International Economics 2

The main objective of this course is to familiarise students of differing academic backgrounds with the practice of international economic relations through the study of current policy debates about the workings of the contemporary international economy.

This course takes account of the division within the economics discipline. It presents students with both, the ‘mainstream’ and the ‘political economy’ or ‘heterodox’ view of economic policymaking. It applies theoretical and conceptual discussions to the policy arena and is dedicated to the discussion of contemporary policy debates in the field of ‘economic globalisation’. The course discusses different interpretations of past and contemporary economic crises, both in countries of the Global North as well as in countries of the Global South. Students will learn about the different causes of crises as well as policy conclusions that can be drawn to prevent future crises.

Prerequisites

Prerequisite: International Economics 1

Objectives and learning outcomes of the module

On successful completion of this module a student will be able to:

• Have an in-depth understanding of the policy issues arising from recent developments in the world economy
• Put into practice the tools necessary to develop a critical perspective on the impact of globalisation in different parts of the world
• Have a good, detailed, and informed view of what institutional changes and policy tools may be required to govern the world economy in the future

Workload

The module will be taught over 10 weeks with one 1 hour lecture and one 1 hour tutorial per week.

Scope and syllabus

1 Introduction to theory and policy approaches in Economics, course overview

2 What is a market (according to economists)?

3 From economic efficiency to economic productivity to exploitation: Some basic concepts explained

4 The role of money in the economy

5 The Balance of Payment, Exchange Rates and the Determinants of the Trade Balance

6 Foreign Exchange Markets and Exchange Rate Problems

7 The international economic system: Historical developments and status quo

8 Theory of International Trade I: Classical and Orthodox Trade Theories PPT

9 International Trade Theory II: Trade, industrialisation and capability development

10 Intersecting inequalities: race, gender, and class as (missing) links in economics?

11 The global financial crisis of 2007/08: causes, main features and consequences

12 European Integration and the Eurocrisis

13 The austerity approach to economic recessions: The case of the UK since 2009

14 The perfect storm: the economics of the COVID-19 pandemic

15 Capital account liberalisation crises in developing economies

16 Foreign direct investment and multinational companies in the global economy

17 Governance, Corruption and Economic Development

18 Income Inequality, Wages and Unemployment in the Global Economy

19 Economic globalisation and the environment: Incompatible bedfellows?

20 Summing Up

Method of assessment

Policy Paper 50%

Written examination 50%

Suggested reading

1. Eichner, T.S., Mutti, J.H. and M.H. Turnovsky (2009) International Economics, 7th edition, London: Routledge.

2. Stretton, H. (1999) Economics, a New Introduction, London: Pluto Press

3. Eichengreen B (2018) The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era, Oxford University Press, [on the new populism threat]

4. Stiglitz J (2015). The Euro. Penguin [It maps out why the crisis isn’t over]

5. Rodrik D (2018) Straight Talk on Trade: Ideas for a Sane World Economy, Princeton University Press [why the current trade regime needs an overhaul]

6. Ahmed L (2010) Lords of Finance, Penguin {on the Great Depression but history is very relevant today]

7. Mazzucato M (2018) The Value of Everything: Making and Taking in the Global Economy, Allen Lane

Additional Reading

1. Baker, D., Epstein, G. and Pollin, R. (1998), Globalization and Progressive Economic Policy, Cambridge: Cambridge University Press. [This contains a collection of essays relevant to many topics discussed in this course. Provides more than a ‘textbook’ level of insight into current debates on question related to the globalisation of economic relations.]

2. Bhagwati, J. (2005). In Defense of Globalization. Oxford: Oxford University Press [A very accessible and well-written contribution to the debates on economic globalization, from a mainly policy-oriented and largely orthodox economic perspective that explains the arguments in favour of economic globalisation and takes issue with the stance of so-called ‘anti-globalizers’.]

3. Freeman, A. and B. Kagarlitsky (eds) (2004). The Politics of Empire. Globalisation in Crisis. London: Pluto Press. [This is a radical critique of globalisation with a focus on economic issues and encapsulates the main counter-arguments to Bhagwati’s defense of globalisation. The contributions to this book place contemporary globalisation in the historical context of the political and economic forces behind the expansion of capitalism and provide regional perspectives on the impact of contemporary economic globalisation and its political implications.]

4. Gilpin, R. (2001), Global Political Economy: Understanding the International Economic Order, Princeton: Princeton University Press [This is a very useful discussion of the international economic order from a more long-term historical perspective. Very in-depths, taking account of both political and economic factors, and very intelligible. The successor to Gilpin’s ‘The Political Economy of International Relations’ for those of you who may be familiar with the latter].

5. Glyn. A. (2006). Capitalism Unleashed. Finance, Globalization and Welfare. Oxford: Oxford University Press. [An excellent and very accessible analysis of the economic dynamics of contemporary globalization and their impact on social welfare, economic stability and income inequality. This also provides a very lucid analysis of core macroeconomic evidence and trends, brought together in a very clear and concise manner that will be very helpful to gain a meaningful overview over empirical facts in the context of an equally lucid discussion of their significance].

Disclaimer

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