To understand globalization the social process in terms of globalism the ideology.

Transcription

1 Course Syllabus Bilbao, Spain Global Economics COURSE INFORMATION: ECON credits 300-level 45 contact hours Professor: Michael L. Miller m.miller@kzgunea.net TEXTBOOKS & COURSE MATERIALS Hill, C. Global Business Today. McGraw-Hill/Irwin, 8th edition (2014). ISBN: Materials are NOT available at the program site. Purchase before departure. DESCRIPTION This class provides a nice introduction to some of the debates economic, but eventually political about Globalization. The global monetary system and the debate swirling around international trade theory NTT and STT will be covered, but alas, not resolved. How companies can use this knowledge to enter global markets is discussed in the interim. Regional Economic Areas will be covered, including, the EU, NAFTA, UNISUR, APEC, etc. Finally, the theories and debates about international trade are reviewed again, but this time from the foreign direct investment (FDI) perspective indeed, isn t money just another product to be traded? OBJECTIVES To compare and contrast the advantages and disadvantages of the different types of global monetary systems available, and systems within system possibilities. To introduce the possibility game theory matrix that visible hand government subsidies might trump invisible hand randomness. (Planning for certain outcomes especially in promoting exports, international trade and even, FDI preferences, might be rational.) To discover the strategies available to firms exporting, Countertrade, FDI, etc to take advantage of the present panorama, despite political economy hurdles instituted by some nations and why culture matters, especially in consumption patterns. To understand globalization the social process in terms of globalism the ideology. EXPECTED STUDENT OUTCOMES At the end of the course students should be able to Defend either position about global monetary system choices, that is, fixed or flexible exchange rate regimes, but with the acknowledgement that no successful fixed exchange rate system has ever been devised, but many tried... good luck to the Euro. Explain the role of the US dollar not only as a domestic store of value but also as the de facto international reserve currency Outline the theories that explain not only the benefits of trade absolute advantage and comparative advantage but also the patterns of trade historical and perhaps future. Recognize the limits of free trade arguments when dealing with sovereign governments who decide their own political economy by using historical and cultural arguments. Distinguish between New Trade Theory and Strategic Trade Policy using the Brander- Spencer game theory payoff matrix

2 Appreciate the inherent profits in oligopolistic competition, especially certain products where the whole world s demand might only justify a few suppliers and therefore, even government intervention/protection, mentioning the Infant Industry argument Differentiate between economies of scale potential and return to scale problems should sales volume increase too fast when companies decide to go global Give examples of sunrise industries and sunset industries Explain the three accounts in a country s Balance-of-Payments Explain the term Foreign Direct Investment in terms of M&A s and Green-field Ventures and private and public portfolio investment such as buying sovereign treasury bonds Appreciate the reasons for and against creating Regional Economic Areas as simple as NAFTA and as complex as the EU Explain good and bad effects of globalization in terms of economic winners and losers Use philosophical references when making a business decision that might involve the application of more-than-one ethical framework or school of thought. OUTLINE Dates Topic Read Homework 9-4 Syllabus: Introduction and Class Expectations Learn the terms in the margins of the pages Pay attention to some of the discussion questions Ch. 3 Complete 9-9 History and Geography: Foundations for Cultural Empathy Ch. 2.1 p Social Structures, Religious and Ethical Systems Hofstede's Model and the Future: A Clash of Civilizations? Country Differences in Political Economy, part 1 Choosing from political, economic and legal systems Intellectual property, product safety and product liability Ch. 2.2 p Country Differences in Political Economy, part 2 Conditions that Favor Economic Development Problems defining economic development the U.N. s HDI The Global Monetary System, part 1 Bretton Woods ends the Golden Rule The IMF, the World Bank and SDRs The Global Monetary System, part 2 Fixed or Floating Exchange Rates: Better? Worse? E-R Regimes in Practice: Is a Hegemon a necessary evil? The Foreign Exchange Market, part 1 Spot Rate and Forward Rates, Arbitrage and Hedging Exchange Rate Valuation Theories: PPP/Burgernomics The Foreign Exchange Market, part 2 Interest vs. Exchange Rates; the (International) Fisher Effect Exchange Rate Forecasting and Currency Ch C.S. due on 9-18 Egypt p Ch p Ch. 9.1 C.S. due on 9-25 Argentina p Ch. 9.2 p Ch. 5.1 p

