INFX523-03x course syllabus - Welcome | edX StudioGeorgetownX+NFX523-0… · · 2016-01-23Course’Syllabus ’ GeorgetownX ’ ... Course’Wiki ’is!a!place!for ... organizations,!EITI,!sweatshop!abuses,!agency,!labor!standards,!gender!issues,!minimum!wage!versus!living!

JANUARY 25, 2016 – MAY 2, 2016

Course Syllabus

GeorgetownX

INFX523-‐03

Self-‐paced Course

2016

GeorgetownX: GLOBALIZATION’S WINNERS AND LOSERS: CHALLENGES FOR DEVELOPED AND DEVELOPING COUNTRIES

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TABLE OF CONTENTS

Lead Faculty ............................................................................................................................................................ 2 Guest Lecturers ...................................................................................................................................................... 2 Faculty Support Team ............................................................................................................................................ 3 What is the course about? ..................................................................................................................................... 4

Key Questions .................................................................................................................................................... 4 What does the course include? .............................................................................................................................. 4

Course Section Outline ...................................................................................................................................... 4 What will I learn in the course? .............................................................................................................................. 5 What should we expect from each other? ............................................................................................................. 6

What you can expect from edX .......................................................................................................................... 6 What we expect from you ................................................................................................................................. 6

Appendix A: Detailed Course Section Outline ...................................................................................................... 9 1. Winners and Losers -‐ Trends and Forces of Global Poverty, Resource Curse & Sweatshops ...................... 9 2. Supply Chains, Trade & Investment ........................................................................................................... 10 3. Good Jobs, Bad Jobs & Wage Inequality .................................................................................................... 11 4. Industrial Policy, Unfair Practices & Trade Deficits ................................................................................... 13 5. Inward FDI: Benefits, Costs & National Security Threats ........................................................................... 13 6. Outward FDI: Runaway Plants or Domestic Opportunities? ..................................................................... 14 7. Policies to Strengthen a Developed Country ............................................................................................. 14

Appendix B: Learning Checklist ........................................................................................................................... 16 Winners and Losers -‐ Trends and Forces of Global Poverty, Resource Curse & Sweatshops – Week 1 .......... 16 Supply Chains, Trade & Investment – Week 2 ................................................................................................. 16 Good jobs, Bad Jobs & Wage Inequality – Week 3 .......................................................................................... 16 Industrial Policy, Unfair Practices & Trade Deficits – Week 4 .......................................................................... 17 Inward FDI: Benefits, Costs & National Security Threats – Week 5 ................................................................. 17 Outward FDI: Runaway Plants or Domestic Opportunities? – Week 6 ............................................................ 17 Policies to Strengthen a Developed country – Week 7 .................................................................................... 17 Course Wrap-‐up: May 2, 2016 ......................................................................................................................... 18 Appendix C: Definitions of Terms Handout………………………………………………………………………………………………… 18


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GLOBALIZATION’S WINNERS AND LOSERS: CHALLENGES FOR DEVELOPED AND DEVELOPING COUNTRIES WHO ARE THE WINNERS AND LOSERS OF GLOBALIZATION? WHAT SHOULD BE DONE TO IMPROVE OUTCOMES FOR ALL?

LEAD FACULTY

Theodore H. Moran, Professor Dr. Moran holds the Marcus Wallenberg Chair in International Business and Finance at the School of Foreign Service, Georgetown University, where he teaches and conducts research at the intersection of international economics, business, foreign affairs, and public policy. Dr. Moran is founder of the Landegger Program in International Business Diplomacy, and serves as Director. He is also the Chair of the Global Business Major in the School of Foreign Service.

GUEST LECTURERS

▪ Joel Hellman

Dean of the Walsh School of Foreign Service at Georgetown University ▪ Adam Posen

President of the Peterson Institute for International Economics, the world's leading independent nonpartisan think tank on economics and globalization

▪ Jacob Funk Kirkegaard Senior fellow in the Peterson Institute for International Economics

▪ John Kline Professor of International Business Diplomacy in the School of Foreign Service, Georgetown University

▪ Lindsay Oldenski Associate Professor in the International Business Diplomacy Program at the School of Foreign Service, Georgetown University

▪ Scott Taylor Associate Professor and Director of the African Studies Program, Georgetown University

▪ Kate McNamara Associate Professor of Government and Foreign Service and Director of the Mortara Center for International Studies, Georgetown University

▪ Anna Maria Mayda Associate Professor of Economics at Georgetown University, with a joint appointment in the Department of Economics and the School of Foreign Service

▪ Rodney Ludema Associate Professor at Georgetown University, with a joint appointment in the Department of Economics and the School of Foreign Service

▪ Carl Dahlman Henry R. Luce Professor of International Relations and Information Technology, Georgetown University – position held until August 2013


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▪ William Plummer Vice President, External Affairs of Huawei North America

▪ Matthew E. Carnes Assistant Professor in the Department of Government, Georgetown University

▪ Joanna I. Lewis Assistant Professor of Science, Technology, and International Affairs (STIA), Georgetown University

▪ Robin A. King Adjunct Associate Professor of Landegger Program in International Business Diplomacy, Georgetown University

▪ Jean-‐François Seznec Adjunct Professor, School of Foreign Service, Georgetown University

FACULTY SUPPORT TEAM

▪ Rosaelena A. O’Neil, Course Manager

Deputy Director, Landegger Program in International Business Diplomacy, Walsh School of Foreign Service, Georgetown University

▪ Zhuqing Ding, Course Teaching Assistant

Master student in the Landegger Program in International Business Diplomacy, and Communication, Culture and Technology program, Georgetown University


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WHAT IS THE COURSE ABOUT?

This course will examine how the spread of trade, investment, and technology across borders affects firms, workers, and communities in developed and developing countries. It investigates who gains from globalization and who is hurt or disadvantaged by globalization. The course opens with difficult questions surrounding foreign direct investment in oil and minerals in the developing world, asking how to avoid corruption and dictatorship as part of the “Resource Curse”. It turns to sweatshop issues and the effort to build ever more sophisticated supply-‐chains in emerging markets. The course then shifts to the impact of globalization on developed countries, asking if developing country manufacturing exports come at the expense of workers in industrial states. The course concludes by allowing the participant to decide how to resolve the US budget deficit, and reform Social Security, so as to keep the US competitive in the world economy.

KEY QUESTIONS

▪ How can developing countries avoid the “resource curse”?

▪ What are some possible methods to deal with possible “sweatshop” abuses?

▪ How can emerging markets economies take advantage of supply chains from local firms into developed country markets?

▪ How might globalization contribute to wage inequality in developed countries?

▪ Should developed countries protect or promote manufacturing jobs?

▪ Is China becoming an economic “superpower”?

▪ Is the United States in economic decline?

