INTRODUCTION TO MACROECONOMICS: GLOBALIZATION
Economics 102: PAGS I
J. Diskin
Bolling Center 331
Office Hours: M 2:30-3:30, T 10-12, W & F 2:30-3:30, and by appt.
Fall 2004
email: jond
Phone: 1427
YOU WILL FIND THIS SYLLABUS ONLINE AT: http://www.earlham.edu/~jond/econ101.htm
This course will introduce you to theories and issues about economic relationships, first at the
level of the country and then among countries as we consider issues related to globalization. It is a
course with a broad scope that serves as an introduction to the field of Economics, a prerequisite for
many upper level Economics courses, as well as part of the Peace and Global Studies introductory
sequence of courses. These two elements of the course inform one another as we take a rather broad
view of economic life. We will join more formal and technical aspects of mainstream economic
reasoning to the great ethical questions that arise when we consider who gains and who loses and in
what ways in our economic relationships. We will also pay special attention to social structures and
how they are linked to economic life and institutions. In this way you will gain exposure to forms of
economic reasoning and concepts that bear on many pressing global issues and relationships and that
have become part of the fundamental language of policy discussions.
In addition to this exposure, I hope that this course will push you to think analytically and
critically about information, ethical claims, and to identify strengths and weaknesses in arguments.
We will approach the economic ideas, relationships, policies and institutions we will
encounter in this course in a variety of ways. We will look at broadly different theoretical approaches to
economic life, especially the Liberal, Radical (Marxian) and Keynesian traditions of analysis. We will
link the development of ideas about the economy to the historical development of economic and
capitalist relationships, mostly through E. K. Hunt’s book, Property and Prophets. We will use more
analytical and abstract models of the economy that show relationships among its parts. We will look at
some data about the economy to gain some familiarity with magnitudes and concrete relationships. We
will spend some time thinking about the politics and policies that Macroeconomics is tied to, especially
in this election season in the U.S., and we will look at both the mechanisms and the social and ethical
issues related to globalization in the latter part of the course.
In short, we will be using different kinds of thinking and drawing on different kinds of texts and
discourses in this course to try and develop a broad sense of Macroeconomics and Globalization. I
hope that this exposure will serve as a good foundation for your future thinking, action, and
coursework.
More Schematically, course goals include:
 understanding economic activity and globalization in multiple ways
 learning and working with fundamental economic concepts
 learning to use models and charts and abstraction in analysis and reflecting on what they can
and cannot show us
 practicing critical reading and analysis of texts, ideas, and arguments
 grappling with the relationship between ethics and economic analysis
 engaging in generous discussions with one another that allows each of us to risk our ideas in
public
What this course requires of you:
As with any course, you need to attend class regularly and do the reading before coming to class. This
makes for better discussion and comprehension. In addition, you need to plan ahead for any conflicts you may
have with exams and paper dates. If you have a conflict, bring it to my attention right away and I will be
quite accommodating in finding an alternative. I will not be very accommodating if you approach me
with a conflict, even a compelling one, a few days before an assignment is due. Without prior
arrangement, I will not allow extensions or changes in exam/paper dates later without penalty.
I also want to make clear that you should be an active learner. For some this comes easily, for
others it doesn’t. But I simply cannot know how everyone is doing all the time so you should let me
know if you are not following readings or in-class presentations. I will always be glad to meet with you
outside of class.
If you have a documented learning disability I will be glad to make all reasonable
accommodations. You must let me know, however, early in the semester and have the customary
documentation from Student Support Services.
Main Texts:
F. S. Weaver, Economic Literacy, Rowman and Littlefield, 2002. [EL]
P. Krugman, The Age of Diminished Expectations, 3rd Edition, 1997. [ADE]
E.K. Hunt, Property and Prophets, 7th ed. M. E. Sharpe; 7th edition 2002. [P&P]
Dollars and Sense, Real World Macro Paperback: 152 pages Publisher: Dollars & Sense, 20th edition
2003. [RWM]
There are additional readings that are either available as we blinks or as reserve readings in Lilly Library
and in the Social Science office. Reserves are designated as: **
Grading and Assignments:
The assignments for this course consist of three exams during the semester, occasional short writing
assignments and homework exercises and a final exam. The assignments will count toward your final
grade as follows:
Three exams:
Short assignments:
Final:
Participation:
55%
10%
30%
5%
[two best = 20% each, the other = 15%]
Two Notes:
1) You may write a final paper on a topic of your choosing by special arrangement.
