Overview of the economic problem

• Greg Ip, "Defense of the Dismal Science," Wall Street Journal, August 25, 2017 -- For Class Discussion

• What is economics?

• Economic Exchange

• The Economic Problem

• Production Possibility Frontiers

• Economic Growth

• Economic Systems

Markets -- Demand and Supply

• Demand and Supply --MOST IMPORTANT READING

• Price Mechanism

• Consumer Demand

• Demand Curves

• Demand and Income

• Shifts in Demand

• Producer Supply
  Shifts in Supply

• Market Equilibrium

• Non-Market Price, Artificial Prices

Applications, and Current Events for Discussion

• David Henderson, the Negative Effects of the Minimum Wage, National Center for Policy Analysis, May 4, 2006 -- BEST OF THE MINIMUM WAGE PAPERS

• Alan Manning, Minimum Wages in an Election Year Milken Institute Review, September 12, 2016

• Brian Asquith, Rent Control: Affordable Housing's Dubious Solution, Milken Institute Review, April 26, 2019

Optional -- Alternative explanations/illustrations of basic concepts

• Eggert Chapter 1 What is Economics -- Good discussion of the production possibility curve

• Eggert Chapter 11 Demand -- Good discussion of the basic tools of demand theory

• Further Topics in the Theory of Consumer Demand

• Household Economics and Demand (especially appendix)

MOST IMPORTANT READINGS

• Eggert Chapter 11 Demand -- good overview of utility -- Make sure you read the sections on indifference curves

• Further Topics in the Theory of Consumer Demand -- Very Important Will Discuss in Class

• Consumer and Producer Surplus

• Firm Motives

• Perfect Competition

• Monopoly

• Natural Monopoly

• Oligopoly

• Game Theory

• Game Theory-- Nash equilibrium

• Cartels

Applications, and Current Events for Discussion

• The Problem With Large Companies, Economist, September 17, 2016

• Ed Dolan, China's Fragile Rare Earth Monopoly, October 23, 2010

• Robert McNally and Michael Levi, A Crude Predicament, Foreign Affairs, July/August 2011 MIDTERM QUESTION

• Shocks and ores Short-term gyrations in commodity prices may do more damage than long-run trends Economist, Jun 8th 2013

Optional -- Alternative explanations/illustrations of basic concepts

• Monopolistic Competition

• Price and Output in Perfect Competition

• Contestable Markets

• Monopoly Price and Output

• Oligolopy, Eggert Chapter 17

MOST IMPORTANT READINGS

• Types of Market Failure

• Missing Markets

• Pigovian Taxes -- Interests of individuals and society do not coincide, Economist, August 19, 2017

• Incomplete Markets

• Inefficiencies

• Negative Externalities

• Polution, Carbon and Waste

• Information Failure

• Moral Hazzard

• Unstable Markets/Prices

• Price Stabilization Schemes

Current Events for Class Discussion

Papers for Class Discussion

• Milan Brahmbhatt and Luc Christiaensen, The Run on Rice, World Policy Journal Summer 2008 -- Midterm Question

• Donald Leal, Saving Fisheries With Free Markets, The Milken Institute Review, First Quarter 2006 -- Midterm Question

• Information Assymetry -- Markets for Lemons, Economist July 23, 2016

• Jonathan Caverley and Ethan Kapstein, Arms Away: How Washington Squandered its Monopoly on Weapons Sales, Foreign Affairs, September/October 2012 -MIDTERM QUESTION

Optional -- Alternative explanations/illustrations of basic concepts

• Schools Brief: Missing Markets (Economist, December 18, 1996)

• Schools Brief: State and Market (Economist, February 26, 1996)

• Merit Goods

• Merit Goods Education

• Demarit Goods

• COP21 Paris

• Positive Externalities

• Property Rights

• Depletion of Fish Stocks

• Road Congestion

• Commodity Agreements

• Labor Market Failures

• N. Gregory Mankiw, Can a Soda Tax Save Us From Ourselves? New York Times, June 4, 2010

For Class Discussion

• Claussing, Open, Chapter 1

Most Important Readings

• Trade Model: Extensions and Applications--MOST IMPORTANT READING -- Midterm Question

• Claudia Goldin and Lawrence Katz, The Future of Inequality: the Other Reason Education Matters So Much, Milken Review, Summer 2009, Midterm Question

• Susan Lund, James Manyika and Michael Spence, The Global Economy's Next Winners: What it Takes to Thrive in the Automation Age, Foreign Affairs June 11, 2019 (Sakai under Resources/Foreiegn Affairs) Midterm Question

• Richard Katz, Mutual Assured Production: Why Trade Will Limit Conflict Between China and Japan, Foreign Affairs, July/August 2013

• Free Trade Facts -- good summary of facts surrounding free trade.

