2014-2015 Economics Courses
Political Economics of Energy and Climate Change
Humanity faces perhaps its greatest-ever collective challenge in the need to reduce greenhouse gas emissions to prevent catastrophic global climate change. Many of the solutions for doing so involve changes to how societies produce and consume energy, specifically by improving energy efficiency and employing more renewable energy. In this course, we will examine the threat that climate change poses and how we may avoid its worst impacts from the perspectives of both environmental and ecological economics. How should the present generation value the impact of its actions on future generations? How should societies determine the proportion of resources to devote to mitigating climate change instead of adapting to its impacts? Who should reduce greenhouse gas emissions, and by how much? What are the political and institutional barriers to doing so? Which policies can best be used to regulate emissions? Why is renewable energy such a small portion of the energy portfolio in most economies? Exploring these questions will involve investigating economic theory and the political economy of climate change policy both in the United States and in other major economies, and we will consider how a low-emissions economy can be more equitable and improve well-being for most of its constituents.
Introduction to Economic Theory and Policy
Economics explores the ways in which people organize themselves to sustain and enhance their quality of life and well-being. Societies throughout history and across the globe have developed numerous ways of coordinating economic activity through a variety of institutional arrangements. This introductory course will introduce basic economic concepts and contemporary issues from a variety of schools of thought, including insights from neoclassical, Keynesian, Marxist, institutionalist, and behavioral economists. We will use the tools developed in the course to explore some of the central questions of economics. Why is capitalism the dominant economic system throughout the world? Why are some countries poor while others are rich? How do institutions shape economic outcomes? How do people and firms make choices about what to buy and produce? How does the level of competition between firms in a market impact their decisions? What are some of the causes and economic consequences of unemployment and inflation? How do we measure economic activity in a society to include market and household production, as well as considerations for environmental degradation? To what extent can policy makers impact key economic indicators? We will also look at the causes of the 2008 global financial crisis and subsequent weak recovery, the recent European economic crisis, the fiscal position of the US government, and other issues that economists and policy makers are debating now.
Economics of Inequality
Over the past 30-40 years, inequality has significantly increased in most developed economies and has virtually exploded in the United States. The causes and consequences of this heightened inequality are of great interest to social scientists and political actors. In this course, we will review the history of inequality and the manner in which it has been addressed by economists. We will investigate potential consequences for economic dynamism and political democracy of ever-increasing wealth and income disparities and declining social mobility. This will form a foundation from which we can discuss questions that are especially poignant for contemporary societies and policy makers. Why do some groups see record increases in wealth and income, while others see theirs stagnate or decline? Is there an optimal level of inequality? If so, what is it? What sorts of policies can help achieve that level, and to what extent is inequality determined by deeper economic factors like technology and historical patterns of education and wealth? The first part of the course will explore different ways in which to measure and conceive of inequality and its historical trends both within and between countries. In the second part, we will discuss and analyze theories of inequality from neoclassical, Marxian, institutionalist, and other perspectives. Finally, we will examine the sources and consequences of inequality, including potential policy solutions. This will entail delving into relevant research from other social science disciplines such as psychology and sociology.
Industrial Competition, Labor Relations, and Social Democracy: Controversies, Challenges, and Prospects
Contemporary economists who deal with labor relations (e.g., the analysis of wage determination and working conditions) do not explicitly discuss business investment and competitive decisions, while scholars in the industrial organization literature (who study the business firm and competition) do not deal with issues surrounding labor relations. And yet, in the real world, labor relations and industrial organization shape each other and the welfare state in complex ways. The purpose of this course is to investigate the nexus between these issues in both theoretical and historical terms and the implications for the development of the welfare state. The course has two broad parts. In the first part, we will investigate controversies regarding the nature of the business enterprise. It is part of the conventional discourse on economic policy that free-market competition is the key to bringing about national wealth creation with rising standards of living. Yet there is considerable debate in the literature on industrial organization theory regarding the nature of the capitalist firm and the environment within which it grows or dies. Drawing on the classic writings of Schumpeter, the Oxford Economists’ Research Group, the Institutionalist tradition, and others, this part of the class will introduce students to a wide variety of theoretical perspectives on the firm by contrasting the textbook neoclassical theories of the firm with other theoretical perspectives. In the second part of the course, we will investigate—from both a historical and an international perspective—the concrete institutional and political contexts that have led to particular links between business investment, labor relations, and social policy. We are particularly interested in investigating the ways in which business power and preferences have shaped social democratic (or progressive) labor and welfare state policies in the United States, Sweden, and Germany. This course requires some background in economics/social sciences and an interest in historically informed analysis.