2) You may skip the final if you wish. If you do, the three exams will be valued at 80% of your grade
(30% for two best, 20% for the other) and the short assignments for 15% plus 5% participation.
COURSE SYLLABUS
Day One: Introduction to Course.
Introduction to Economics and Globalization: Week 1 [Aug 25 – Sept 1]
1) EL, Introduction.
ADE, Preface and Introduction.
2) R. Kuttner, “The Poverty of Globalization”, American Prospect, January 2002.
A. Sen, “How to Judge Globalism”, American Prospect, January 2002. http://www.prospect.org/printfriendly/print/V13/1/sen-a.html
“The Case for Globalisation”, Sept.
2002, The Economist. http://www.globalexchange.org/campaigns/wto/economist-092300.html.pf
FIRST SHORT WRITTEN ASSIGNMENT DUE MONDAY AUGUST 30.
Your task it to write no more than two pages about the articles on Globalization in which you address
these specific questions: What assumptions do Sen and the editors of The Economist make about
globalization that help explain what they mean by that term? Compare what they say about the gains
and costs of globalization. Bring these to class as they will be the basis for class discussion.
3) ADE, I. “The Roots of Economic Welfare” and Part 1.
A) Feudalism and Mercantilism
P&P, Chapters 1 and 2.
[Sept 3 – 20]
Sept. 3
B) Classical Liberalism:
Sept. 6 - 10
P&P, Chapters 3 and 4 including the Appendix on Classical Economics.
A. Smith, The Wealth of Nations. from the “Adam Smith Institute”. Read Preface and Chapters 1 and 2.
http://www.adamsmith.org/smith/won-index.htm
EL, Chapter 1, pp. 8 – 25. Basic Market Mechanisms.
C) Radical and Critical Perspectives:
Sept. 13 - 15
P&P, Chapters 5-7.
Marx and Engels, “The Communist Manifesto”. Read Preface and “Bourgeoisie and Proletarian”.
http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm
SECOND SHORT WRITING ASSIGNMENT DUE SEPT 15: Write a 2-3 page paper in which
you identify the values you see in the work of Smith and Marx. List them and use quotes from the text
that support your claims.
D) Capitalist Instability and the Keynesian Response
P&P, Chapters 11 – 12.
Sept. 17 - 20
EXAM 1: Wednesday Sept. 22nd
Sept. 24 – Oct. 18
A) The National Economic Output and its Disposition and Distribution
1) GDP: EL, Chapter 3, The GDP, pp. 102 – 116.
RWM, 1.5, “Wages for Housework”.
Sept. 24 – Oct 1.
2) FLOWS and DEMANDS: EL, Chapter 3, Effective Demand, pp. 116 – 137.
RWM, Chapter 3, Articles 3.1, 3.2, 3.5.
2) INCOME DISTRIBUTION: EL, Chapter 2, pp. 73 – 98.
RWM, Chapter 2.
B) Macroeconomic Policies:
1) Fiscal Policy: Taxing, Spending and Deficits.
EL, Chapter 3, pp. 139 – 144.
RWM, 4.1, 4.5, 4.8, 4.10.
ADE, Chapter 7, “The Budget Deficit”.
Oct. 4 – 15.
On Bush’s Tax Policies:
Edmund Andrews, Aug. 14, NYTImes, “Report Finds Tax Cuts Favor Wealthy”
http://www.taxpolicycenter.org/newsevents/cite_cbo_report2.cfm
R. Reich, “Who Pays And How”, Robert B. Reich, August 18, 2004, commentary on “Marketplace”.
http://www.prospect.org/web/printfriendly-view.ww?id=8377
J. Stiglitz, “Bush’s Tax Plan: The Danger”, New York Review of Books, March 2003.
http://www.earlham.edu/~jond/MACRO/StigonBush.html
THIRD SHORT WRITING ASSIGNMENT: This assignment asks you to
What do the Bush and Kerry campaigns (or the Democratic and Republican parties) have to say about
taxes, trade and economic policy more generally? Identify their assumptions and underlying values that
inform their perspectives. See these we blinks (and any others you wish to consult). You will have to
navigate around to find statements and comparisons between the two campaigns. List key positions
and not differences. What arguments do you find compelling
http://www.johnkerry.com/index.html
http://www.georgewbush.com/Economy/Brief.aspx
2) Monetary Policy: Interest Rates and Inflation
EL, Chapter 3, pp. 144 – 162.