• Alan Blinder, The Free Trade Paradox: The Bad Politics of a Good Idea, Foreign Affairs Januaary/February 2019 (Sakai under Resources/Foreiegn Affairs) Midterm Question

• Dani Rodrik, Globalization's Wrong Turn and How it Hurt America, Foreign Affairs July/August 2019 (Sakai under Resources/Foreiegn Affairs) Midterm Question

• Defense of Free Trade: How Free Trade Made America Great, Wall Street Journal, March 28, 2016

• Federal Reserve Bank of Dallas, Distance and the Impact of Gravity Help Explain Patterns of International Trade, July 2011

• Llaura Baughman, Five Myths About Imports, WSJ, May 19, 2014

• Five More Myths About Free Trade Washington Post, April 8, 2016

For Class Discussion

• Claussing, Open, Chapter 2

Most Important Readings

• Michael Porter, Enhancing the Microeconomic Foundations of Prosperity: The Current Competiveness Index (Midterm Question) -- MOST IMPORTANT WILL DISCUSS IN CLASS--Older Version

• Jeffrey Sachs, Globalization and Patterns of Economic Development (Weltwirtschaftliches Archiv (volume 4, 2000) -- Also Very Important Will Discuss in Class -- MIDTERM QUESTION

• Xavier Sala-I-Martin et al., The Global Competitiveness Index: Measuring the Productive Potential of Nations, World Economic Forum, 2007 -- Midterm Question,

Other Readings

• Robert Looney, New Developments on the Rare Earth Front, World Economics, January-March 2011 Midterm Question -- application of Porter Model

• William Bonvillian, Donald Trump's Voters and the Decline of American Manufacturing, Issues in Science and Technology, Summer 2016 ---- Midterm Question

• Richard Katz, China Didn't Take U.S. Jobs, The International Economy, Summer 2016 Midterm questiion

Protectionism -- Tariffs/Non-Tariff Barriers

For Class Discussion

• Claussing, Open, Chapters 3, 4

• Infographic: History of Trade Wars

• Trump's Trade War Timeline, Peterson Institute

• Lee Branstetter, How to Stop China's Technology Heist, Milken Institute Review, April, 2019

• Tom Donilon, Trump's Trade War is the Wrong Way to Compete With China, Foreign Affairs June 25, 2019 (Sakai under Resources/Foreiegn Affairs) Midterm Question

• Andrew Nathan, How China Really Sees the Trade War: Xi Still Believes He Has the Upper Hand Foreign Affairs June 27, 2019 (Sakai under Resources/Foreiegn Affairs) Midterm Question

Most Important Readings

• Daniel Drezner, The Outsourcing Bogeyman Midterm question -- Will Discuss in Class (Foreign Affairs, May/June 2004

• Alan Blinder, "Offshoring: The Next Industrial Revolution?" Foreign Affairs March/April 2006 -- presets a contrasting view to Drezner of outsourcing MIDTTERM QUESTION

• Michael Spence, The Impact of Globalization on Income and Employment: The Downside of Integrating Markets, Foreign Affairs, July/August 2011 MIDTERM QUESTION

Other Readings

• Douglas Irwin, The Truh About Trade: What Critics Get Wrong About the Global Economy, Foreign Affiars, July/August 2016 -- Midterm question

• Douglas Irwin, the False Promise of Protectionism: Why Trump's Trade Policy Could Backfire, Foreign Affairs, May/June 2017 -- midterm question

• Hugo Erken, US Global Value Chain Integration: A Major Impediment for Trump's Protectionist Trade Agenda, Rabobank, June 30, 2017

• Gary Hufbauer and Sean Lowry, US Tire Tariffs: Saving Few Jobs at High Cost, Peterson Institute for International Economics, April 2012 MIDTERM QUESTION

