IR 213: The Global Economy


IR 213: The Global Economy

Spring 2016

This course provides an introduction to international economics for students of international relations. We address the core puzzle of why poor countries are poor and rich countries are rich, with a focus on international (as opposed to domestic) factors. We cover the economic fundamentals governing the international movement of goods, money, and people, but we also cover the political implications of those flows. We pay attention to the winners and losers created by these flows, and to the policies and institutions that regulate them.

The economic nuts and bolts introduced in this course: comparative advantage, terms of trade, balance of payments, exchange rates, and so forth, are challenging, and the course is demanding. But if you want to save the world, or if you want to get rich, this is the right course to be in.

The syllabus for the course is here (Updated 4/13). Professor Graham's office hours are Fridays from 9-11 AM in VKC 305. Click here to book a meeting between 9 and 10. Drop in hours are 10-11.  

Lecture Slides and Requred Material

Week 1

Lecture 1: Introductory Lecture
Viewing: How Ideas Trump Crisis

Lecture 2: Fundamentals: Supply, Demand, Complements, Substitutes
Viewing: Principles of Economics
Reading: Principles of Economics (supplementary reading)
Reading: Principles of Economics 2 (supplementary reading)
Article: Oil Prices: What’s Behind the Drop? Simple Economics (supplementary reading)

Week 2

Lecture 3: Comparative vs. Absolute Advantage
Viewing: Comparative Advantage and the Tragedy of Tasmania
Viewing: Gains from Trade (optional)
Reading: Carbaugh, Chapter 2, pp. 31-42 (stop before “Distributing the Gains from Trade”); 53-56.  (29-40, 52-55)
Article: Using your comparative advantage (supplementary reading)

Lecture 4: Distributing the Gains From Trade
Reading: Carbaugh, pp. 42-45 (40-44)
Reading: Irwin, Douglas (2009 (3rd Edition)) Ch6 Developing Countries and Open Market in Free Trade under Fire.  Only pp. 178-193 required (rest of chapter assigned later in the course).
Reading:David Dollar, 2005, “Globalization, Poverty, and Inequality Since 1980 (optional)
Reading: Learning the Lessons of Stagnation (optional)
Reading: Wise & Tuynman (2015) NAFTA 20: A Bittersweet Celebration (optional)
Reading: Birdsall, Nancy et al. 2005. “How to Help Poor Countries,” Foreign Affairs. 84(4):136 (optional)

Week 3

Homework 1: Due January 26th, 2016
Lecture 5: Sources of Comparative Advantage: Winners and Losers Within Countries
Reading: Carbaugh, pp. 69-87 (65-82)
Reading: Carbaugh, pp, 87-109 (82-103) (optional)
Reading:  “The Allocation of Talent and U.S. Economic Growth.” (optional)

Lecture 6: The Law of One Price and Barriers to Trade
Reading: Chapters 4 & 5 (optional)
Viewing: Check out this data visualization (optional)

Week 4

Lecture 7: Domestic Politics of Trade: Concentrated vs. Diffuse interests, lobbying, etc
Reading: Carbaugh, pp. 215-223 (209-215)
Reading: Heritage Foundation Advocacy Piece Against Current U.S. Sugar Policy
Reading: France moves to placate farmers with more aid
Reading: Why are Unions so Focused on Fighting Trade Deals (optional)
Reading: Irwin, Douglas (2009 (3rd Edition)) Ch6 Developing Countries and Open Market in Free Trade under Fire.  Only pp. 200-204 (optional)

Lecture 8: International Politics of Trade: A Little History
Reading: Carbaugh, 187-200 (179-193)
Viewing: A Brief History of International Trade, by Ryan Petersen (optional)

Week 5

Lecture 9: International Politics of Trade: Current Debates
Reading: Carbaugh, pp. 201-215 (193-209)
Viewing: Planet Money Makes a T-Shirt (optional)
Reading: 'Reshoring' Trend Has Little Impact On U.S. Economy, Study Finds (optional)
Reading: Economist (2015)TPP, RIP?  (optional)
Reading: Economist (2015) What’s the big deal? (optional)
Reading: Labor Standards & Trade Agreements Irwin, Chapter 6, pp. 204-218. (First half of the chapter assigned September 2nd) (optional)

Here is the updated midterm study guide
Homework 2: Due February 11

Week 6

Midterm Exam
No Section

Guest Lecture: TPP
Reading: Signing of Trans-Pacific Partnership trade deal opens up tough battle in U.S. (optional)