WHAT DOES THE COURSE INCLUDE? Each section of the course listed in the Course Section Outline below begins with an Introduction sub-‐section and ends with a Conclusion & Looking Ahead sub-‐section. In between these sub-‐sections, the topics are organized sequentially as they are related to each other. These topics (listed in the Course Section Outline below) include lectures highlighting key concepts that are summarized under the Definition of Terms menu item, knowledge checks, polls, and discussion activities. In addition to the topic-‐based activities, you may choose to work with your classmates to co-‐author country guides on globalization as part of the Country Guides Activity.

• The Introduction includes a weekly guide that lists the key questions to be addressed in that course section. It also lists the readings, which may be links to external website or PDF files. The weekly guide is then followed by Professor Moran's introduction of the section's topic under study.

• The Country Guides Activity utilizes the course discussions that enable you to author and work collaboratively with your classmates on the development of country guides on globalization. The sub-‐section includes specific questions from Professor Moran that relate to the topics.

• The Conclusion & Looking Ahead provides you with a listing of the key learning outcomes related to that particular section of the course. It features Professor Moran's summary of key points and considerations in relation to the topics addressed.


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• The Course Wiki is a place for you to share information and resources with other students in the course. Resources that are appropriate for a particular unit should be added under "student-‐added resources" for that unit.

The overall course content outline follows. For a complete listing of the weeks including list of key questions and readings, see Appendix A.

COURSE SECTION OUTLINE 1. Winners and Losers -‐ Trends and Forces of Global Poverty, Resource Curse & Sweatshops

This section of the course explores issues related to global poverty, resource curse, sweatshops, and wages and in particular how the impact of these issues is felt throughout the world.

2. Supply Chains, Trade & Investment This section of the course addresses the spread of trade, technology, and investment through foreign direct investment of firms in developing countries.

3. Good Jobs, Bad Jobs & Wage Inequality This section of the course examines what classical and modern economic trade theory predicts about jobs and wage inequality compared to empirical evidence.

4. Industrial Policy, Unfair Practices & Trade Deficits This section of the course focuses on identifying the causes of trade deficits and surpluses and the impact of industrial policies. The cases of Japan and China are explored.

5. Inward FDI: Benefits, Costs & National Security Threats This section of the course analyzes some of the risks associated with globalization in relation to foreign-‐owned companies investing in developed countries, including the risk to national security.

6. Outward FDI: Runaway Plants or Domestic Opportunities? This section of the course analyzes some of the risks associated with globalization in relation to outward foreign direct investment, research and development, offshoring, and outsourcing.

7. Policies to Strengthen a Developed Country This section of the course analyzes and considers policies that developed countries could put into place to cushion the losses and spread the benefits of globalization.

8. Course Wrap-‐up Week This section of the course includes Professor Moran's final remarks and an end of course survey.

WHAT WILL I LEARN IN THE COURSE?

The course is designed to support you achieve the following learning goals. ◻ Understand concepts related to the resource curse and sweatshops, including external monitoring

organizations, EITI, sweatshop abuses, agency, labor standards, gender issues, minimum wage versus living wage, and earned income tax credit.

◻ Articulate the elements of classic and modern trade theories, including comparative advantage, absolute advantage, opportunity cost, and intra-‐industry trade with product differentiation.

◻ Understand supply chains and the globalization of manufacturing and assembly. ◻ Understand the concepts of protectionism, collective action and free riders, wage inequality and

skill-‐biased technological change, and the four trends in manufacturing in the developed world.


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◻ Determine the causes of trade deficits and surpluses and the impact of industrial policies. ◻ Explain the impact of inward Foreign Direct Investment and foreign acquisitions of firms on National

Security. ◻ Explain the dynamics of outsourcing and offshoring by multinationals and the relationship to jobs. ◻ Prescribe U.S. policies to remain competitive in a globalized world and ways to cushion the negative impact

of globalization. A Learning Checklist that organizes the learning goals above with the learning objectives for each of the course sections is available to you in Appendix B of this syllabus. Use this to help you determine what you are learning in the course. In addition, Appendix C of this syllabus includes the Definition of Terms Handout that highlights the key terms used throughout the course.

WHAT SHOULD WE EXPECT FROM EACH OTHER?

WHAT YOU CAN EXPECT FROM PROFESSOR MORAN AND THE COURSE TEAM

This is a self-‐paced course. We encourage you to explore the material in the course in the order designed. We look forward to your feedback in the end of course survey. If you experience a technical problem, please refer to the section below on what to expect from edX.

WHAT YOU CAN EXPECT FROM EDX

In the event of a technical problem, you should click the “Help” tab located on the left border of the screen (Figure 1). This “Help” tab opens an instruction box that directs you to student FAQs for general edX questions. You can also:

▪ Report a problem ▪ Make a suggestion ▪ Ask a question

You may post technical problems to the “Technical”thread of the discussion board. Finally, you may also contact [email protected] directly to report bugs.

WHAT WE EXPECT FROM YOU

Active students should spend around 3.5 -‐5 hours per course section to review assigned readings, watch weekly lectures, work through weekly knowledge checks and other activities, including the discussion threads and country guides on the discussion board.

Figure 1: Screenshot with Help tab


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In each course section we have included activities to support you in reaching the specified learning objectives for that section. The graded activities are categorized as knowledge checks; these are the activities that are counted toward achieving the verified certificate for the course. They include:

● Multiple choice questions ● Multiple answer questions ● Fill in the blank questions with drop down options ● Self-‐assessment open response questions

To receive a course verified certificate, you must complete/submit all graded assignments by May 3, 2016 at 9:00am EDT/13:00 UTC and receive a score of 75% or higher.

In addition to the graded knowledge check activities listed above, we have included in each section activities that enable you to explore the subject matter deeper. These include:

● Discussion questions ● Polling questions ● A collaborative country guides activity

All activities included in the course are designed to help you gauge your learning as a result of your interaction with the course content both from the video lectures and readings. Instructions on how to complete the activities are included within each course section.

NETIQUETTE GUIDELINES Please be respectful To promote the highest degree of education possible, we ask each student to respect the opinions and thoughts of other students and be courteous in the way that you choose to express yourself. Globalization topics are often controversial and promote debate. INFX-‐523 students should be respectful and considerate of all opinions. In order for us to have meaningful discussions, we must learn to genuinely try to understand what others are saying and be open-‐minded about others’ opinions. If you want to persuade someone to see things differently, it is much more effective to do so in a polite, non-‐threatening way rather than to do so antagonistically. Everyone has insights to offer based on his/her experiences, and we can all learn from each other. Civility is essential. Look before you write Prior to posting a question or comment on the discussion board, the Georgetown course team asks that you look to see if any of your classmates have the same question. Upvote questions that are similar to your own or that are also of interest to you, instead of starting a new thread. This will greatly help our Georgetown TAs best monitor the discussions and bring important questions to Professor Moran’s attention. Use the discussion board for course-‐related posts only While we encourage students to get to know each other, please use the discussion board for course content conversations only. Properly and promptly notify us of technical issues While we do not predict technical issues, they can and may happen. To make sure these receive prompt attention, post details about any technical issues directly on the “Technical” discussion thread or email [email protected] directly.


