Economics 183Topics in International Economics

Professor Barry Eichengreen

Spring 2007

Office hours: Wednesday 2:00-4:00 p.m.

Email capple@econ.berkeley.edu to make an appointment.
SYLLABUS AND READING LIST
Economics 183 is an advanced undergraduate seminar in international economics
intended for students who have previously taken Economics 181 and 182 and/or have the
consent of the instructor. The course is designed to introduce a selection of current policy
issues in international economics and to provide an opportunity for students to apply
models to which they have been exposed in previous work.
The grade for this course will be based equally on four components: a class presentation,
three weekly papers, a literature review, and a term paper.
Presentation. Each student, individually or as part of a team, will take charge of a week
and its topic. His/her presentation should be discussed with the instructor, during his
office hours prior to presentation. It will be graded on the basis of how well the student
defines the question posed in the articles assigned for the week, presents and analyzes the
competing points of view, and guides classroom discussion.
Weekly Papers. The second component of the grade will be based on three weekly
papers. Each student will pick three assigned topics, and for each write a three-page
overview. The three-page paper must be turned in at the beginning of the relevant class
meeting. The goal of the paper should be to state as clearly as possible the key question
posed by the readings for the week, summarize and critique the authors views on the
question, and state the students own position on the controversy.
Literature Review. The third component of the grade will be a 10-page literature review
due in week 8 of the course. The student is expected to take one of the weekly topics and
read more broadly (that is, to read more than simply the assigned items for that week).
Using those additional readings, he/she should then attempt to provide a more complete
and convincing answer to the question posed by the weeks required readings. Clarity of
exposition will count toward the grade.
Term Paper. In lieu of a final exam, students will turn one of their literature reviews
into a 20 page term paper, due one week following the final class meeting. Whereas the
literature review simply surveys and synthesizes the views of others, the term paper
should have an original research component.

The weights for the grade will be 25 percent literature review, 25 percent classroom
presentation, 25 percent for the three weekly papers, and 25 percent term paper. In
addition, students are expected to contribute to classroom discussion; informed
contributions will be counted as extra credit toward the students grade. Most of the links
below can be found through http://sunsite2.berkeley.edu:8000/ on campus computers
only.
===============================================================

READING LIST
January 16. Introduction
January 23. Global Imbalances
Menzie D. Chinn (2005), Getting Serious About the Twin Deficits, Council Special
Report Number 10, New York: Council on Foreign Relations, (September),
http://wage.wisc.edu/uploads/News/Twin_DeficitsTF.pdf
Barry Eichengreen (2006), Global Imbalances: The Blind Men and the Elephant,
Brookings Policy Brief 1, (January)
http://www.brookings.edu/views/papers/200601_iiep_eichengreen.pdf
Yin-Wong Cheung, Menzie Chinn and Eiji Fujii (2006), The Overvaluation of Yen
Undervaluation, unpublished manuscript, University of Wisconsin, Madison,
(September),
http://emlab.berkeley.edu/users/webfac/eichengreen/e183_sp07/e183.shtml
January 30. The Management of Foreign Exchange Reserves
Joshua Aizenman and Jaewoo Lee (2006), Financial versus Monetary Mercantilism: A
Long Run View of International Reserve Hoarding, unpublished manuscript, University
of California, Santa Cruz, (September),
http://emlab.berkeley.edu/users/webfac/eichengreen/e183_sp07/e183.shtml
Dani Rodrik (2006), The Social Cost of Foreign Exchange Reserves, (January),
http://papers.nber.org/papers/w11952.
Lawrence Summers (2006), Reflections on Global Current Account Balances and
Reserve Accumulation, speech to the Reserve Bank of India, Mumbai, (24 March),
http://www.rbi.org.in/scripts/PublicationsView.aspx?Id=8304
Y.Y. Reddy (2006), Foreign Exchange Reserves: New Realities, New Options,
(September), http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=300