• Robert Looney, U.S. Manufacturing -- in Sakai under resources Europa United States

• Brookings, The Changing Nature of Manufacturing, April 2016

• The US Manufacturing Base: Four Signs of Strength Theodore H . Moran and Lindsay Oldenski, Peterson Institute, June 2014 MIDTERM QUESTION

• Michael Spence et al., New World Order, Labor Capital and Ideas in the Power Law Economy, Foreign Affairs (July/August 2014 --MIDTERM QUESTION

Current events for class discussion

• Economic Consequences of the Trade Policies of the Presidental Candidates, Peterson Institute, September 19, 2016 WATCH THIS ONE FOR SURE

Gary Hufbauer and Jeffrey Schott, Buy American: Bad for Jobs, Worse for Reputation, Peterson Institute for international Economics, February 2009 Midterm Question

Edith Ostapik, International Trade: Why We Don't Have More of It, Federal Reserve Bank of Philadelphia Business review Q3 2007 -- problems in measuring barriers to trade Midterm Question

July 31

Trade Agreements--GATT/WTO

For Class Discussion

• Claussing, Open, Chapters 3, 4

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Most Important Readings

• WTO in Brief -- read for class

• WTO: 10 Benefits -- read for class

• WTO: 10 Misunderstandings -- read for class discuss in class

• Robert Looney, The Cancun Conundrum: What Future for the World Trade Organization, Journal of Third World Studies (Fall 2004) Will Discuss in Class -- MIDTERM QUESTION.

• Fred Hu and Michael Spence, Why Globalization Stalled: And How to Restart It, Foreign Affairs July/August, 2017 MIDTERM QUESTION

• David Dollar and Peter Petri, Why it's time to end the tit-for-tat tariffs in the U.S. China Trade War, Brookings, October 5, 2018 MIDTERM QUESTION

• Adam Posen, Economics-Based Principles for a Post-Conflict China-US Commercial Regime, China & World Economy September 2018 MIDTERM QUESTION

• Jeffrey Schott, What Should the United States Do about Doha, Peterson Institute for Internaitonal Economics, June 2011 --MIDTERM QUESTION

Other Readings

• Greg Rushford, WTO in the Crosshairs, Mlken Institute Review, Quarter 2017

• Greg Rushford, Murder on the Doha Express, Milken Institute Review, First Quarter 2012

• Amrita Narlikar, The Power of the Powerless: The Politics of Poverty at the Doha Round, Foreign Affairs, March 12, 2015

August 5

Security, Global Competition and United States Policy

For Class Discussion

• Rana Foroohar, Globalized Busines is a US Security Issue, Financial Times, July 15, 2018

Most Important Readings

• T. Moran, The Globalization of America's Defense Industries: Managing the Threat of Foreign Dependence (International Security, Summer 1990) -- long, but important for national security issues Most important reading COUNTS FOR TWO MIDTERM QUESTIONS

• Moises Naim, The Five Wars of Globalization -- illegal markets -- Midterm question -- Will Discuss in Class(Foreign Policy) MIDTERM QUESTION

• Moises Naim, Mafia States: Organized Crime Takes Office, Foreign Affairs, May/June 2012 MIDTERM QUESTION

• Daniel Yergin, Ensuring Energy Security, Foreign Affairs, March/April 2006 MIDTERM QUESTION

• Michael Ross, Blood Barrels: Why Oil Wealth Fuels Conflict, Foreign Affairs, May/June 2008 MIDTERM QUESTION

• Theodore Moran, Feeding the Dragon: Is China Trying to Swallow the World's Natural Resources, The Milken Institute Review, Third Quarter 2010 MIDTERM QUESTION

• Interagency Task Force, Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States, September 2018, Chapters V and VI Midterm Question

Other Readings

• Robert Looney Recent Developments on the Rare Earth Front: Evidence of a New Technocratic Mercantilism Emerging in China, World Economics, January-March 2011 MIDTERM QUESTION

• Boston Consulting Group, Made in America, Again: Why Manufacturing Will Return to the United States, August 2011 MIDTERM QUESTION

• Derek Scissors, Free Markets and National Defense: U.S. Import Dependence on China, Heritage Foundation, September 21, 2010 MIDTERM QUESTION