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ACADEMIC INTEGRITY Observe edX and GeorgetownX’s honor policies While collaboration and conversation will certainly contribute to your learning in the course, we ask students to refrain from collaborating with or consulting one another on any graded material for the course. Violations of the honor policy undermine the purpose of education and the academic integrity of the course. We expect that all work submitted will be a reflection of one’s own original work and thoughts. GeorgetownX faculty and staff expect all members of the community to strive for excellence in scholarship and character.


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APPENDIX A: DETAILED COURSE SECTION OUTLINE

1. WINNERS AND LOSERS – TRENDS AND FORCES OF GLOBAL POVERTY, RESOURCE CURSE & SWEATSHOPS

This section of the course explores issues related to the global poverty, resource curse, sweatshops, and wages and in particular how the impact of these issues is felt throughout the world.

KEY QUESTIONS: ◻ What are the pros and cons of globalization in developed and developing countries? ◻ What are the issues surrounding transparency and accountability within extractive industries? ◻ What can be done to prevent sweatshop abuses in low-‐wage, low-‐skill activities in emerging markets? ◻ What factors determine how much a worker earns? ◻ What effects do foreign-‐controlled supply chains have on low-‐skilled workers' employment and wages? ◻ How does globalization affect firms, workers, and communities in developed and developing countries?

REQUIRED READINGS (All Readings are available in the course itself as part of the Weekly Guide sub-‐section or under Readings in the main top menu of the course.)

◻ The entire web page introduction to Extractive Industry Transparency Initiative and watch the two introductory films (“What is the EITI?” Extractive Industry Transparency Initiative, 2013. http://eiti.org/eiti)

◻ Chapters 1 and 2 from Ted Moran's Foreign Direct Investment and Development. (Moran, Theodore H., Foreign Direct Investment and Development: Launching a Second Generation of Policy Research: Avoiding the Mistakes of the First, Reevaluating Policies for Developed and Developing Countries. Washington, D.C.: Peterson Institute for International Economics, 2011. Ch. 1, 2.)

¨ Chapters 2, 3, 4, and 6 from Ted Moran's Beyond Sweatshops. (Moran, Theodore H., Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries. Washington, D.C.: Brookings Institution, 2002).

¨ Read the labor standards section from the International Labour Organization website. ("Labour Standards." International Labour Organization, Web. http://www.ilo.org/global/standards/lang-‐-‐en/index.htm)

OPTIONAL READINGS

¨ Read about the Alta Gracia Project from the various resources below:

¨ On Boarding and Decent Work Conditions

¨ Alta Gracia: Work with Salario Digno

¨ Living Wage: Above and Beyond Anti-‐Sweatshop Codes

¨ Alta Gracia: Results Report

¨ Alta Gracia on the PBS Newshour


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¨ If you are interested in learning more about Professor Taylor's work on African political economy, you can

purchase his books:

¨ Globalization and the Cultures of Business in Africa: From Patrimonialsim to Profit

¨ Politics in Southern Africa: Transition and Transformation

¨ Business and the State in Southern Africa: The Politics of Economic Reform

2. SUPPLY CHAINS, TRADE & INVESTMENT This section of the course addresses the spread of trade, technology, and investment through foreign direct investment of firms in developing countries.

KEY QUESTIONS: ◻ Does the growth of manufacturing and assembly in emerging markets come at the expense of growth, welfare, and

jobs in developed countries?

◻ What is the difference between absolute and comparative advantage?

◻ What can classical theories of comparative advantage and modern theories of trade and investment tell us about whether globalization is a zero-‐sum phenomenon between developing and developed countries?

◻ How do developing countries participate in ever more sophisticated supply chains into developed country markets?

◻ How do developing countries create backward linkages from foreign investors to local firms, with more value added at home?

REQUIRED READINGS (All Readings are available in the course itself as part of the Weekly Guide sub-‐section or under Readings in the main top menu of the course.) ◻ Wikipedia entry on Comparative Advantage (WIKIPEDIA, s.v. "Comparative Advantage," last modified September 30,

2014, http://en.wikipedia.org/wiki/Comparative_Advantage ) ◻ Wikipedia entry on Absolute Advantage (WIKIPEDIA, s.v. "Absolute Advantage," last modified September 14, 2014,

http://en.wikipedia.org/wiki/Absolute_Advantage ) ◻ Wikipedia entry on Ricardian Model (WIKIPEDIA, s.v. "Ricardian Economics," last modified August 28, 2014,

http://en.wikipedia.org/wiki/Ricardian_economics ) ◻ Wikipedia entry on David Ricardo, section on "Trade theory and policy" (WIKIPEDIA, s.v. "David Ricardo," last

modified September 28, 2014, http://en.wikipedia.org/wiki/David_Ricardo ) ◻ Paul Krugman's article "Ricardo's Difficult Idea" (Krugman, Paul. "Ricardo's Difficult Idea." MASSACHUSETTS

INSTITUTE OF TECHNOLOGY) ◻ Wikipedia entry on "Heckscher-‐Ohlin Theorem" (WIKIPEDIA, s.v. "Hecksher-‐Ohlin Theorem," last modified

September 3, 2014, http://en.wikipedia.org/wiki/Heckscher%E2%80%93Ohlin_theorem ) ◻ Press Release on "The Nobel Prize in Economics 2008" (THE ROYAL SWEDISH ACADEMY OF SCIENCES,

Nobelprize.org, 13 October 2008, http://www.nobelprize.org/nobel_prizes/economics/laureates/2008/press.html ) ◻ Marc Melitz's article "International trade and heterogenous firms" (Melitz, Marc J., “International trade and

heterogeneous firms,” The New Palgrave Dictionary of Economics, 2: 2008; Steven N. Durlaf and Lawrence E. Blume, eds. http://www.dictionaryofeconomics.com/article?id=pde2008_I000302&q=melitz&topicid=&result_number=1 )

◻ Gene Grossman and Esteban Rossi-‐Hansberg's article "Trading Tasks: A Simple Theory" (Grossman, Gene and Esteban Rossi-‐Hansberg, "Trading Tasks: A Simple Theory of Offshoring,"AMERICAN ECONOMIC REVIEW 2008, 98:5, 1978-‐1997, http://www.princeton.edu/~erossi/TT.pdf .)


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◻ Review Chapters 1 and 3 from Gary Hufbauer and Kati Suominen's GLOBALIZATION AT RISK (Gary Hufbauer and Kati Suominen. 2009. GLOBALIZATION AT RISK: CHALLENGES TO FINANCE AND TRADE. Chapter 1. pp. 1-‐16, Chapter 3, pp. 49-‐71.)

