SYLLABUS spring 2010

SYLLABUS spring 2010 - Mr. Mutti Carnegie 204 Economics 233...

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Mr. Mutti Economics 233 Carnegie 204 Spring Semester, 2010 INTERNATIONAL ECONOMICS Objectives and Scope I hope that by taking this course you will be able to: (1) identify the causes and consequences of changes in international trade and financial flows, and (2) evaluate the effects of government intervention to alter patterns of production, trade, investment, and international payments. I also hope you will be better able to assess current controversies over globalization and the role of international organizations such as the WTO, IMF, and World Bank. The first half of the course is devoted to international finance issues, which are more closely related to macroeconomic material you have studied. In this section of the course, we first learn how economists keep track of international transactions in balance of payments accounts and then relate those measures to domestic saving and investment, movements in the exchange rate, and changes in the domestic money supply. We are then prepared to evaluate how changes in prices and output in an economy affect its balance of payments, and, in turn, how changes in the balance of payments affect the performance of the economy. We will consider questions of the following type: The United States balance of trade deficit peaked in 2006 at $760 billion. Based on figures for the first eleven months of 2009, the deficit has shrunk to less than half that amount. Is suffering a major recession the quickest way to reduce a trade deficit? What else might explain this change? The Chinese currency rose in value by 17 percent relative to the dollar from mid- 2006 to mid-2008, but has remained fixed since then. In what ways does this policy benefit or hurt the Chinese economy? Why is Europe more concerned about this situation than the United States? In January 2010, President Chavez devalued the Venezuelan bolivar 50 percent and established a dual exchange rate system. What problems are these actions intended to address, and under what conditions will they likely be successful? In a second bloc of international finance material we consider questions that involve
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SYLLABUS spring 2010 - Mr. Mutti Carnegie 204 Economics 233...

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