• Tom Donilon, Energy and American Power: Farewell to Declinism, Foreign Affairs, June 15, 2013 MIDTERM QUESTION

• Kym Anderson, How Can Trade Improve food Security in Sub-Saharan Africa? Stanford, January 23, 2012 MIDTERM QUESTION

• Hal Weitzman, Resource Nationalism: Beyond Ideology: The Western Hemisphere and an Old Policy Standby, The Americas Quarterly, January 2013 MIDTERM QUESTION

August 7

Economic Integration -- United States/NAFTA

Most Important Readings

• Stephen Stamos, Reflections on the Proposed US Mexico Free Trade Agreement WILL DISCUSS IN CLASS

• Sidney Weintraub, Scoring Free Trade: A Critique of the Critics -- NAFTA (Current History, February 2004) Midterm

• Jorge Castaneda, NAFTA at 10: A Plus or a Minus? (Current History, February 2004) Midterm

• NAFTA at 20 Ready to take off again? Two decades ago the North American Free-Trade Agreement got off to a flying start. Then it stalled Economist, Jan 4th 2014

• Gary Clyde Hufbauer and Jeffrey Schott, NAFTA's Bad Rap, The Internatioal Economy,Summer 2008 Midterm

• Jeff Schott, USMCA a step backwards, 2018

• Uwe Deichmann, The Economic Geography of Regional Integration, Finance & Development December 2008 -- Exam Question

• Jeff Schott, TPP Origins and Outcomes, 2018 Midterm Question

Other Readings

• NAFTA's Economic Impact, Council on Foreign Relations, July 26, 2016

• The Debate over Brexit, Council on Foreign Relations June 30, 2016

• Richard Katz, Getting TPP Right is Better than Getting it Fast, Foreign Affairs May 12, 2015 -- Exam Question

• Jeffrey Sachs Argument Against the TPP, Boston Globe, October 2016

• Brookings: The Case for the TPP, October 2016 -- Exam Question

  Hina Rabbani Khar, Gated Globalization, in Mark Leonard ed., Connectivity Wars: Why Migration, Finance and Trade are the Geo-Economic Battlegrounds of the Future. Midterm Question

August 12

Current Events for Discussion

• Sam Flemming, US Allies Fear Long-Term Risk of Using Sanctions Like Missiles, Financial Times, August 13, 2018

Most Important -- Sanctions

• Richard Haass, Sanctioning Madness (Foreign Affairs, November/December 1997) -- In Sakai Foreign Affairs Folder Most Important -- Final Exam Question

• Peter Harrell,The Path to Renewed Oil Sanctions on Iran, Foreign Affairs, August 8, 2018 (on Sakai in Foreign Affairs tab) -- Final Exam Question

• Michael Chaitkin, Understanding Sanctions Effectiveness, 2010

  Final Exam Question

• Emma Ashford, Not-So-Smart Sanctions, Foreign Affairs January/February 2016 Final Exam question --- in Sakai, Foreign Affairs folder

August 14

MIDTERM EXAMINATION

August 19

Balance of Payments

Current Events for Class Discussion

• Eduardo Porter What can be done about the trade Deficit New York Times October 18, 2017

Most Important Readings

• CFR, The Trade Deficit: How Much Does it Matter? October 17, 2017

• George Alessandra, Trade Deficits Aren't As Bad as You Think, Federal Reserve Bank of Philadelphia, First Quarter, 2007 -- Final Exam Question

• Deutsche Bank Research, The U.S. Balance of Payments: Wide-Spread Misconceptions and Exaggerated Worries (October 1, 2004)

• Herb Stein, The Balance of Payments

• Alison Butler, Trade Imbalances and Economic Theory: The Case for a US Japan Trade Deficit (Federal Reserve Bank of St. Louis Review, March/April 1991) -- Older, but good link-in with macroeconomics -- Final Exam Question

Other Balance of Payments

• Jeffrey Frankel, America The Balanced, Project Syndicate, October 20, 2014 -- US may actually running a surplus in the current account

August 22

Determinants of Exchange Rates

Current Events for Discussion

• Robert Looney, Build-up to the Turkish Crisis, Milken Institute Review, August 2017

• Steve-Hanke-Turkish-Lira, Wall Street Journal August 13, 2018

• Robert Looney, Venezuela's Crypto-Currency, Milken Institute Review, February 29, 2018

Most Important Readings

• Owen Humpage, A Correct Value for the Dollar (Federal Reserve Bank of Cleveland, Economic Commentary January 1, 1986) read for class

• The Big Mac Index, The Economist, July 26, 2012

  The index is based on the theory of purchasing-power parity, which says that exchange rates should eventually adjust to make the price of a basket of goods the same in each country.

