International Economics and European Economic History Pier Francesco Asso, Università di Palermo Francesco.asso@unipa.it www.francescoasso.wordpress.com 9 credits; Wednesday-Thursday: 8-10, Collegio San Rocco
Reading list, lectures and presentations 3 blocs of lectures --- 6 Papers --- 6-7 weeks of lectures Bloc 1. Inequalities, poverty, quality of institutions and long term growth 1. Acemoglou; 2. Franzini and Pianta; Bloc 2. The costs and benefits of globalization: financial markets and LDC 3. Rodrik; 4. Asso (or Levy-Shangquan). Bloc 3. European Integration: the Euro crisis and the European Single Market 5. Anand, Gupta, Dash; 6. Marinello, Sapir, Terzi Students presentations, 2-3 weeks Class presentations on a specific topic. Groups of 2-max 3. Possible arguments: Economic crisis; European reforms; Trade; Energy; Migration + Refugees; Poverty; Internationalization of firms; Cooperation; Crime; Country studies (US, China, Brexit, etc.)
Some useful things to know before we start What about the teacher? Visit and use his blog: www.francescoasso.wordpress.com What for? Find some useful materials (papers, slides, previous tests etc.) Put questions on previous lectures or other topics Send your own answer to previous tests Find info about the teacher and his (research) activities What about the intermediate test? yes! Devoted to the first part of the course (3 papers) when? in mid-april. Date TBA What about the value of the presentation? Bonus from 0 to 3 points added to the intermediate and final test. Other issues? Please write (on the blog)
Background knowledge Good knowledge of the language Some knowledge of the basics of International Economics Some knowledge of economic and European history What about if you don t have any? Some suggested readings Please, don t be shy and ask your teacher Remember: the real issue at stake, the real challenge is to acquire a wider knowledge of how things go out there, rather than read and learn some slides
Syllabus of the course (bloc 1) Growth, Institutions, Inequalities What world our grandchildren will inherit? (Acemoglou-Robinson) 10 past trends of main macro aggregates for the last 100 years (growth, trade, inequalities, integration, etc. -) What are the main engines of growth? (economic and non-economic) What is the role of institutions, politics, culture, social phenomena etc.? Clash between inclusive and extractive institutions may explain the future of economic fundamentals The making and relevance of inequalities (Franzini and Pianta) The longtime neglect of inequality, that has now become a burning issue? How do we measure inequality? Main trends of inequalities in comparative perspective. Some possible explanations of inequalities Inequalities in wealth and income
Syllabus of the course (bloc 2) The economic theory of globalization and LDCs (Rodrik+Asso) History of the the concept. Causes and main trends Distinction #1: real globalization vs financial globalization Distinction #2: Costs vs benefits of RG and FG Some general introduction to the history of global institutions (Gatt, Wto) Burning issue #1: the disappointment of FG Burning issue #2: the disappointing consequences of globalization for LDC Burning issue #3: failure of policies to reduce the dangers of globalization (Tobin tax etc.) Burning issue #4: globalization and the rise of populism
Syllabus of the course (III) The European crisis: the Euro and the Single Market EURO (1999-2013) (Anand) Origins of the EMU. History, theory, treaties etc. Discussions of pros and cons of the single currency Main features of the Euro crisis (2011-2012) Possible ways out (euro exit, institutional reforms etc.) The SINGLE MARKET PROCESS (1980s today (Sapir) Theoretical reasons for building a single market Estimates of its impact + results of its implementation Reasons for disappointment and things to do
Some Keywords Some Topics Growth and Development in Historical Perspective Globalization and Integration in Economic History and Theory International Financial Crisis Some Figures From Factories to Finance: high credit leverage and low real investment Europe: benefits and shortcomings
GDP Growth, 2007-2017 for major areas
Real GDP relative to 2006 selected areas
GDP trends, 2000-2018: Eu, US, G7
Italy: a case of double dip. Recession ended only in 2014; Recovery has a slow pace
Italy: crisis or long term economic decline
Italy, real GDP p.c., 1980-2010 stagnation and decline
Italy vs US. From the postwar «miracle» to the decline
The great regional divide: Ypc (townhalls, 2014) BIG CITIES Milano 29.803 Bologna 24.793 Roma 24.555 Firenze 23.681 Torino 22.267 Venezia 21.811 Genova 21.757 Bari 20.086 Napoli 19.730 Palermo 19.387
China vs The US
Income Inequality in Historical Perspective
Wealth inequalities are growing
The most important graph in the world: the elephant graph
How was it possible? How could it happen? Who is to be blamed? Some interpretations 1. Finance. Excessive growth of financial markets (fragility, inefficiecy, deregulation, abuses etc.) 2. Global imbalances (external disequilibria no growth: savings glut ) 3. Inequalities (against the poor; the middle class; wage earners etc.) 4. Globalization. Excessive, against more acceptable forms of integration 5. Policy. Policy failures (monetary, economic, taxation, etc.) 6. Europe. Many institutional failures Good or bad marriage? 7. Structural and human factors (technology, communication, demography, fraud, corruption, conflicts of interest etc.)
Some general trends, recent years GDP trends. GDP per capita Trade Unemployment Inequalities
GDP (% world) 35 30 25 20 15 2000 2013 2018 10 5 0 Euro area United States BRICS Fonte: World Economic Outlook Database, October 2013
GDP (% world) 8 7 6 5 4 3 2000 2013 2018 2 1 0 Canada France Germany Italy Japan United Kingdom Fonte: World Economic Outlook Database, October 2013
Italy: double dip; decline, slow growth
Italian economic decline in historical perspective
Collapse of trade
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 GDP per capita: Eu divergence vs non Eu convergence 120 125 115 110 105 100 95 120 115 110 105 100 95 90 90 France Germany Italy Japan United Kingdom United States Fonte: World Economic Outlook Database, October 20135
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Unemployment rate (%) 14 12 10 8 6 4 2 12 10 8 6 4 2 0 0 Canada Japan France Germany Italy United Kingdom United States Fonte: World Economic Outlook Database, October 20135
Inequalities and globalization The biggest losers (other than the very poorest 5%), or at least the 'non-winners,' of globalization were those between the 45th and 90th percentiles of the global income distribution whose real income gains were essentially nil. "These people, who may be called a global middle class, include many from former Communist countries and Latin America, as well as those citizens of rich countries whose incomes stagnated. Moral of the graph: middle and working classes in developed countries languished
Economic freedom and economic growth