◻ Review Chapters 1 and 2 from Ted Moran's Foreign Direct Investment and Development (Theodore H. Moran. 2011. Foreign Direct Investment and Development: Launching a Second Generation of Policy Research. Ch.1, 2.)

◻ Chapter 3 from J. Bradford Jensen's Global Trade in Services: Fears, Facts, and Offshoring (J. Bradford Jensen. 2012. Global Trade in Services: Fear, Facts, and Offshoring. Washington, DC: Peterson Institute for International Economics, ch. 3.)

◻ J. David Richardson and Karin Randal's Why Exports Matter: More! (J. David Richardson and Karin Randal, Why Exports Matter: More! (Institute for International Economics, 1996).)

◻ Scott Bradford, Paul Grieco, and Cary Clyde Hufbauer's article "The Payoff to America from Global Integration" (Scott C. Bradford, Paul L. E. Grieco, and Cary Clyde Hufbauer, “The Payoff to America from Global Integration” in C. Fred Bergsten and the Institute for International Economics, The United States and the World Economy: Foreign Economic Policy for the Next Decade (Institute for International Economics, 2005)

OPTIONAL READINGS

◻ Berdegué, J. A., Biénabe, E., & Peppelenbos, L. (2008).• Local Procurement From Small-‐Scale Farmers by Rural Supermarkets in South Africa, Reconnecting Markets : Innovative Global Practices in Connecting Small-‐scale Producers with Dynamic Food Markets, London: International Institute for Environment and Development (IIED).

◻ Berdegué, J. A., Biénabe, E., & Peppelenbos, L. (2008).• Integrating Small Farmers in Dynamic Supply Chains: MA’S Tropical Food Company, Sri Lanka, Reconnecting Markets : Innovative Global Practices in Connecting Small-‐scale Producers with Dynamic Food Markets, London: International Institute for Environment and Development (IIED).

◻ Danse. M & Vellema S Small-‐scale Farmer Access to International Agri-‐food Chains -‐ A BOP-‐Based Reflection on the Need for Socially Embedded Innovation in the Coffee and Flower Sector, Greener Management International. Summer2006, Issue 51, p39-‐52. 14p.

3. GOOD JOBS, BAD JOBS & WAGE INEQUALITY

This section of the course examines what classical and modern economic trade theory predicts about jobs and wage inequality compared to empirical evidence.

KEY QUESTIONS: ◻ How does the importance of manufacturing jobs compare to other kinds of jobs in developed economies? ◻ What do standard trade models predict about the impact of trade liberalization on wage inequality? ◻ What are the limitations to the models in relation to empirical evidence? ◻ What is skill-‐biased technological change? ◻ Does trade liberalization lead to an increase in total employment, a decrease in total employment, or neither? ◻ Why should the impact of trade and foreign direct investment liberalization be evaluated on the basis of the quality

of jobs (i.e., jobs with higher compensation) rather than on the number of jobs? ◻ What is the impact of trade expansion on the kinds of jobs in the economy? ◻ What is the impact of trade liberalization on wages?


◻ Ernest Hollings's article "Protectionism Happens to Be Congress's Job” (Hollings, Ernest. "Protectionism Happens to Be Congress's Job." The Washington Post. N.p., 21 Mar. 2004. Web. 3 October 2014. http://news.google.com/newspapers?nid=2482&dat=20040329&id=vJRIAAAAIBAJ&sjid=pAkNAAAAIBAJ&pg=4675,5887463 )


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◻ Wikipedia on "Collective Action" "Collective Action." Wikipedia. Wikimedia Foundation, last modified 28 September 2014, http://en.wikipedia.org/wiki/Collective_action#In_political_science_and_economics )

◻ Elizabeth Becker's article "In Glare of Politics, Bush Weighs Fate of Tariffs on Steel" (Becker, Elizabeth, "In Glare of Politics, Bush Weighs Fate of Tariffs on Steel." The New York Times. N.p., 20 Sept. 2003. Web. 3 October 2014. (http://www.nytimes.com/2003/09/20/business/in-‐glare-‐of-‐politics-‐bush-‐weighs-‐fate-‐of-‐tariffs-‐on-‐steel.html )

◻ Eric Fisher's article "Why Are We Losing Manufacturing Jobs" (Fisher, Eric, "Why Are We Losing Manufacturing Jobs." The Federal Reserve Board of Cleveland. N.p., July 2004. Web. 3 October 2014. http://www.clevelandfed.org/research/commentary/2004/July04.pdf .)

◻ Christina Romer's article "Do Manufacturers Need Special Treatment?" (Romer, Christina D. "Do Manufacturers Need Special Treatment?" The New York Times.05 Feb. 2012. Web. 3 October 2014. http://www.nytimes.com/2012/02/05/business/do-‐manufacturers-‐need-‐special-‐treatment-‐economic-‐view.html?_r=0 )

◻ Michael Spence and Sandile Hlatshwayo's article "The Evolving Structure of the American Economy and the Employment Challenge." (Spence, Michael, and Sandile Hlatshwayo. "The Evolving Structure of the American Economy and the Employment Challenge." Council on Foreign Relations.N.p., 2011. Web. 3 October 2014)

◻ Rich Motoko and David Maxwell's article "Jobs Go Begging As Gap Is Exposed In Worker Skills (Motoko Rich and David Maxwell. The New York Times.02 July 2010. Web. 3 October 2014. http://www.nytimes.com/2010/07/02/business/economy/02manufacturing.html?_r=0 )

◻ Eric Fisher's article "The Economic Report of the President 1996" ("The Economic Report of the President 1996." US Government Printing Office. N.p., 1996. Web. 3 October 2014. http://www.presidency.ucsb.edu/economic_reports/1996.pdf )

◻ Bob Herbert's article "The Economic Report of the President 1996" (Herbert, Bob. "In America; Nafta's Bubble Bursts." The New York Times. 11 Sept. 1995. Web. 3 October 2014. http://www.nytimes.com/1995/09/11/opinion/in-‐america-‐nafta-‐s-‐bubble-‐bursts.html )

◻ Article "North American Free Trade Agreement (NAFTA)" ("North American Free Trade Agreement (NAFTA)." Office of the United States Trade Representative. N.p., n.d. Web. 3 October 2014. http://www.ustr.gov/trade-‐agreements/free-‐trade-‐agreements/north-‐american-‐free-‐trade-‐agreement-‐nafta )

◻ Article "New ILO Report Says US Leads the World in Labour Productivity, Some Regions Are Catching Up, Most Lag behind." ("New ILO Report Says US Leads the World in Labour Productivity, Some Regions Are Catching Up, Most Lag behind." International Labor Organization. N.p., n.d. Web. 3 October 2014. http://www.ilo.org/global/about-‐the-‐ilo/media-‐centre/press-‐releases/WCMS_083976/lang-‐-‐en/index.htm )

