Topics in Global Markets 2018-2019

Academic year: 2018-2019
 
Instructor:   Rodolfo Helg
 
Course outline 

The course analyzes the determinants and consequences of the increasing international integration of markets. After an introduction on globalisation and economic growth the course tries to understand international trade flows of good and services. In so doing, it presents the fundamental models of international trade theory. These highlight the distinction between the efficiency and the equity effects of trade policy. Such distinction is crucial to comprehend the political economy of international trade policy with its drive towards multilateral trade agreements on the one side, and the resistance to them by various pressure groups on the other side. The managerial implications of the material presented are discussed.
Understanding the dynamics of international markets is nowadays a necessity for most high-level managers. The purpose of the course is to build a framework of analysis that enables students to understand the challenges of international trade and investment and to master the opportunities they represent by formulating strategies that will enable businesses to succeed in the international business environment.
Upon completion of the course the student will have an appreciation and understanding of the general nature of globalization, and its impact on countries, firms and individuals.
The format of the course is based on lectures by the instructor, class discussions and class presentations (see below)

The textbook utilised is:

(H)   Hill C.W.L., Hult G.T.M., International Business. Competing in the global marketplace, 11th edition, 2017, McGraw-Hill (companion website)

some readings will be also found in:

(S) Suranovic S., "International trade theory and policy analysis", v.2.0, October 2015, Flat World (also available free on the web via Saylor Academy- 2012 edition) (also here in pdf form)
(HK) Head K., "Elements of multinational strategy", Springer, 2007
(BGMW) Brakman S., H. Garretsen, C. van Marrewijk, A. van Witteloostuijn, Global Economy, Cambridge University Press, 2006
(MSB) Miles D., A. Scott, F. Breedon, Macroeconomics. Understanding the wealth of nations, third ed., Wiley, 2012

material for the exam is signalled by *

Optional readings can be used to get a wider and deeper perspective on the topics of the course. Statistical sources can be used to obtained detailed data on the issues discussed in class. 

Information and data on international trade issues are available at: 

WTOEU-DG-TradeUS International Trade Commission

and an interesting debate on what Capitalisn't with Luigi Zingales and Kate Waldock

NEW:    SAMPLE EXAM

Class presentations:

a) groups and timetable  NEW 2018

b) exercises

1. Introduction to the global environment 

* (H) chpt 1 (class presentation)
pag 27 in Maddison A., The world economy: a millennial perspective, OECD, 2001 
O'Rourke K., The end of globalisation, video interview on VOXEU, 1 February 2019.
Ortiz-Ospina E., D. Beltekian, M.Roser, Trade and globalization, 2018, online at OurWorldInData.org
Tomb I., K. Trivedi, Peak trade is premature, VOXeu, 6 January 2017 
OECD-WTO, Measuring trade in value added
Rodrik D., Economics of the populist backlash, VOXeu, 3 July 2017
O'Rourke K., Brexit: this backlash has been a long time coming, VOXeu, 7 August 2016
Obstfeld M., Get on track with trade, Finance&Development, 53, 4, 2016
Human population through time (video)
Income and life expectancy (video), GapMinder
(HK) chpt 1
(BGMW) chpt 1

2. The Wealth of Nations

(MSB) chpt. 3  (class presentation)

3. Causes and consequences of international trade

* (H), chpt 6 (class presentation)
* (S), The theory of comparative advantage: overview
(S), The Heckscher-Ohlin model: overview
(S), Economies of scale and international trade
Ghemawat P., Why managers stiil need to take account of comparative advantage, in S.J. Evenett (ed.), Cloth for wine? The relevamce of Ricardo's comparative advantage in the 21st century, CEPR Press, 2017
Trade winds, School Briefs in The Economist, November 8th 1997
Ricardo D., On the principles of political economy of taxation, 1817 (London: John Murray, Albemarle-Street), (in chapter 7, par.16 Ricardo introduces the principle of comparative advantages)
International comparison of labour productivity and wages are available from the US Bureau of Labor Statistics