Critical Political Economics: Historical Foundations to Contemporary Issues
Karl Marx’s analysis of capitalism remains one of the most significant contributions to economic theory in the history of economic thought. This course will focus on Marx’s analysis of capitalism—although, when relevant, we will also discuss other authors such as Adam Smith, David Ricardo, Karl Polanyi, and Joseph Schumpeter. We will begin with the notion of surplus value and extend it to a general discussion of Marx’s distinction between production and nonproduction activities. We will then proceed to the analyses of capital accumulation, technological change, industrial competition, the recurrence of generalized economic crises, and the persistence of unemployment. Marx’s theory of competition will be used to study two issues: first, to study wage differentials on the basis of race and gender faced by workers with similar skill levels; and second, to discuss rent in agriculture and mining, an issue that will lead to the analysis of oil crises. Readings will primarily draw on selected sections from Capital (volumes I, II, and III), as well as some writings of a number of contemporary political economists. This course requires some background in economics/social sciences and an interest in historically informed analysis.
First-Year Studies: Introduction to Development Studies
There is no consensus on what “development” is or how it can be achieved. In this course, students will be exposed to a wide range of debates and theories on the political economy of “development” in which the analytical framework will draw on several different disciplines—including economics, history, politics, and sociology—to investigate the challenges confronting countries in Latin America, Asia, and Africa as they have evolved historically. The objective of the course is for students to understand how the question of “development” has to be put in the context of unequal power relations within and between countries in the global political economic system. The course will enable students to engage contemporary debates on “development,” debates that essentially rage between, on the one hand, those who argue that free trade and transnational corporations will tend to reduce international inequalities and, on the other hand, those who argue that these are the factors that cause the inequalities and marginalize countries in less developed countries (LDCs). Further, the debate is also about the extent and scope of state involvement. We will pose the following questions and seek to engage the controversies that they have engendered. What are the historical roots of international inequalities? Should there be more or less government involvement in lowering international inequalities and domestic poverty? Should states in LDCs be involved in promoting industrialization and improving social protection, or should these goals be left to the free market? What was the historical experience of the industrialized countries with regard to the role of the state? Why have some states been more successful than others in promoting “development”? This course is for students who are interested in taking an interdisciplinary and historically-informed approach to analyzing domestic and international inequalities.
Political Economy of Women
What factors determine the status of women in different societies and communities? What role is played by women’s labor, both inside and outside of the home? By cultural norms regarding sexuality and reproduction? By religious traditions? After a brief theoretical grounding, this course will address these questions by examining the economic, political, social, and cultural histories of women in the various racial/ethnic and class groupings that make up the United States. Topics to be explored include: the role of women in the Iroquois Confederation before white colonization and the factors that gave Iroquois women significant political and social power; the status of white colonist women in Puritan Massachusetts and the factors that led to the Salem witchcraft trials; the position of African American women under slavery, including the gendered and racialized divisions of labor and reproduction; the growth of competitive capitalism in the North and the development of the “cult of true womanhood” in the rising middle class; the economic and political changes during Reconstruction and the complex relationships between African American and white women in the abolitionist and women’s rights movements; the creation of a landless agricultural labor force and the attempts to assimilate Chicana women into the dominant culture via “Americanization” programs; the conditions that encouraged Asian women’s immigration; the American labor movement and the complicated role that organized labor has played in the lives of women of various racial/ethnic groups and classes; the impact of US colonial policies on Puerto Rican migration and Puerto Rican women’s economic and political status; the economic/political convulsions of the 20th century—from the trusts of the early 1900s to World War II—and their impact on women’s paid and unpaid labor; the impact of changes in gendered economic roles on LGBT communities; the economic and political upheavals of the 1960s that led to the so-called “second wave” of the women’s movement; and, finally, the current position of women in the US economy and the possibilities for inclusive public policies concerning gender and family issues.
