INR 533 International Political Economy

Course Description

What is the relationships between the individual, the market, and the state? This course attempts to answer that question with a discussion of the causes of economic growth, followed by an examination of the structure and performance of markets, the international economic system, and the economic effects of public policy. Throughout the course there is an emphasis on identifying how the incentives of actors and the relevant institutional constraints (“rules of the game”) affect outcomes.

Here is an example of how the course is organized:

Week 4  International Trade and Finance

Read:

  • Buchholz, Ch. 2 and 4.
  • Easterly, Ch. 6-7.
  • Jake Bernstein and Jesse Eisinger, “Banks’ Self-Dealing Super-Charged Financial Crisis, ProPublica, 26 August 2010 (Evernote).
  • Matthew Higgins and Thomas Klitgaard, “Saving Imbalances and the Euro Area Sovereign Debt Crisis,” Current Issues in Economics & Finance 17, 5 (May 2011), p. 1-11.
  • Michael Lind, “The Op-Ed history of America,” The National Interest 37 (Fall 1993/1994) (on Canvas).

Reading response questions:

  • Is the free flow of capital—goods, services, and money—across international borders helpful or harmful to economic growth? Why? (Buchholz Ch. 2 and 4; Easterly, Ch. 6-7; Bernstein and Eisinger; Higgins and Klitgaard; Lind)
  • Which states should engage in free trade? Why? Which states should engage in “protectionist capitalism”? Why? (Buchholz Ch. 2 and 4; Lind)

Discussion question:

  • Should the industrialized world loan money to the non-industrialized world? Why? (Easterly, Ch. 6-7)

Week 5  State Policy

Read:

  • Buchholz, Ch. 5, 9-11.
  • Easterly, Ch. 11-13.
  • Ross, Ch. 3.
  • Paul Krugman, “Baby-Sitting the Economy,” com, 14 August 1998 (Evernote).
  • Jonathan Soble, “In Japan, Moves to Stimulate Economy Reach a Critical Stage,” The New York Times, 5 November 2014 (Evernote).

Reading response questions:

  • Do concepts from public choice theory like “rational ignorance” explain why states with oil are more likely to experience violence? (Buchholz; Ross, Ch. 3)
  • Should states implement monetarist or Keynesian macroeconomic policies to get out of a recession? (choose only one) Why? Does your answer change if the state produces oil? Why? (Buchholz.; Ross, Ch. 3; Krugman; Soble)

Discussion question:

  • What economic policies might help an oil-producing state with low per capita income become a stable democracy? Why?