4. The regulation of international trade: trade policy instruments, domestic government and the WTO

* (H), chpt 7 (class presentation)
(S) Effects of a tariff
(S) Evaluating the controversy between free trade and protectionism
(S) Political economy and international trade
G
rossman G., Why we vote for protectionism, video interview on VOXEU, 11 January 2019.
Baldwin R., The WTO and the future of Multilateralism, Journal of Economic Perspective, 30, 1, Winter 2016.
Irwin D., A Brief History of International Trade Policy, Contributors' Forum, November 2001, The Library of Economics and Liberty
Bown C.P., D. Irwin, The urban legend: pre-GATT tariffs 40%, VoxEu 19 December 2015
WTO, Understanding the WTO, 2015, (9-14, 23-24, 101-111) 
Ossa R., WTO success: no trade agreement but no trade war, VoxEu, 11 June 2015
Hoekman  B., S. Jackson,  Reinvigorating the trade policy agenda: Think Supply Chain, VoxEu  January 2013 
Hufbauer G., The WTO lives on, the Doha Round does not, VoxEu, 21 December 2015

5. case study: Fashion industry and global market

presentation by Michele Tronconi (Sistema Moda Italia,Past President)

6. Foreign direct investments

* (H), chpts 8 (class presentation)
chpt 1 in Barba Navaretti G., A.J. Venables, Multinational firms in the world economy, Princeton University Press (2004) 
UNCTAD, World Investment Report  2017, July 2017

7. Regional economic integration

* (H), chpt. 9 (class presentation)

8. The concept of country competitiveness

class presentation
Sala-I-Martin X. et al. (2015), “Appendix: methodology and computation of GCI 2015-16",  in WEF, The Global Competitiveness Report
Delgado, Ketels, Porter, Stern (2012), The determinants of national competitiveness, NBERWP 18249, July.
Sala-i-Martin X., (2010), The Economics behind the World Economic Forum’s Global Competitiveness Index, in P. De Grauwe (ed.), Dimension of Competitiveness, MIT Press
Bloom, N., R. Sadun and J. Van Reenen (2008). “Measuring and Explaining Management Practices in Italy”, Rivista di Politica Economica, March-April;
Snowdon B., G. Stonehouse (2006), Competitiveness in a globalised world: Michael Porter on the microeconomic foundations of the competitiveness of nations, regions, and firms, Journal of International Business Studies

 Group Assignments for class presentation

Students should form 4 member groups. Each group should find a nickname. Members should stick to their groups throughout the course. The tasks each group is charged with is to prepare and present in class the assigned cases (2 for each group) and to write a short essay. The administration of the group, including the organization of meetings and the write-ups, is left to the group, by the understanding that this is a valuable managerial skill.

The tasks each group is charged with are:
1. Prepare a class presentation related to a case study included in the textbook or a Research Task included at the end of each textbook's chapter(assigned by the instructor)
2. Prepare a class presentation and a short paper (10 to 15 pages) on one of the topics suggested by the instructor (see the list below)
Task 2 is the one requiring the largest effort
Each presentation is expected to utilize standard software for class presentation. The time allocated to each presentation is 10 minutes for task 1 , 20 minutes for task 2. After each presentation 5 to 10 minutes will be allocated to class discussion.

Each group member will be asked to confidentially rate the overall effectiveness and contribution of his or her individual group colleagues, on a scale of 1 to 4, in the individual Final Exam. This rating by group colleagues will contribute to final mark (see Peer evaluation).

Suggested topics (some with introductory videos) for paper and class presentation (students can propose additional topics)

Secular stagnation
Globalization, poverty and inequality
Do different management practices matter for productivity? 
Why Europe an the West? Why not China?
Does culture matters for economic performance ?
Is there an European economic problem ?
How big are trade costs?
An old world ? 
Has the global economy a role in global warming?
What happened? East Asia vs Latin America
Free flows of goods and capitals. Barriers to flows of people.
ICT and economic growth
Medicine, patents and trips
The problem of water
Trade and social-labour standards

 Exam

The final mark for attending students will be obtained as follow:

35% Paper and class presentation
10% Peer evaluation
5% Class partecipation
50% Final written exam.

Non attending students should contact the instructor.