Affairs 91(1) 12/15: End-term Exam 9

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11 The list of recommended books Acemoglu, Daron, and James A. Robinson. (2012). Why Nations Fail : The origins of power, prosperity and poverty. Arrighi, Giovanni. (2007). Adam Smith in Beijing : lineages of the twenty-first century. Chomsky, Noam. (1999). Profit over people : neoliberalism and global order. Eichengreen, Barry (2011). Exorbitant Privilege: The rise and fall of the dollar and the future of the international monetary system Friedman, Milton (1962). Capitalism and Freedom Gilder, George F. (2012). Knowledge and power : the information theory of capitalism and how it is revolutionizing our world. Hayek, Friedrich (1944). The Road to Serfdom Jones, Daniel Steman (2012). Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics Keynes, John Maynard. (1936). The general theory of employment, interest and money. Klein, Naomi. (2007). The shock doctrine : the rise of disaster capitalism. Krugman, Paul R. (2012). End this depression now! List, Friedrich (1916). The National System of Political Economy Marx, Karl (1867). The Capital. (Vol.1) Polanyi, Karl. (1944). The Great Transformation. Reich, Robert B. (2012). Beyond outrage : what has gone wrong with our economy and our democracy, and how to fix it. Reinhart, Carmen M., and Kenneth S. Rogoff. (2009). This Time Is Different: Eight Centuries of Financial Folly. Rodrik, Dani. (2011). The Globalization Paradox Roubini, Nouriel, and Stephen Mihm. (2010). Crisis Economics: A Crash Course in the Future of Finance. Schumpeter, Joseph Alois. (1947). Capitalism, socialism, and democracy. Sen, Amitiya. K. (1999). Development as Freedom Smith, Adam (1759). The Theory of Moral Sentiments Smith, Adam (1976). An Inquiry into the Nature and Causes of the Wealth of Nations Stiglitz, J. E. (2006). Making globalization work. Stiglitz, J. E. (2010). Freefall : America, free markets, and the sinking of the world economy. Stiglitz. J.E. (2012). The Price of Inequality 11