RWM, 5.1, 5.4, 5.3.
ADE, Chapter 5, “Inflation” and Chapter 8 “The Embattled Fed”.
Krugman, “The Babysitting Coop”, http://www.pkarchive.org/theory/baby.html
3) Employment and Social Policy Issues:
RWM, 6.1, 6.4, 6.5 and 7.1, 7.4.
ADE, Chapter 6, “Health Care”.
FALL BREAK: October 7 and 8th
Exam II in Class on Monday October 18th
Oct 20–Nov 12.
“What is Globalization?”, World Bank Briefing Papers on Globalization, #1.
http://www1.worldbank.org/economicpolicy/globalization/documents/AssessingGlobalizationP1.pdf
1) Trade and Foreign Investment
a) Comparative Advantage
EL, Chapter 5, pp. 177 – 179.
Handout: Comparative Advantage Example [link]
Comparative Advantage Homework Due on Oct 25
b) Essays on Free Trade and Trade Policy:
ADE, Chapter 10.
RWM, 8.1
H. Daly, “The Perils of Free Trade”, Scientific American, 1993.
http://www.law.ufl.edu/cgr/envirotrade_seminar/Herman.htm
Kristoff, “Farm Subsidies that Kill”, July, 2002, New York Times.
http://www.earlham.edu/~jond/farm.htm
ABCs of Free Trade Agreements.
http://www.dollarsandsense.org/archives/2001/0101abcs.html
VIDEO: Moyers on Nafta’s Chapter 11.
Data from Dicken and World Bank.
c) Exchange Rates, Balance of Payments and Foreign Investment
EL, Chapter 5, pp. 180 – 199.
ADE, Chapters 4, and 9.
Data from Dicken
2) From Bretton Woods to Globalization:
Nov 3 - 12
EL, Chapter 6.
VIDEO: “The Commanding Heights: Bretton Woods”
ABCs of the Global Economy, Dollars and Sense Collective, 2000.
http://www.dollarsandsense.org/archives/2000/0300collect.html [or above in first section?]
EXAM III: On International and Global Issues NOV 15
3. Labor and Migration in the Global Economy.
Nov 17 – 19..
A. Hoschild, “The Global Nanny Chain”, The American Prospect, January 3, 2000
http://www.prospect.org/print-friendly/print/V11/4/hochschild-a.html Link to A. Hoschild’s article.
S. Dillon, “Profits Raise Pressures on U.S.-Owned Factories in Mexican Border Zone
The New York Times, Sunday, February 15, 2001, http://www.earlham.edu/~jond/Profits_Raise_Pressure.html
G. Thompson, “Chasing Mexico's Dream Into Squalor”, New York Times, February 11, 2001 [See
Link]
“Factory Closes, Jobs Go South. Familiar Story, With a Twist”, A. DePalma, New York Times, Oct
2002. [See link].
Video: Privatizing Water – Moyer’s on Cochabamba
4. Policy, Perspectives, Assessments.
Nov 29 – Dec 8.
“World Bank Group Fact Sheets: Assessing Globalization”, parts 2 –4.
http://www1.worldbank.org/economicpolicy/globalization/issuesbriefs.html
M. Weisbrot, American Prospect. http://www.prospect.org/print-friendly/print/V13/1/weisbrot-m.html
J. Stiglitz, “Globalism’s Discontents” American Prospect 2002.
http://www.prospect.org/print-friendly/print/V13/1/stiglitz-j.html
B. Barber, “Can Globalization be Governed”?
http://www.prospect.org/web/printfriendly-view.ww?id=5418
Final Exam: In Class or skip it, your choice