3 10-16 Convertibility International Trade Theory, part Years of Trade and the Evolution of Trade Theory Mercantilism; Absolute, Comparative Advantage; Resources International Trade Theory, part 2 PLC, NTT vs. STT and Nat l Competitive Advantage Brander-Spencer Matrix, Airbus-Boeing rivalry, Launch Aid The Political Economy of International Trade, part 1 Instruments of Trade Policies Political Economy in action Beef Hormones (USA vs EU) and Free Trade vs. Fair Trade The Political Economy of International Trade, part 2 The Global Trading System GATT to the WTO Why agriculture make new trade agreements more difficult Ch. 5.2 Ch. 6.1 Appendix A Balance of Payments p C.S. due on 10-9 Global Food Prices p Ch. 6.2 p Review everything Prepare for MT Midterm 1 Ch. 2, 3, 5, 6, 9, 10 Ch. 11 Complete How to Develop a Global Strategy theoretical choices Creation of value, Learning Curves and Economies of Scale Strategic Choices and Strategic Alliances Ch. 12 C.S. due on General Electric Complete How to Enter Foreign Markets Basic Entry Decisions: Where? When? Methods of Entry: How? Level of commitment? Control? Exporting, Importing and Counter-trade Exporting Promises and Problems Export Documents, Incoterms and Counter-trade examples Global Marketing and Product Development, part 1 Global Brands and Market Segmentation Product Adaptation and Distribution Global Marketing and Product Development, part 2 Communication and Prices Marketing to the Bottom of the Pyramid (C. K. Prahalid) Ch. 13 Complete Ch p Ch p Review everything Prepare MT Midterm 2 Ch. 11, 12, 13, 15, including an essay Ch. 7.1 p Foreign Direct Investment, part 1 The Impact of FDI on the Global Economy Global Patterns of FDI and the Free Market View Ch. 7.2 C.S. due on Spain s Telefónica p

4 Foreign Direct Investment, part 2 Costs and Benefits of FDI to the Nation-State FDI and Government Policy Instruments Ch. 8.1 p Regional Economic Integration, part 1 Levels of Integration simple NAFTA or complex EU? Ch. 8.2 p Regional Economic Integration, part 2 Other Groups: ASEAN, UNISUR, ECOWAS, etc. Ch. 1 Complete Globalization vs. Globalism vs. Globality vs. Globaphobia Ch. 4 Complete 12-4 Ethics Is there really a market for virtue? (D. Vogel, UC-B) Final Exam Ch. 1, 7, 8, including an essay 1, 7, 8 Prepare Final Good Luck Season s Greetings GRADES TWO CASE STUDIES to complete as homework assignments. They serve as mini-group projects, 4-6 students. One C.S. from the first two class areas on the already mentioned dates in the study plan-homework area. Each is worth 5% toward the Final Mark. Midterm 1 is worth 40% of your Final Grade and Midterm 2 and the Final are each worth 25%. The Standard Grade Scale is in force. A C A C B D B D B D C F Attendance is clearly expected for all classes. Don t arrive late. Arriving late five times is the same as an absence. Arriving more than 30 minutes late will be considered an absence don t double-dip. Multiple absences result in a lower grade, or even failing the class. There are NO Make-Up Exams. Reading Assignments are to be prepared before the class. Don t get caught unprepared. People will be called upon at random. Don t forget the 1:2 study-ratio. Productive Participation usually settles a borderline case between a C+ and a B-. ACADEMIC HONESTY POLICY: All USAC Policies regarding Academic Honesty will be followed in this class. If you have questions regarding these policies, please contact the instructor or consult the university s pamphlet entitled, Policies and Procedures on Academic Honesty (

5 DISABILITY POLICY: Every effort will be made to accommodate students with disabilities or special learning needs. If you have a documented disability for which you have already requested accommodations through the USAC Central office, your instructor will have been notified so that arrangements can be made early in the term. STATEMENT ON AUDIO AND VIDEO RECORDING Surreptitious or covert video-taping of class or unauthorized audio recording of class is prohibited by law and by USAC policy. This class may be videotaped or audio recorded only with the written permission of the instructor. In order to accommodate students with disabilities, some students may have been given permission to record class lectures and discussions. Therefore, students should understand that their comments during class may be recorded.