Economics 161 — Spring 2011Global Integration of Latin AmericaApril 6, 2011Instructor: Marc-Andreas MuendlerOffice: Economics 312Office hours: Wed 9:30am-10:30amPhone: (858) 534-4799E-mail: [email protected]: Warren Lecture Hall 2005Class Time: TuTh 2:00pm-3:20pmClass Web Page: econ.ucsd.edu/muendler/teach/11s/161Section ID 715357Teaching Assistants: Kristy Buzard Ketki Sheth Sam YoungE-mail: [email protected] [email protected] [email protected]: Econ 123 Sequoyah 237 Econ 126Office hours: Thu 1:00pm-2:00pm Thu 3:30pm-5:00pm Thu 9:00am-10:00am1 Course ObjectivesThis course examines economic development in Latin American and Caribbean countries underthe perspective of their integration into the global economy. The course discusses trade in pri-mary and manufactured goods and regional trade agreements, international capital flows to LatinAmerica, financial vulnerabilities, as well as policy responses and their interaction with poverty,income inequality and growth. The course covers underlying economic concepts to inform theanalysis of trade regimes, international investments, and foreign debt management.Students work together in randomly formed groups that foster the interaction between eco-nomists and non-economists. In these work groups, students write a 3-to-4-page paper on a de-velopment issue in Latin America and select one or more group representatives for an in-classpresentation and subsequent open discussion.2 PrerequisitesEcon 1A-B or Econ 1 and 3.3 ReadingsLecture notes become available online at econ.ucsd.edu/muendler/teach/11s/161 before each class.Textbook: Franko (2007)/ch. 3, 4, 7, 8, 9, and 10Main readings: Dom´ınguez (2010); Easterly (2001)/ch. 6; Fern´andez-Armesto (2003)/ch. 7;Fukuyama (2010); L´opez-Calva and Lustig (2010); Pugel (2004)/ch. 3 and 201Background readings: Barros, de Carvalho, Franco, and Mendonc¸a (2010), Birdsall and Graham(2000), Esquivel, Lustig, and Scott (2010), Fraga (2004), Hamilton (2009), Loungani and Razin(2001), Lustig (2008), Ocampo (2004), Rodrik and Subramanian (2003)The textbook provides the main reference to economic change in Latin America. The main read-ings are intended to help you review conceptual lecture material beyond the textbook and tocomplement the textbook on recent economic change. The background readings provide addi-tional facts and discussion. Most readings are available electronically through the class web pageat econ.ucsd.edu/muendler/teach/11s/161. Web links to copyrighted readings only work from on-campus domains.4 Group Paper and PresentationsTo instill interaction between you and your classmates from diverse academic backgrounds, partof your course work is dedicated to a 3-to-4-page group paper in favor or against a select topic onLatin America’s global economic integration. You will work in a group of four to six students onone of the following eight topics, and will have to argue either in favor or against the topic:1. Tue, April 26: International trade in Latin AmericaReaders: Kristy Buzard and Sam Young(a) NAFTA for Mexico: Success or Failure(b) The MERCOSUR trade agreement: Deepen or Expand(c) Trade in primary products: Embrace or Reject(d) Fair trade: Promote or Dismiss2. Tue, May 31: International capital markets in Latin AmericaReader: Ketki Sheth(a) Privatization of public companies: Pursue or Stop(b) Private foreign investment: Promote or Reduce(c) IMF and World Bank loans: Expand or Cut(d) Taxes on short-term capital: Blessing or CurseYour goal is to present a compelling case to your classmates.There will be 32 groups, and each group will select a representative. The first 16 group repre-sentatives will present their cases in favor or against the assigned topic during class on Tue, April26 (International Trade in Latin America), and the next 16 group representatives will make their caseson Tue, May 31 (International Capital Markets in Latin America).Group assignments are determined by random draw. You will be informed on Tue, April 12whether you will work with a group to present on Tue, April 26 or to present on Tue, May 31. If itis your group’s draw to present on April 26, you will also be informed of your topic and whetheryour group argues in favor or against the issue. Students with presentations on May 31 will beinformed on Tue, May 17 of their group members, their topic and whether they will argue in favoror against the issue.Password-protected lists with groups and topic assignments will be posted on the class webpage on April 12 and on May 17. In addition, class-wide e-mails will be sent on Wed, April 13 and2on Wed, May 18 as a reminder to all enrolled students, showing groups and topic assignments. Itis your responsibility to inform your group mates if your working e-mail address is not the onelisted.The group paper should be three to four pages in length, and cover the topic using a social sci-entist’s tools: sound and educated arguments based on the adequate literature, substantiated withsuitable figures and quantitative tables. Brevity forces you to make concise and clear arguments.Please see a short summary of recommendations for economical writing on the class web page.You can discuss drafts of your 3-to-4-page papers with Kristy Buzard, Ketki Sheth, Sam Young orMarc Muendler, after class and during office hours.You are expected to contribute to the group work on your project in a fair manner. A failure tocontribute fairly will result in a score of zero or substantially below the group score.A physical copy of the final draft of your paper is due at 4:30pm on the Monday prior to yourpresentation. Papers for presentation on April 26 are due on Mon, April 25 at 4:30pm in SamYoung’s office (Econ 126), papers for presentation on May 31 are due on Mon, May 30 at 4:30pmat Ketki Sheth’s office (Sequoyah 237). Apply proper citations. Principles of academic honesty arestrictly applied.If your group representative(s) wish(es) to use electronic resources for presentation, pleasesend an e-mail with the according files before 5:00pm on the day prior to your presentation (submitto Sam Young at [email protected] by April 25 or to Ketki Sheth at [email protected] by May 30).The group representatives’ class-room statement should be concise and compelling, it should notexceed three (3) minutes in length and be based on the group paper (using at most 4 slides). Therewill be two presenters in favor and two against each topic. The two presenters in favor or againsta topic are