◻ Ben Bernanke's article "The Level and Distribution of Economic Well-‐Being" (Bernanke, Ben S. "IThe Level and Distribution of Economic Well-‐Being." The Federal Reserve Board. N.p., 6 Feb. 2007. Web. 3 October 2014. http://www.federalreserve.gov/newsevents/speech/bernanke20070206a.htm )

◻ Duncan Moore's article "No Rust in Rochester" (Moore, Duncan T. "No Rust in Rochester." The New York Times. N.p., 2 Feb. 2012. Web. 3 October 2014. http://www.nytimes.com/2012/02/03/opinion/rochesters-‐survival-‐lessons.html)

◻ Conor Dougherty's article "Recipe for Middle-‐Class Jobs" (Dougherty, Conor. "Recipe for Middle-‐Class Jobs." The Wall Street Journal. N.p., 29 Nov. 2011. Web. 3 October 2014. http://online.wsj.com/article/SB10001424052970204753404577066470694261462.html)

◻ Lawrence Edwards and Robert Lawrence's Rising Tide (Edwards, Lawrence, and Robert Z. Lawrence. Rising Tide. “Is Trade Increasing Wage Inequality?” Washington, DC: Peterson Institute for International Economics, 2013. Print.)

◻ Krugman, Paul R.; Obstefeld, Maurice, International Economics: Theory and Policy, 7th Edition, 2006, pp. 69-‐70, 277-‐297. Reprinted by the permission of Pearson Eduction, Inc., Upper Saddle River, NJ.

◻ Robert Lawrence's Single World, Divided Nations? (Lawrence, Robert Z. Single World, Divided Nations?: International Trade and OECD Labor Markets. Washington, D.C.: Brookings Institution, 1996. Print. Excerpts)

◻ David Lightman, Margaret Talev, and William Douglas's article "Obama Slips on NAFTA Banana Peel as Clinton Hammers Him" (Lightman, David, Margaret Talev, and William Douglas. "Obama Slips on NAFTA Banana Peel as


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Clinton Hammers Him." McClatchy DC.N.p., 3 Mar. 2008. Web. 3 October 2014. http://www.mcclatchydc.com/2008/03/03/29283/obama-‐slips-‐on-‐nafta-‐banana-‐peel.html )

4. INDUSTRIAL POLICY, UNFAIR PRACTICES & TRADE DEFICITS

This section of the course focuses on identifying the causes of trade deficits and surpluses and the impact of industrial policies. The cases of Japan and China are explored.

KEY QUESTIONS: ◻ What is the impact of trade and foreign direct investment liberalization on the number of jobs in the economy?

◻ What are the causes of a balance of payments, deficit, or surplus?

◻ What are ways a country can use to correct a deficit?

◻ What happens to the trade deficit of a country when there is a decline in a country’s currency?

◻ What happens to the trade deficit of a country when there are unfair trade practices by one of the countries?

◻ What are the pros and cons of industrial policy, sophisticated industrial policy, and strategic trade policy?


◻ Gagnon, Joseph E. "Currency Manipulation: It's Not Just China." Peterson Institute of International Economics. N.p., 17 July 2012. Web. 3 October 2014. http://www.iie.com/publications/interviews/pp20120717gagnon.pdf.

◻ Reich, Robert. "Who Is Us?" Harvard Business Review. N.p., Jan. 1990. Web. 3 October 2014. http://hbr.org/1990/01/who-‐is-‐us/ar/1. (Article Preview)

◻ Moran, Theodore H. Foreign Manufacturing Multinationals and the Transformation of the Chinese Economy: New Measurements, New Perspectives. Peterson Institute for International Economics. Working Paper

◻ Krugman, Paul R., and Maurice Obstfeld. International Economics: Theory and Policy. Boston, MA: Addison-‐Wesley, 2006. Print. Ch. 12 “Industrial Policy in Advanced Countries.”

◻ Moran, Theodore H. "What Policies Should Developing Country Governments Adopt toward Outward FDI? : Lessons from the Experience of Developed Countries." The Rise of Transnational Corporations from Emerging Markets: Threat or Opportunity? Ed. Karl P. Sauvant. Cheltenham: Edward Elgar, 2009. N. pag. Print

OPTIONAL READINGS ◻ Dahlman, Carl. The World Under Pressure. Palo Alto: STANFORD UP, 2012. Print. Ch. 3, 4, 5 only ◻ Lewis, Joanna I. Green Innovation in China: China’s Wind Power Industry and the Global Transition to a Low-‐Carbon

Economy. New York: Columbia University Press, 2013.

5. INWARD FDI: BENEFITS, COSTS & NATIONAL SECURITY THREATS

This section of the course analyzes some of the risks associated with globalization in relation to foreign-‐owned companies investing in developed countries, including the risk to national security.

KEY QUESTION: ◻ Within the context of developed countries, what is the impact of inward foreign direct investment? ◻ What is the impact of foreign acquisitions of domestic firms on national security?


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◻ Moran, Theodore H. and Lindsay Oldenski. Foreign Direct Investment in the United States: Benefits, Suspicions, and Risks with Special Attention to FDI from China. Policy Analyses in International Economics 100. Washington, DC: Peterson Institute for International Economics, forthcoming. Print.

6. OUTWARD FDI: RUNAWAY PLANTS OR DOMESTIC OPPORTUNITIES?

This section of the course analyzes some of the risks associated with globalization in relation to outward foreign direct investment, research and development, offshoring, and outsourcing.

KEY QUESTIONS: ◻ Within the context of developed countries, what is the impact of outward foreign direct investment? What about the

globalization of research and development? ◻ What is offshoring? What is outsourcing?


◻ Hufbauer, Gary, Theodore Moran, and Lindsay Oldenski. Outward FDI, US Exports, US Jobs, and US R&D: Implications for US Policy. Washington, DC: Peterson Institute for International Economics, 2013. Print.

◻ Jensen, J. Bradford. Global Trade in Services: Fear, Facts, and Offshoring. Washington, DC: Peterson Institute for International Economics, 2012. Print. Conclusion.

7. POLICIES TO STRENGTHEN A DEVELOPED COUNTRY

This section of the course analyzes and considers policies that developed countries could put into place to cushion the losses and spread the benefits of globalization.

KEY QUESTIONS:

◻ What policies do you recommend for adoption for the United States to benefit fully from the globalization of trade, investment, and technology, and dampen the costs, cushion, compensate, and retrain the losers?

◻ What are some policies that could make a country more competitive?