Week 7

Lecture 10: Trade and Development 
Reading: Carbaugh, pp. 231-249 (223-240)
Reading: Re-skim the first half of Chapter 6 from Irwin (assigned September 2nd)
Reading: Economist (2014) Good thing, or bad? (optional)
Reading: NPR (2013) Coffee For A Cause: What Do Those Feel-Good Labels Deliver? (optional)
Reading: Freakonomics (2010) Fair Trade and the Food Movement (optional)

Lecture 11: Foreign Investment (1) Foreign Investment (2)
Reading: Friedman, Excerpt from The Lexus and the Olive Tree
Reading: Toward Best Outcomes From Foreign Direct Investment in Poorly Performing States
Reading: The Economist, “Istanbuls and Bears”  (optional)
Reading: Quantitative Easing and Capital Flows to Emerging Markets (optional)
Reading: Why Foreign Direct Investment Still Polarizes India (optional)
Reading: For Later Reference: Chapter 9, Carbaugh

Week 8

Lecture 12: What is money? Also, interest rates and exchange rates
Reading: Carbaugh, p. 399 “How to Play the Falling (Rising) Dollar” (386)
Reading: What a Stronger Dollar Means for the Economy
Reading: NYTimes: Clashes and Protest in Iran As Currency
Reading: The Wikipedia page on Gresham's law
Reading: Gresham's Law Takes Iran
Due In Class: One sentence thesis statement! (March 3)

Week 9

Lecture 13: Balance of Payments
Reading: Carbaugh Chapter 10
Reading: As the U.S. Borrows, Who Lends?  
Reading: Tourism and the trade balance: A number of great import (optional)
Paper #1 Due March 8

Lecture 14: The IMF
Reading: Read the introduction and section 5.1 of the Wikipedia article on the IMF.  Skim the rest of the article. 
Reading: Kenneth Rogoff, “The IMF Strikes Back
Viewing: Watch the three videos at the link (one each on surveillance, technical assistance, and lending)
Reading: Frankel, “Critiques of the IMF” (optional)
Reading: Jerven: “What does Nigeria’s new GDP number actually mean?

Week 10


Week 11

Lecture 15: Financial Crises: The Asian Financial Crisis, The Global Financial Crisis, and the Future of the Eurozone
Reading: A Good Look at the Thai Financial Crisis in 1997-1998
Reading: This American Life, episode #455, “Continental Breakup (optional)
Reading: Greece signs up to a painful, humiliating agreement with Europe (optional)
Reading:A Set of Economist summaries on the Greek Crisis (optional)
Reading:Gordon and Wright (2015) No Exit Why Greece and Europe Will Still Stay Attached (optional)

Lecture 16:Development Strategies 
Reading: Carbaugh, pp. 255-258 (247-250)

Week 12

Lecture 17: Foreign Aid 
Reading: The Development Challenge (Foreign Affairs)
Reading: How to Assess the Need for Aid? The Answer: Don’t Ask (Easterly)
Reading: Why Foreign Aid is Hurting Africa (Moyo)

Lecture 18: Foreign Aid II 
Reading: Get an MBA, Save the World (Charles Kenny)
Reading: Philanthropy for Hackers (Sean Parker)
Reading: The Problem with International Development and How to Fix It (optional)

Week 13

Lecture 19: The World Bank
Reading: The World Bank Group,” Council on Foreign Relations Backgrounder (all sections)
Reading: U.S. Opposing China’s Answer to World Bank 

Lecture 20: Migration and Development I
Reading: Vox article on open borders. 
Reading: Carbaugh, pp. 331-337 (317-323)

Week 14

Lecture 21: Migration and Development II
Readings: Ten Theses on Immigration (Ross Douthat, NY Times)
Readings: Accepting Migrants but Not Offering Rights

Lecture 22: College to Career
Reading: No reading

Week 15

Lecture 22:Economic Inequality and Black Markets
Reading: No reading
Paper 2: Due April 19

Lecture 23: Global Supply Chains
Reading: No reading

Week 16

Lecture 23: Charter Cities: How do you design a successful polity?
Viewing: Why the World Needs Charter Cities (Paul Romer)
Listening: #415 Can a Poor Country Start Over (Free to download from iTunes -Planet Money)
Reading: Robot makers turn to technology industry as next world to conquer (optional)

Practice Homework