Stern School of Business New York University January 8, 2008 THE GLOBAL ECONOMY B01.2303.85 Stern Lehman MBA Alliance – Group 6 January – April 2008 Paul Wachtel The Global Economy provides a framework for understanding and analyzing the causes and consequences of domestic and international macroeconomic events. The objective of this course is to provide decision-makers with a systematic understanding of critical aspects of the international business environment. We examine the forces driving toward globalization—the integration of national business activities into globally competitive markets. We also examine forces that maintain differences between countries and regions. The class provides a framework for examining and explaining the major economic issues facing both the United States and the global economy. Class discussions will provide opportunity to discuss contemporary issues. Paul Wachtel KMEC 7-69 212 – 998 - 4030 [email protected] AND OTHER MATERIAL: David Miles and Andrew Scott, Macroeconomics and the Global Business Environment, 2nd ed., 2005. (M&S) Joseph Stiglitz, Making Globalization Work, 2005 Paul Blustein, The Chastening, 2003. Additional materials will be distributed by email or in class and/or posted on the Blackboard web site. Students will be expected to keep up to date with current macroeconomic events by reading at least one of the following regularly: Wall Street Journal, Financial Times or The Economist. The RGE Monitor – the renowned Roubini Global Economics data and information source maintained by Stern’s Prof. Nouriel Roubini – is a useful resource for finding information for the presentations. It is available to all Stern students. To register for it, you need to use a campus computer; the registration screen will allow free registration as long as a valid NYU email address is used for registration. After registration, RGE can be accessed from any computer with your username and password. http://www.rgemonitor.com/ Lehman’s own Global Weekly Economic Monitor and other economics publications are often worth a look. You should know how to get hold of these.3 COURSE REQUIREMENTS: 1. Assignment due February 1st – Essay on Stiglitz book. See the description. 2. Group data report: Each study group will make a 5-10 minute presentation during the intensive week on data announcements that will be taking place in January. See the description and make sure that you are prepared. 3. Group presentation and paper: Each study group is required to make a 30 minute class presentation and prepare an evaluative paper. Topics will be chosen at the first class and presentations will begin on February 6th. See the full description of this assignment. 4. Three 20 minute quizzes. 5. Additional short written assignments and homeworks. 6. Class discussions of cases, current events or of an article distributed in advance will be announced. Students will be expected to participate in the discussion if called upon.4COURSE SCHEDULE 1. January 28 PM Data report Study Group #5 2. January 29 AM Data report Study Group #4 3. January 30 PM Data report Study Group #1 4. January 31 AM Data report Study Group #3 5. February 1 AM Data report Study Group #2 Assignment on Stiglitz 6. February 6 Quiz 1 - Trade Presentation Study Group #4 7. February 20 Presentation Study Group #5 8. March 5 Quiz 2 – Growth and productivity Presentation Study Group #1 9. March 19 Presentation Study Group #2 Assignment on Blustein Discussion of March 18 FOMC meeting 10. April 2 Presentation Study Group #3 Quiz 3 - Final5 Assignment due Feb. 1 – Essay on Stiglitz’s book “Making Globalization Work” addresses a large number of macro and micro issues that Joe Stiglitz finds problematic. That is aspects of globalization with outcomes that are not entirely wonderful. We will spend much of the course touting the benefits of globalization but we should know our limits. So, I would like you to read this book before we start classes – it also serves as an excellent introduction to our subject and will hopefully motivate your interest. The assignment for Feb. 1st is simple. Pick one of Stiglitz’s problems with globalization and one solution or response to that problem that is suggested. In a 2 page (double or 1½ spacing, 2 page absolute maximum, no exceptions) essay provide a clear statement of the problem and the solution. You should explain how the solution addresses the problem. Feel free to disagree – Stiglitz may not always be right.6Data Report: Is the recession of 2008 underway? During our intensive class week, January 28-February 1, each study group will make a short (5-10 minute presentation) on some recent data announcements. The study groups have been assigned randomly as follows. Assignments for data reports Study group Date Announcements Day of announcement #5 Mon. Jan. 28 Employment situation Jan. 4 #4 Tues, Jan, 29 Manufacturer’s Shipments, Inventories and Orders Jan. 3 #1 Wed. Jan. 30 Industrial production and capacity utilization Jan. 16 #3 Thurs. Jan. 31 Producer Prices Consumer Prices Jan. 15 Jan. 16 #2 Fri. Feb. 1 Advanced retail sales Business inventories Jan. 15 Jan. 15 To prepare you can go the data announcement calendar at the NY Fed web site and follow the links associated with your announcement: http://www.newyorkfed.org/research/national_economy/nationalecon_cal.html You can also look for some charts at the same site: http://www.newyorkfed.org/research/national_economy/nationalindicators.html You can do this in advance of the announcement date to see what happened last month and to learn about the data. Also, data are presented and discussed in Lehman’s Global Weekly Economic Monitor. Finally, newspaper articles and other web sources can provide more information. Your report should include the following: • Describe the information announced. What does it tell us? • What are the new data announced? Provide some perspective that helps us interpret the number. • Tell us whether the new information is surprising and / or important. A few PowerPoint slides might be helpful in order to show the data to the class. No written report is required.7 Group Presentations and Paper Each study group is required to make a class presentation. I have assigned dates randomly for each study group. (Changes are allowed by mutual agreement.)