Course Description

For the past decade or so, “globalization” has been the media buzzword used to describe changes in the US and world economies, perhaps second in recent years only to “the New Economy” in frequency of use. For the most part, this discussion of globalization has focused on changes that seem apparent in contrast to the period following WWII. According to one popular version of this story, in the 1970s the barriers to cross-border trade and financial transactions began to come down. By the late 1990s, as one commentator put it, we lived on the cusp of a “borderless world,” where people, information, equipment and ideas would flow freely. In this context, it was imagined, the world would prosper as never before.

During the post-war period, global cross-border trade and financial transactions were a fraction of what they are today. For many developed countries, the increased trade of the past few decades has meant a decline in the importance of manufacturing, as production of everything from cars to shoes has moved to places where labor was relatively cheap. For a few developing countries, this has meant increased investment from rich developed nations. But for many—especially countries in Sub-Saharan Africa and Latin America, to say nothing of the ex-manufacturing sectors of the developed world—so-called “globalization” has brought few, if any, of the beneficial effects once imagined. Or so it would seem.

This course begins where the theory of the global economy and its reality meet. In general, the course highlights the theory of free trade, since it is on the back of this theory that the promise of globalization—or we might say, economic liberalization—rests. As we will see, the most recent episode of economic liberalization is but a small part of the whole story, although our recent experiences can tell us a good deal about how free trade might or might not work, and for whose benefit.

The course is divided into eight basic units, each exploring an important topic for understanding the global economy.

• A Historical and Contemporary Overview of Globalization
• Why Trade?
• The Case for Protection
• The WTO and its Critics
• Exchange Rate Systems and Financial Crisis
• The IMF and World Bank
• Trade with the Poor
• Trade Blocs and Regional Integration