February 6. Reassessing Financial Globalization

M. Ahyan Kose et al. (2006), Financial Globalization: A Reappraisal, unpublished
manuscript, International Monetary Fund, (February),
http://www.imf.org/external/pubs/cat/longres.cfm?sk=19435
Sebnem Kalemli-Ozcan, Laura Alfaro, and Vadim Volosovich (2005), Why Doesnt
Capital Flow from Rich to Poor Countries? NBER Working Paper no. 11901,
http://papers.nber.org/papers/w11901.
Raguhram Rajan (2006), Foreign Capital and Economic Growth, unpublished
manuscript, International Monetary Fund, (August),
http://www.kansascityfed.org/publicat/Sympos/2006/pdf/PrasadRajanSubramanian.0811.
pdf
February 13. Emerging Market Risks
World Bank (2005), Global Imbalances and Emerging Market Economies, in World
Bank, Global Development Finance, Washington, D.C.: The World Bank, pp. 51-64,
http://siteresources.worldbank.org/INTGDF2005/Resources/gdf05_ch3.pdf
Barry Eichengreen and Yung Chul Park (2006), Global Imbalances and Emerging
Markets, unpublished manuscript, University of California, Berkeley,
http://www.iwep.org.cn/web/20060911/Global%20Imbalances%20and%20Emerging%2
0Markets%20%20%20Barry%20Eichengreen,%20Yung%20Chul%20Park.pdf
Guillermo Calvo and Ernesto Talvi (2006), The Resolution of Global Imbalances: Soft
Landing in the North, Sudden Stop in Emerging Markets? unpublished manuscript,
University of Maryland and Interamerican Development Bank, (August),
http://www.sciencedirect.com/science/article/B6V82-4KPGNS85/2/349cb03de1ae57a5342f4005cf75c6df
February 20. Reforming the International Monetary Fund
Edwin Truman (2006), Overview on IMF Reform, in Reforming the IMF for the 21st
Century, Washington, D.C.: Institute for International Economics, Chapter 2, pp. 31-126,
http://www.iie.com/publications/chapters_preview/3870/02iie3870.pdf
Mervyn King (2006), Reform of the International Monetary Fund, (February),
http://www.bankofengland.co.uk/publications/speeches/2006/speech267.pdf
International Monetary Fund (2006), Interim Report of the Managing Director on Reform
of the International Monetary Fund, (20 April),
http://www.imf.org/external/np/pp/eng/2006/042006.pdf

February 27. Reforming the World Bank

Center for Global Development (2006), Rescuing the World Bank, Washington, D.C.:,
http://www.cgdev.org/content/publications/detail/9957
March 6. Inflation and Globalization
Kenneth Rogoff (2006), Impact of Globalization on Monetary Policy, paper presented
to the annual Jackson Hole symposium of the Federal Reserve Bank of Kansas City,
(August), http://www.kc.frb.org/PUBLICAT/SYMPOS/2006/pdf/rogoff.paper.0829.pdf
Claudio Borio and Andrew Filardo (2006), Globalization and Inflation: New CrossCountry Evidence, unpublished manuscript, Bank for International Settlements,
(September), http://emlab.berkeley.edu/users/webfac/eichengreen/e183_sp07/e183.shtml
Thomas Helbing et al.,(2006), How Has Globalization Affected Inflation? World
Economic Outlook, Chapter 3, Washington, D.C.: IMF, (April),
http://www.imf.org/external/pubs/ft/weo/2006/01/pdf/c3.pdf
March 13. Outsourcing
Richard Freeman (2006), The Great Doubling: The Challenge of the New Global Labor
Market, unpublished manuscript, Harvard University, (August),
http://emlab.berkeley.edu/users/webfac/eichengreen/e183_sp07/e183.shtml
Richard Baldwin (2006), Globalisation: The Great Unbundling(s), Economic Council
of Finland, Prime Ministers Office, (20 September),
http://www.vnk.fi/hankkeet/talousneuvosto/tyo-kokoukset/globalisaatioselvitys-92006/artikkelit/Baldwin_06-09-20.pdf
Catherine Mann (2005), This is Bangalore Calling: Hang Up or Speed Dial: What
Technology-Enabled International Trade in Services Implies for the U.S. Economy,
manuscript, Institute for International Economics, (January),
http://www.iie.com/publications/papers/mann0105.pdf
Alan Blinder (2006), Offshoring: The Next Industrial Revolution? Foreign Affairs 85,
pp. 113-128,
http://www.internationaltraderelations.com/Blinder.Offshoring%20(Foreign%20Affairs,
%20March-April%202006).pdf

March 20. Europe and the Euro: Doomed to Fail?