This Time Is Different: Money and Financial Crises in Historical Perspective
This course will explore the functions and meanings of money from the earliest known use of trading accounts in ancient Ur to the world financial crisis of 2008 and beyond. After a brief foray into the theory and mechanics of money, we will begin by addressing a variety of historical issues, including: the changing role of money and credit in pre-capitalist economic systems; the role of money and credit in medieval Europe and in Europe’s transition to capitalism; the relationship between hegemonic international powers (e.g., Pax Britanica) and international currency systems; the US banking disaster of the late 1920s/early 1930s and the changing role of the state vis-à-vis US banking (e.g., the Glass Steagall Act); postwar Pax Americana and the Bretton Woods system, including the development of modern tools of monetary policy; globalization, neoliberalism, and the increasing incidence of international currency crises; currency crises in developing countries (e.g., the Mexican and Asian crises); the IMF’s structural adjustment policy responses and their implications for development; a detailed analysis of the 2008 world financial crisis and of the US and international responses (e.g., TARP, CCAR, Fed “special facilities,” and Dodd-Frank); and the tools of and prospects for stabilizing the domestic and international financial systems in the wake of 2008 (e.g., Basel III). Along the way, we’ll address a variety of theoretical issues from both orthodox and heterodox perspectives. In addition to regular short papers on a variety of assigned readings, students will work in groups to research and make presentations on topics related to international finance (e.g., the Swedish banking crisis of the early 1990s and that government’s response); Islamic banking and finance: its meanings and dynamics; questions of currency exchange rate manipulation for purposes of competitive advantage (e.g., the Chinese renminbi); and the viability and future of the Euro.
Macroeconomic Theory and Policy
Macroeconomics studies the dynamics of an economy as a whole, looking at the forces that lead to economic growth or recession, the overall distribution of income, and the causes of unemployment and inflation. Different schools of economic thought offer varying and often contradictory explanations of these dynamic trends. Public policy debates play a central role in this discussion, as the different macroeconomic models have implications for the roles of fiscal and monetary policy, the desirable level of governmental intervention into and regulation of the private economy, and even what constitutes a good macroeconomic outcome. In this course, we will build and examine the competing macro models beginning with Keynes and moving up to the present theoretical debates—including the monetarist, new classical, neo-Keynesian, post-Keynesian, and political economic schools of thought—with attention to their differing policy implications. We will then focus on the 2008 financial crisis and its aftermath as a case study, examining the debates about its causes and appropriate policy responses. This course requires a background in economics.
Political Economics of the Environment: Sustainable Development
The seventh of the United Nations Millennium Development Goals reads: “Ensure environmental sustainability.” Indeed, on the surface, sustainable development is a goal about which everyone could agree. Who would be for unsustainable development? In fact, there is no consensus on the meaning of the term. Some definitions emphasize the importance of preserving natural capital for future generations, while others aggregate all forms of capital together—arguing that our only obligation to the future is access to an equivalent standard of living. A related dispute is over the relationship between environmental sustainability and human well-being, as well as how the relationship may differ by gender, class, and other factors. This course will examine these differing views of sustainable development, both in theory and through the examination of specific development projects. Economists approach environmental questions through three differing theoretical schools: environmental economics, ecological economics, and political economics. These schools use differing techniques to value the environment, offer different understandings of what would be good environmental and economic outcomes, and advocate different policies to achieve sustainability. Underlying these differences are political economic questions of the distribution of power and resources, both globally and within specific countries. This course will explore the range of views, with an emphasis on understanding the assumptions underlying their disagreements and on the policy implications of these views. Topics will include the policies of the World Bank, sustainable agriculture, the controversial issue of resource privatization, and cases of specific commodities such as gold and cotton that illuminate the problems and complexities of sustainable development.