• The Big Mac Index, The Economist January 12, 2012

  Burgernomics shows Switzerland has the most overvalued currency

• Robert Looney, Dollarization in Latin America, Milken Institute Review, 2017

• Federal Reserve Bank of Chicago: Strong Dollar/Weak Dollar -- final exam question

• Joseph Gagnon, Combating Widespread Currency Manipulation, Policy Brief, July 2012 -- FINAL EXAM QUESTION

  Other Exchange Rate Readings

  • Pegs and Floats (Federal Reserve Bank of Philadelphia, May/June 1980) old, but still good overview -- Final Exam question

  • Ed Dolan, The Senate's Currency Manipulation is Not Only Bad Policy But unneceswsary, October 12, 2011

August 26/28

Macroeconomics/Payments Adjustment

• Interpretation of August 2018 GDP Data
  https://www.brookings.edu/blog/up-front/2018/10/20/progress-paradoxes-in-china-india-and-the-us-a-tale-of-growing-but-unhappy-countries/?utm_campaign=Brookings%20Global%20Connection&utm_source=hs_email&utm_medium=email&utm_content=67057613
• Jason Furman, Extracting the Signal from the Noise: Tips for Interpreting Macroeconomic Data, Milken Institute Review October 2016

• Overview Map of Macroeconomic Approaches/Theories

• Jason Furman, Extracting the Signal from the Noise: Tips for Interpreting Macroeconomic Data, Milken Institute Review October 2016

• Overview of Macroeconomics -- Keynes vs Hayek

• Keynes vs Hayek -- Round Two

• Scary tale about the Federal Reserve's QE2 policy

Chapter 9 in Wheelan provides a good introduction to GDP and some of the issues that come up in macroeconomics -- final exam question

Chapter 10 in Wheelan -- good overview of the U.S. Federal Reserve and contemporary monetary issues -- final exam question

If you haven't had economics before, the chapters in Eggert bring you up-to-speed.

• Eggert, Chapter 7 -- The Macroeconomy: Gross National Product

• Eggert, Chapter 8 -- Unemployment and Inflation

• Eggert, Chapter 9 -- Money and Monetary Policy

GDP, National Accounts

• Robert Looney, The Boko Haram Economy, Foreign Policy, July 15, 2014 -- Example of rebasing

• Peter Passell, Prosperity Isn't Just a Matter of Wealth, Foreign Policy, November 2, 2012

• Oxford Analytica, GDP's Status as a Bench Mark Will Wane, February 14, 2014

• Legatum Institute, Prosperity Index, 2012

• David Brooks, Capitalism for the Masses, NYT, February 20, 2014

• Diane Coyle, Beyond GDP: What the measue of economic performance misses about economic performance, Foreign Affairs February 16, 2014 -- final exam

• Morten Jerven, Quizzing African GDP Stats, This is Africa, December 17, 2012

• Richard Easterlin, When Growth Outpaces Happiness, New York Times, September 27, 2012

Macroeconomic Theory -- Most Important

• Peter McCleland, A Layman's Guide to the Keynesian/Monetarist Debate--very good -- easy introduction and overview of macroeconomics

• J.A. Cacy, The Choice of a Monetary Policy Instrument (Federal Reserve of Kansas City) -- Very Important -- Graphical Version of the LM/IS Framework

• L. Reynolds, Synthesis of Monetary Analysis and Income Analysis (LM/IS)-- only if you have a hard time following the previous paper

• Keynesian vs. Monetarist Doctrine: Policy Issues -- Will discuss in class -- final exam question

• Edmund Phelps,The Fantasy of Fiscal Stimulus, Wall Street Journal, October 30, 2018

• Investment and the Real Rate of Interest (Fischer) -- Classical Macroeconomics

• Deutsche Bank, "I'm an Austrian in Economics" September 16, 2011 -- Final Exam Question

