Economics 188 - Management and the Global Economy

Professor Alan Spearot

 

Overview and Expectations

 

In this course, we will study the behavior of firms in the international economy, and the motivations for governments to regulate international commerce.  To do so, we will incorporate the modern theory of the firm within standard models of international trade.  Doing so requires economic theory, so I will expect that everybody give a honest effort in working through the derivations that we cover in class.  Further, we will also cover various empirical studies.  As such, I will expect that students read through these studies in preparation for class.  Finally, we will cover a handful of business case studies to study how individual firms made decisions related to participation in the global economy.

 

Coursework and Grading

 

Grading will be based on five components.  There will be three exams that follow critical sections of the course.  Each will be worth 25% of your final grade.  The rest of the grade will be based on a presentation and attendance.  The precise grading breakdown is summarized in the following table:

 

5% Attendance

5%  Paper Topic

15% Presentation

25% Exam 1

25% Exam 2

25% Exam 3

 

Cheating will be dealt with harshly.  You will fail the course and be reported for academic misconduct.

 

Readings

 

Reading and assignments are posted on the webpage.  Readings are linked for download.  Most readings must be downloaded from JSTOR, in which case you must download them from a university computer or be logged into the library prior to download.  Please plan ahead.  If you have a problem with downloading these papers, please let me know.

 

Business case studies (roughly $4 each) must be downloaded from Harvard Business publishing.  Please use the following link to access the 188 course module:

 

https://cb.hbsp.harvard.edu/cbmp/access/32456831

 

Presentation

 

The assignment is to pick an industry that interests you, and to prepare a presentation summarizing that industry and how it interacts in the global economy.  Who are the major players?  What international expansion strategies did these players choose?  What are the major global policies that affect this industry?   Presentations will be occur during the last week of classes and sections.

 

Office Hours

 

My office hours will be 3:00-5:00pm on Wednesdays.  My office is 459 Engineering 2.  My email is acspearot@gmail.com.  The Course website is the following:

 

http://people.ucsc.edu/~aspearot/Econ188.htm

 

Office Hours

 

The teaching assistant for the course will be Jesse Mora.  His email is jmora4@ucsc.edu.  Office hours and sections will be announced during the first week.

 

Exam Re-grades

 

Exam re-grade requests must be submitted in writing, and only after looking at the answer key.  I reserve the right to re-grade the entire exam during a re-grade.

 

Course Schedule and readings:

 

Week

Section

Title

Reading

Notes

Assignments

Jan 5 –

Jan 9

Intro

Review and Intro

Obama Speech to Export-Import Bank

 

 

 

 

Modeling Firm Behavior

Krugman

 

 

 

Exporting

Firms and Exporting

Bernard, Jenson, Redding, and Schott

Optional Reading:

Helpman 2.1-2.3, 2.7

 

 

 

 

 

 

Jan 12 –

Jan 16

 

Firms and Exporting

 

Optional Reading: Helpman 2.1-2.3, 2.7

 

 

 

Transportation Costs

Hummels

 

 

 

 

 

Ben and Jerry's

Harvard Case

 

Jan 19 –

Jan 23

 

Policies that affect exporters

Trefler

Optional Reading: Helpman 2.1-2.3, 2.7

 

 

 

 

Steel Wars

Harvard Case

 

 

 

 

Optional Reading: Blonigen, Broda and Weinstein

 

Jan 26 –

Jan 30

Exam 1

Practice Exam, Answers, Practice Exam 2, Answers

Practice Exam 3, Answers

2013 Exam Answers

2014 Exam  Answers

2015 Exam  Answers

 

EXAM 1

Jan 27th

 

 

FDI

 

Which firms invest and why?

 

 

Feenstra
Offshoring of America

 

 

Harvard Case

Optional Reading: Helpman 2.4, 3

 

Feb 2 –

Feb 6

FDI

Policies that affect foreign investment

Ireland,  FDI in China, 60 Minutes Video on Tax Havens

Harvard Case

Presentation Topic Due:

Feb 2nd

 

 

FDI Case Studies

Walmart in Germany,

Walmart in Mexico

Autos in Mexico

Harvard Case

 

Feb 9 – Feb 13

FDI

Risk in International Markets

Export Failure (Mora)

 

 

Feb 16 –

Feb 20

Exam 2

Practice Exam, Answers

Practice Exam 2, Answers

Practice Exam 3, Answers

 

Exam Answers

 

EXAM 2

Feb 17th

Management

Management Practices

Survey, India, Environment

 

 

Feb 23 –

Feb 27

Management

Transfer Pricing

 

 

Mar 2 –

Mar 6

Management  

GATT/WTO and Trade Agreements

Crowley

 

 

Firms and Policy

Tokarick, Cambodia, Hong Kong

 

 Harvard Case

 

Mar 9 –

Mar 13

Presentations in lecture and section

 

EXAM 3

Mar 17,

4-7PM