◻ Katz, Lawrence F. "How to Bring the Jobs Back: Invest in Workers." The New York Times. 07 Sept. 2011. Web. 3 October 2014. http://www.nytimes.com/2011/09/07/opinion/help-‐displaced-‐workers.html

◻ Rosen, Howard F. "Trade Adjustment Assistance Works!" Peterson Institute of International Economics., 19 Sept. 2011. Web. 3 October 2014. http://www.piie.com/blogs/realtime/?p=2376


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◻ Deparle, Jason. "Harder for Americans to Rise From Economy's Lower Rung." The New York Times. 05 Jan. 2012. Web. 3 October 2014. http://www.nytimes.com/2012/01/05/us/harder-‐for-‐americans-‐to-‐rise-‐from-‐lower-‐rungs.html?pagewanted=all

◻ Brooks, David. "The Wrong Inequality." The New York Times. 01 Nov. 2011. Web. 3 October 2014. http://www.nytimes.com/2011/11/01/opinion/brooks-‐the-‐wrong-‐inequality.html

◻ Diamond, Peter, and Emmanuel Saez. "The Case for a Progressive Tax: From Basic Research to Policy Recommendations." Journal of Economic Perspectives, 25(4): 165-‐90. Available online. http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.25.4.165

◻ Altman, Daniel. "To Reduce Inequality, Tax Wealth, Not Income." The New York Times. 19 Nov. 2012. Web. 3 October 2014. http://www.nytimes.com/2012/11/19/opinion/to-‐reduce-‐inequality-‐tax-‐wealth-‐not-‐income.html

◻ Huang, Chye-‐Ching. "Impact of Estate Tax on Small Businesses and Farms Is Minimal Almost No Small Business and Farm Estates Owe the Tax; Those That Do Owe Only Modest Amounts." Center on Budget and Policy Priorities. 23 Feb. 2009. Web. 3 October 2014. http://www.cbpp.org/cms/index.cfm?fa=view&id=2663

◻ Romer, Christina. "Cutting the Deficit Compassionately." The New York Times. 02 Sept. 2012. Web.3 October 2014. http://www.nytimes.com/2012/09/09/business/cutting-‐the-‐deficit-‐compassionately-‐economic-‐view.html

◻ "Ensuring That Student Loans Are Affordable." The White House. Available online. http://www.whitehouse.gov/issues/education/higher-‐education/ensuring-‐that-‐student-‐loans-‐are-‐affordable

◻ Lynch, Lisa. "What Can We Do? Remedies for Reducing Inequality." Growing Apart: The Causes and Consequences of Global Wage Inequality. by Alfred Fishlow. New York: Council on Foreign Relations, 1999. Ch. 12.

◻ Richardson, J. David. "Uneven Gains and Unbalanced Burdens? Three Decades of American Globalization." The United States and the World Economy: Foreign Economy Policy for the Next Decade. By C. Fred Bergsten. Washington, DC: Institute of International Economics, 2005.

◻ Kletzer, Lori G., Howard Rosen. “Easing the Adjustment Burden on US workers" The United States and the World Economy: Foreign Economy Policy for the Next Decade. By C. Fred Bergsten. Washington, DC: Institute of International Economics, 2005.


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APPENDIX B: LEARNING CHECKLIST

This guide lists the learning goals and objectives for each section of the GeorgetownX Globalization’s Winners and Losers: Challenges for Developed and Developing Countries course (January 25 – May 2, 2016). Use this guide as your own learning checklist while engaging with the course.

WINNERS AND LOSERS – TRENDS AND FORCES OF GLOBAL POVERTY, RESOURCE CURSE & SWEATSHOP – WEEK 1 ◻ Understand concepts related to the resource curse and sweatshops, including external monitoring

organizations, EITI, sweatshop abuses, agency, labor standards, gender issues, minimum wage versus living wage, and earned income tax credit.

◻ Identify the pros and cons of globalization in developed and developing countries ◻ Recognize how globalization affects firms, workers, and communities in developed and developing countries ◻ Describe the issues in relation to transparency and accountability within the scope of the extractive industry ◻ Identify what can be done to prevent “sweatshop abuses” from foreign investment and trade in low-‐wage, low-‐

skill activities in emerging markets ◻ Explain what effects foreign-‐controlled supply chains have on low skilled workers’ employment and wages ◻ Identify the factors that determine how much a worker earns

SUPPLY CHAINS, TRADE & INVESTMENT – WEEK 2 ◻ Articulate the elements of classic and modern trade theories, including comparative advantage, absolute

advantage, opportunity cost, and intra-‐industry trade with product differentiation.

◻ Differentiate between absolute advantage and comparative advantage in the contemporary era

◻ Determine what traditional theories of comparative advantage and newer theories of trade-‐and-‐investment tell us about whether globalization is a zero-‐sum phenomenon between developing and developed countries

◻ Understand supply chains and the globalization of manufacturing and assembly.

◻ Describe the ratio of benefits to costs of globalization

◻ Describe the role of Investment Promotion Agencies

◻ Describe the creation of supply chains and the globalization of manufacturing and assembly through Foreign Direct Investment (FDI)

◻ Explain how developing countries participate in ever more sophisticated supply chains into developed country markets and how developing countries create backward linkages from foreign investors to local firms, with more value-‐added at home

◻ Explain the impact of the supply chains and the globalization of manufacturing and assembly through Foreign Direct Investment (FDI) has on developed and developing countries

GOOD JOBS, BAD JOBS & WAGE INEQUALITY – WEEK 3 ◻ Understand the concepts of protectionism, collective action and free riders, wage inequality and

skill-‐biased technological change, and the four trends in manufacturing in the developed world.

◻ Define protectionism, collective action, free riders, and skill-‐biased technological change


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◻ Identify the four trends in manufacturing and the importance of manufacturing jobs in the developed world ◻ Determine whether the growth of manufacturing and assembly in emerging markets comes at the expense of

growth, welfare, and jobs in developed countries

◻ Explain whether trade liberalization leads to an increase in total employment, a decrease in total employment, or neither

◻ Describe what standard trade models predict about the impact of trade liberalization on wage inequality

◻ Describe the impact of trade and foreign direct investment liberalization on the number of jobs in the economy

◻ Explain the impact of trade expansion on the kinds of jobs in the economy, and associated wages

◻ Recognize the limitations of models in relation to empirical evidence

◻ Explain why the impact of trade and foreign investment liberalization should be evaluated on the basis of the quality of jobs (i.e., jobs with higher compensation) rather than on the number of jobs

INDUSTRIAL POLICY, UNFAIR PRACTICES & TRADE DEFICITS – WEEK 4

◻ Determine the causes of trade deficits and surpluses and the impact of industrial policies.

◻ Identify the causes of balance of payments, trade deficits, or trade surpluses

◻ Identify ways a country can use to correct a deficit

◻ Evaluate the implications of a trade deficit

◻ Examine the role of decline in a country’s currency and unfair trade practices in relation to trade deficit

◻ Explain the pros and cons of industrial policy, sophisticated industrial policy, and strategic trade policy

INWARD FDI: BENEFITS, COSTS & NATIONAL SECURITY THREATS – WEEK 5

◻ Explain the impact of inward Foreign Direct Investment and foreign acquisitions of firms on National Security.

