ITRN 503: INVESTMENT AND  MACROECONOMICS FOR INTERNATIONAL COMMERCE       George Mason University: The Institute of Public Policy                                                             Fall 2001

 

Professor: G. Chris Rodrigo  Tel: 703-993-8223  E-mail: crodrigo@gmu.edu   Room: ARL 212

Office hours: by appointment. E-mail is the main means of communication, so it is important that you keep me updated with your most recent e-mail address.

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Objectives and content

 

This course aims to provide an introduction to basic macroeconomic theory and key concepts in international finance. It is a necessary prerequisite to understanding the stability and regulation of national economies, the international financial system and processes of globalization. Basic topics in open economy macroeconomics will be covered. These are: the money supply, the balance of payments,  exchange rate systems, national income accounting, Keynesian and monetarist theories, the role of the governments, the IMF, the international financial system and the logic of financial crises. Students will learn also to read and interpret economic statistics.

 

Instructional method and grading

 

The course will be taught by the case method, using Harvard Business School cases. Since class discussion based on the assigned readings is central to the instructional method, it is essential that each student be thoroughly familiar with the readings and be ready to participate in the discussion. A significant part of the grade will be based on contributions to discussion and responses to questions. Students will be provided a basic framework in advance for analyzing each case. The final grade will be made up as follows.

 

            Class discussion and short exercises                  30 %

            Mid-term exam                                                 30 %

            Final exam                                                        40 %

 

In-class or take home exercises.  Some short exercises will be assigned over the duration of the course, to ensure that the basic concepts are assimilated. All take home work must handed in as hard copies, typed or printed, with a 12 point font and one inch margins. All sources must be cited in full. E-mailed or faxed submissions of take home work will not in general be accepted.

 

Students are encouraged to contact the instructor either individually or in groups for topics that need clarification or any other issue or problem. Consultations are by appointment in Room 212.

 

Cases and supplementary readings (No required texts for this course)

 

Required case material: Required cases will be available about one week after classes start.

Optional texts for reference (do not purchase): use Mankiw (M), Principles of Economics for macroeconomics and Kreinin (K), International Economics: a Policy Approach for international finance, if you have these from previous ITRN 504. Other books can be substituted for Mankiw and Kreinin. Alternatively you can use books for background reading in these subject areas

            Class schedule, readings and cases                                                                         Optional

            (Some supplementary readings will be assigned later)                                                    readings

 

1.         Lecture: measuring the wealth of nations; introduction                                  Mankiw Chs 22-24

            to economic analysis and economic data.

 

2.         Lecture: savings, investment and the financial system.                                   Mankiw Chs 25-28

            Fiscal policy: Managing aggregate demand. (9-797-076)

            Economics: an introduction and vocabulary. (9-383-079)

 

3.         National income accounting (9-797-075)

            Guide to economic resources on the Internet. (9-796-150)

           

4.         Keynesian economics

            Note on fiscal policy 1937 - 1961 (9-383-087).

            Note on the New Deal: from the fist to the second “hundred days” (9-382-115)

 

6.         Balance of payments accounting

            (Introduction to) Balance of payments (9-384-005)

            Kennedy and the balance of payments (9-383-073).

            Supplemental Note (9-384-006)  Supplement (Note), (9-385-243).

 

7.         Supply side economics

            The Reagan plan (9-381-173)

            Sense and nonsense about budget deficits (HBR Reprint)

           

            First examination (in-class).

 

8.         Exchange rate systems and the US dollar

            Exchange rate terminaology and analytics (9-701-121)

            The decline of the dollar 1978 (9-384-116)

 

9.         Third World debt

            Mexico in debt (9-797-110)

 

10.       Economic integration

            European monetary union (9-799-131)

           

11.       Financial reform in Japan

            Japan: “free, fair and global”   (9-798-083)

            Supplementary readings: to be given later

 

12.       The international financial system.

            Currency crises (9-799-088); 

            Note on currency crises (9-799-089)

            Responding to 21st century financial crises (9-798-090)

13.       Estimating productivity growth

            Accounting for productivity growth (9-794-051)

            Singapore (9-793-096)

 

14.       New thinking in macro-theory

            Market failures (9-700-127)

           

Final examination (in-class)