Philip R. Lane (2006), The Real Effects of EMU, IIIS Discussion Paper no. 115
(January), http://www.tcd.ie/iiis/documents/discussion/pdfs/iiisdp115.pdf
Paul De Grauwe (2006), What Have We Learnt about Monetary Union since the
Maastricht Treaty? unpublished manuscript, Catholic University of Louvain, (January),
http://www.blackwell-synergy.com/doi/pdf/10.1111/j.14685965.2006.00659.x?cookieSet=1
Paul De Grauwe (2006), On Monetary and Political Union, unpublished manuscript,
Catholic University of Louvain, (May),
http://www.financesinternationales.sciencespo.fr/seminaire_conf/article_paul_de_grauwe.pdf
Olivier Blanchard (2006), An Economic Survey of Europe, unpublished manuscript,
MIT (September), http://econ-www.mit.edu/faculty/download_pdf.php?id=1392
April 3. U.S. and European Employment and Productivity Growth Compared
Olivier Blanchard (2004), The Economic Future of Europe, Journal of Economic
Perspectives 18, pp. 3-26, http://papers.nber.org/papers/w10310.pdf
Edward Prescott (2003), Why do Americans Work So Much More than Europeans?
Federal Reserve Bank of Minneapolis Research Staff Report 321, (November),
http://www.minneapolisfed.org/research/qr/qr2811.pdf
Alberto Alesina, Alberto, Edward Glaeser and Bruce Sacerdote (2005), Work and
Leisure in the U.S. and Europe: Why So Different? NBER Working Paper no. 11278,
(April), http://papers.nber.org/papers/w11278
April 10. Challenges to Chinese Growth
OECD (2005), Key Challenges for the Chinese Economy, in OECD Economic
Surveys: China, Chapter 1, pp. 27-69, (September),
http://puck.sourceoecd.org/vl=3504129/cl=15/nw=1/rpsv/cgibin/fulltextew.pl?prpsv=/ij/oecdjournals/03766438/v2005n13/s1/p1l.idx
Edwin Lim, Michael Spence and Ricardo Hausmann (2006), China and the Global
Economy: Medium Term Issues and Options A Synthesis Report, Working Paper no.
126, Center for International Development, Harvard University, (June),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=902379

April 17. Challenges to Indian Growth

Dani Rodrik and Arvind Subramanian (2004), From Hindu Growth to Productivity
Surge: The Mystery of the Indian Growth Transformation, IMF Working Paper no.
04/77, (May), http://www.imf.org/external/pubs/cat/longres.cfm?sk=17313
Abhijit Banerjee and Lakshmi Iyer (2005), History, Institutions and Economic
Performance: The Legacy of Colonial Land Tenure Systems in India, American
Economic Review 95: 4 (September), pp. 1190-1213,
http://globetrotter.berkeley.edu/macarthur/inequality/papers/BanerjeeLandTen.pdf
Kalpana Kochhar, Utsav Kumar, Raghuram Rajan and Arvind Subramanian (2006),
Indias Pattern of Development: What Happened, and What Follows? NBER Working
Paper no 12023, (February), http://papers.nber.org/papers/w12023
April 24. How Will the World Adapt to China and India?
L. Alan Winters and Yusuf Shahid (2006), Introduction, in World Bank, Dancing with
Giants: China, India and the Global Economy, Washington, D.C.: The World Bank,
pp. 1-26,
http://siteresources.worldbank.org/INTCHIINDGLOECO/Resources/CE_Ch01pp.001026_FINAL.pdf
Yusuf Shahid, Kaoru Nabashima and Dwight Perkins (2006), China and India Reshape
the Global Industrial Geography, in World Bank, Dancing with Giants: China, India
and the Global Economy, Washington, D.C.: The World Bank, pp. 27-56,
http://siteresources.worldbank.org/INTCHIINDGLOECO/Resources/CE_Ch02pp.02756_FINAL.pdf
Barry Eichengreen and Hui Tong (2006), How China is Reorganizing the World
Economy, Asian Economic Policy Review 1, pp.73-101,
http://www.aeaweb.org/annual_mtg_papers/2006/0106_1430_1702.pdf
May 1. Why Doesnt South Africa Grow Faster?
Dani Rodrik (2006), Understanding South Africas Economic Puzzles, Working Paper
no. 130, Center for International Development, Harvard University (August),
http://www.polity.org.za/pdf/HarCID130.pdf
Ricardo Hausmann and Bailey Klinger (2006), South Africas Export Predicament,
Working Paper no. 129, Center for International Development, Harvard University,
(August),
http://cfapp1-docs-public.undp.org/eo/evaldocs1/sfcle/eo_doc_567062840.pdf

May 8. Why Doesnt Latin America Grow Faster?

William Easterly, Norman Loayza and Peter Monitiel (1997), Has Latin Americas PostReform Growth Been Disappointing? Journal of International Economics 43,
pp. 387-408,
http://www.worldbank.org/html/dec/Publications/Workpapers/WPS1700series/wps1708/
wps1708.pdf
Eduardo Fernandez-Arias and Peter Montiel (1997), Reform and Growth in Latin
America: All Pain and No Gain? Working Paper no. 351, Washington, D.C.:
Interamerican Development Bank (June),
http://www.williams.edu/Economics/wp/Montielreformandgrowth.pdf
Ricardo Hausmann and Andres Velasco (2005), Slow Growth in Latin America:
Common Outcomes, Common Causes? unpublished manuscript, Harvard University,
http://ksghome.harvard.edu/~rhausma/docs/slowgrowth_salamanca_0510.pdf