◻ Within the context of developed countries, what is the impact of inward foreign direct investment? ◻ What is the impact of foreign acquisitions of domestic firms on national security?

OUTWARD FDI: RUNAWAY PLANTS OR DOMESTIC OPPORTUNITIES? – WEEK 6

◻ Explain the dynamics of outsourcing and offshoring by multinationals and the relationship to jobs.

◻ Within the context of developed countries, what is the impact of outward foreign direct investment? What about the globalization of research and development?

◻ What is offshoring? What is outsourcing?

POLICIES TO STRENGTHEN A DEVELOPED COUNTRY – WEEK 7

◻ Prescribe U.S. policies to remain competitive in a globalized world and ways to cushion the negative impact of globalization.

◻ What policies do you recommend for adoption for the United States to benefit fully from the globalization of trade, investment, and technology, and dampen the costs, cushion, compensate, and retrain the losers?


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◻ What are some policies that could make a country more competitive?

COURSE WRAP-‐UP: MAY 2

If you are planning to get a Verified Certificate, all graded activities have to be submitted by May 2 at 9:00am EDT/13:00 UTC.

APPENDIX C: DEFINITION OF TERMS HANDOUT

Key Term Definition Index

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service. (In absolute terms)

Week 2

Adam Smith An 18th-‐century philosopher and free-‐market economist famous for his ideas about the efficiency of the division of labor and the societal benefits of individuals' pursuit of their own self-‐interest. Smith proposed the idea of the invisible hand, or the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-‐interest.

Week 2

Adjustment Assistance

A federal program that would assist those affected by any type of US job dislocation, not just trade related. The assistance program would include extended unemployment insurance contingent on enrollment in a qualified vocational training course and help with formal job searches. These programs would, however, be more expensive.

Week 7

Advanced Technology Products List

About 500 of some 22,000 commodity classification codes used in reporting U.S. merchandise trade are identified as "advanced technology" codes and they meet the following criteria: The code contains products whose technology is from a recognized high technology field (e.g.), biotechnology); these products represent leading edge technology in that field; and such products constitute a significant part of all items covered in the selected classification code.

Week 4

Agency An ethical term meaning a person can have some freedom and control over his or her own life. It is the capacity of an agent to act in a world.

Week 1

Alta Gracia Alta Gracia is a fair trade apparel company located in Alta Gracia, Dominican Republic. The former building that Alta Gracia was a sweatshop. Now they mainly support college apparel in colleges in the United States.

Week 1


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Balance of Payments (BOP)

A record of all transactions made between one particular country and all other countries during a specified period of time. BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports. A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.

Week 4

Cap-‐and-‐Trade System

A market-‐based approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. The government sets a limit or cap on the amount of a pollutant that may be emitted, which is allocated or sold to firms. The transfer of permits is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. Thus, in theory, those who can reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest cost to society.

Week 7

Carbon Tax A tax levied on the carbon content of fuels. They offer a potentially cost-‐effective means of reducing greenhouse gas emissions.

Week 7

Collective Action Defined as any action aiming to improve the group’s conditions (such as status or power), which is enacted by a representative of the group.

Week 3

Collective Action Problem

Describes the situation in which multiple individuals would all benefit from a certain action and no one can be excluded from the benefits of free trade; creates incentives to “free ride.”

Week 3

Comparative Advantage

The ability of a firm, individual, or country to produce goods and/or services at a lower opportunity cost than other firms or individuals.

Week 2

Currency Manipulation

The intervention of the natural foreign exchange rate of currencies to influence the value of the domestic currency. Currency manipulation can be used to increase profitability of one country over another.

Week 4

David Ricardo A classical economist known for his Iron Law of Wages, labor theory of value, theory of comparative advantage and theory of rents. David Ricardo and several other economists also simultaneously and independently discovered the law of diminishing marginal returns.

Week 2

Dutch Disease When an increase in the exploitation of natural resources results to a decline in another sector. This occurs when the increase in revenues from natural resources will make the nation’s currency stronger compared to that of other nations, resulting in the nation’s exports more expensive when compared to those of other countries. An increase in the export of natural resources makes the other sectors less competitive.

Week 1

Earned Income Tax Credit (EITC)

A refundable tax credit for low and medium income families and individuals. The EITC is one of the largest anti-‐poverty tools in America. The Earned Income Tax Credit can be a negative income tax, and in these cases results in a positive cash flow for the household whose primary income worker does not earn enough money to pay income tax. It is a way to bolster the income of low skilled workers without the detrimental

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effects of a high minimum wage.

Economic Superpower

A nation with a dominant market position in the international system, which has influence over international events, interests, and political power.

Week 4

Economies of Scale

The cost advantages that occurs with an increase in size. The mechanism behind this theory is that the cost per unit of output generally decreases with increasing scale as fixed costs are spread out over greater units of output.

Week 2

Empirical Evidence

The evidence acquired by means of observation or experimentation. Empirical evidence shows what "happens" in certain situations or experimentations.

Week 2, 3, 4, 5, 6

Estate Tax A tax imposed on the transfer of the “taxable estate” of a deceased person, whether such property is transferred via a will or the payment of life insurance benefits of financial account sums to beneficiaries.

Week 7

Exports A good or service sent out from one country to another. The higher the value of exports exiting a country, compared to the value of imports, the more positive that country's balance of trade becomes.

Week 1, 2, 3, 4

Externality A consequence of economic activity that is experienced by unrelated third parties. An externality can be either positive or negative.

Week 3

Extractive Industry Transparency Initiative (EITI)

The EITI is a non-‐government organization that works to increase transparency and accountability in the extractive sector. The EITI reconciles payments disclosed by companies from the oil and mining industries and government disclosure receipts of payments. The EITI makes a process overseen by a multi-‐stakeholder group of governments, companies, and civil society.

Week 1

Factor Content Analysis

An analysis of the primary factors used in the production of a good or service, or a vector of quantities of goods and services. In this class, a simulation to test the Hecksher-‐Ohlin Model, in which the most skilled labor, is exported and the least skilled is imported. The results of this kind of testing indicated that the results of trade liberalization are not large enough to account for the kind of disparity in the US.

Week 3

Factors of Production

An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital, and entrepreneurship.

Week 2, 3


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Flat National Sales Tax

A tax system levied upon consumers at the point of sale for goods and services. The national sales tax would function like a state sales tax; the tax would be an extra cost added to the retail price of products. This is a regressive method, meaning it would most hurt those making the least amount of money, because the tax would take a larger proportion of the person’s income.

Week 7

Foreign Direct Investment (FDI)

An investment made by a company or entity based in one country, into a company or entity based in another country. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies. Closed off economies with limited skill labor will inhibit investment in that country.