• Robert Looney, Reaganomics, Handbook of Political Economy

• FSRB, John Williams, Economics Instruction and the Brave New World of Monetary Policy, June 6, 2011 -- updates -- Keynesians vs Monetarists Paper -- Final Exam Question

• Richard Haass, The Strategic Implications of U.S. Debt, Testimony, April 6, 2016

Current Events for Discussion

• Neil Irwin, "The Contradiction at the Heart of Donald Trump's Economic Policy, NYT, November 17, 2016

• Martin Feldstein, "Squaring Trumponomics With Reality," Wall Street Journal, November 15, 2016

• Martin Wolf, An Economic in-Tray full of Problems, Financial Times, November 9, 2016

September 4/9

Intrernational Monetary System/Global Financial Institutions

Most Important Readings

• Council on Foreign Relations, The Global Finance Regime, January 23, 2012

• Beyond Bretton Woods 2, The Economist, November 4, 2010 -- Is there a better way to organize the world's currencies?

• Ken Rogoff, The IMF Strikes Back (Foreign Affairs, January/February 2003)

• Robert Carbaugh and David Hedrick, Will the Dollar Be Dethroned as the Main Reserve Currency? Global Economy Journal 2009

• Brrry Eichengreen and Ngaire Woods, The IMF's Unmet Challenges," Journal of Economic Perspectives, Winter 2015

• Michael Clemens and Michael Kremer, The New Role for the World Bank, Journal of Economic Perspectives, Winter 2016

• Robert Looney, IMF in Jamaica, Foreign Policy, February 12, 2014

• Robert Looney, Egypt and the IMF, Milken Institute Review, November 14, 2016

• Three’s a crowd: The instability that stems from trilemmas The Economist, Jul 5th 2014

• Atish Rex Ghosh, On Center Stage (IMF), Finance and Development, September 2014 --

• John Williamson, Beijing Consensus versus Washington Consensus, Chapter, Robert Looney ed., Handbook of Emerging Economies, 2013 (Sakai) FINAL EXAM QUESTION

September 11/16

Global Crisis/Current Developments

• Robert Levine, Adjusting to Global Change: The Dangerous Road Ahead, Rand, 2009 -- COUNTS FOR 2 QUESTIONS

• Financial Crisis -- Ten Years Later, Economist, September 6, 2018

• Uri Dadush, Global Rebalancing: the Dangerous Obsession, Carnegie Policy Brief, February 2011

• Guillermo Ortiz, The Challenges to Achieving Sustainable Growth in Latin America, Think Tank 20, October 2014

• Hafez Ghanem, Growth and Convergence in the Arab Region, Think Tank 20, October 2014

• Roger Altman and Richard Haass, American Profligacy and American Power, Foreign Affairs, November/December 2010

• Mark Blyth, Austerity: The History of a Dangerous Idea, Milken Review Third Quarter 2013 FINAL EXAM

• Mark Blyth and Eric Lonergan, Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People, Foreign Affairs, September October 2014

• Thomas Wilett et al., The Slow Spread of the Global Crisis, Journal of International Commerce, Economics and Policy, 2010

• Ian Bremmer and Nouriel Roubini, A G-Zero World, Foreign Affairs, January 31, 2011

• Michael Pettis, The G20 Meetings: No Common Framework, No Consensus, Carnegie Endowment for International Peace, May 2009 Final Exam

Future of the International System

• Daniel Drezner, The Irony of Global Economic Governance, Council on Foreign Affairs, October 2012

• Ruchir Sharma, The Ever-Emerging Markets: Why Economic Forecasts Fail, Foreign Affairs, January/February 2014

• Ruchir Sharma, Leaders Indicating: Why Markets Now Use Politics to Predict Economics, Froeign Affairs, (September/October 2014)

• Danny Quah, Convergence Determines Governance -- Within and Oithout, Brookings Think Tank 20, October 2014-- FINAL EXAM

• Steward Patrick: The Unruled World: The Case for Good Enough Governance, Foreign Affairs (January/February 2014)

• Robert Zoellick, American Exceptionalism: Time for New Thinking on Economics and Security, July 25, 2012

September 19

FINAL EXAMINATION Gl - 133, 8-10

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