Week 1, 2, 3

Free Riders Someone who benefits from a resource, good, or service without paying for any of the cost of the benefit.

Week 3

Gasoline Tax An excise tax imposed on the sale of fuel. The tax is a source of general revenue, and an eco-‐tax, to promote ecological sustainability.

Week 7

General Equilibrium Analysis

General equilibrium theory studies supply and demand fundamentals in an economy with multiple markets, with the objective of proving that all prices are at equilibrium. The theory analyzes the mechanism by which the choices of economic agents are coordinated across all markets. General equilibrium theory is distinguished from partial equilibrium theory by the fact that it attempts to look at several markets simultaneously rather than a single market in isolation.

Week 3

Globalization The investment of funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. Globalization has had the effect of markedly increasing not only international trade, but also cultural exchange.

Week 1, 2, 3, 4, 5, 6, 7

Government Consumption

A measure of the amount of goods or services purchased by the government.

Week 4

Gross Domestic Product (GDP)

The market value of all officially recognized final goods and services produced within a country in a given period of time. The measurement of GDP per capita (GDP/population) is often used as a measure of a country’s standard of living.

Week 4


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Heckscher-‐Ohlin Model

A general equilibrium mathematical model of international trade. The H-‐O model is built on David Ricardo’s theory of comparative advantage by predicting patterns of commerce and production based on the relative factor endowments of a trading region. The model states that countries will export products that use their abundant and cheap factors of production and import products using the countries’ scarce factors.

Week 3

Hubbard, Glenn Glenn Hubbard is an American economist and professor at Columbia University. He previously served on the Council of Economic Advisors for the George W. Bush administration.

Week 3, 7

Imports A good or service brought into one country from another. Along with exports, imports form the backbone of international trade. The higher the value of imports entering a country, compared to the value of exports, the more negative that country's balance of trade becomes.

Week 1, 2, 3, 4, 5, 6, 7

Income Tax A tax on individual earnings that is paid to the national government. Week 4, 7

Industrial Policy Government policy to influence, which industries expand and, perhaps implicitly, which contract, via subsidies, tax breaks, and other aids for favored industries. The purpose, aside from political favor, may be to foster competitive advantage where there are beneficial externalities and/or scale economies.

Week 4

Institutional Reform

As the name suggests, institutional reforms are type of business reform that create better business environments. These include facilitating non-‐corrupt judicial systems, or enforcing contracts.

Week 2

Inter-‐Industry Trade (North-‐South Trade)

Refers to the exchange of different products belonging to different industries. This is used in international when countries specialize in one industry or good over others. For example, more developed countries can computer parts whereas less-‐developed countries can export garments and footwear.

Week 2

International Labor Organization (ILO)

A United Nations entity that is concerned with labor standards and decent work for all.

Week 1

Intra-‐Industry Trade (North-‐North Trade)

Refers to the exchange of similar products belonging to the same industry. This is used in international trade when the same type of good is traded between countries. For example, more developed countries can exchange luxury cars or electronics.

Week 2

Investment Promotion Agency (IPA)

Most often, a government agency (or occasionally a non-‐profit organization functioning similar to a chamber of commerce) whose mission is to attract investment to a country, state, region or city. The agency does this by introducing investors to local real estate developers and other commercial service companies, providing useful statistical information such as average wages and by managing any investment incentives that the city, state or country may offer to companies which

Week 2


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invest there.

Krugman Model Accounts for the 20th century tendency for countries to trade with similar countries, which is difficult to explain with the theory of comparative advantage. The Krugman Model is based upon two key assumptions: that consumers prefer a diverse choice of brands, and that production favors economies of scale. For example, consumers' preference for diversity explains the survival of different versions of cars like Volvo and BMW. However, because of economies of scale, it is not profitable to spread the production of Volvos all over the world; instead, it is concentrated in a few factories and therefore in a few countries (or maybe just one). This logic explains how each country may specialize in producing a few brands of any given type of product, instead of specializing in different types of products.

Week 2

Krugman, Paul Paul Krugman is an American economist. He teaches at Princeton University and writes for The New York Times. His contributions to economics include New Trade Theory and New Economic Geography. In 2008, Krugman won the Nobel Prize in Economics.

Week 2, 3

Labor Unions A collective that represents workers in many industries that work to collectively bargain over wages, benefits, and working conditions.

Week 1

Macro Reform In economics, it described economic or business reform that is linked to the monetary policy of the country. These include lowering inflation or adjusting the exchange rates.

Week 2

Magnified Effect (Stolper-‐Samuelson)

An effect that comes about from the relationship between wages of high skilled and low skilled workers with the prices of what they are producing. The Stolper-‐Samuelson effect predicts that, a high skilled worker will have higher wages and will be able to purchase a higher quantity of low skilled goods, and therefore, a greater purchasing power relative to the lower skilled worker. On the other hand, a lower skilled worker’s wages will go down, while the price of high skilled goods will go up; they won’t be able to afford these products, and their relative purchasing power will go down. The magnified effect is that not only do high skilled workers earn higher wages, but those wages also purchase more low skilled goods (whose prices have gone down); the opposite holds true for low skilled workers. Ultimately, high skilled workers gain over time and low skilled workers lose over time.

Week 3


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Medicare A national social insurance program that guarantees access to health insurance for Americans aged 65 and older and younger people with disabilities. As a social insurance program, Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from for-‐profit private insurers, which manage their risk portfolio by adjusting their pricing according to, perceived risk.

Week 7

Micro Reform Refers to economic business reforms that affect firms directly. For example means reforms related to the ease of opening or closing a business or factory.

Week 2

Minimum Wage The minimum amount of compensation an employee must receive for performing labor. Minimum wages are typically established by contract or legislation by the government. As such, it is illegal to pay an employee less than the minimum wage.

Week 1

Multinational Corporations (MNCs)

A corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-‐ordinate global management. Very large multinationals have budgets that exceed those of many small countries.

Week 1, 2, 3, 4, 5, 6, 7

Non-‐Government Organization (NGO)

A term used to define groups that are neither government or tradition for-‐profit businesses. NGOs typically pursue wider social and/or political aims.

Week 1

Offshoring When a company moves (some of a company's processes or services) overseas, esp. in order to take advantage of lower costs, through an affiliate of the same company.

Week 6, 7

On-‐the-‐Job Training

Training that takes place at the place of work as an employee is doing the actual job.

Week 3

One-‐More Stop Shop

A one more stop shop means that the IPA is working as an intermediary between the government agencies in country and the potential investor that are necessary for information and permits.

Week 2

One-‐Stop Shop When the IPA will be the sole interface between host country and investor to gather permits and legal documents

Week 2

Opportunity Cost The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.

Week 2

Outsourcing When a company moves (some of a company’s processes or services) overseas, esp. in order to take advantage of lower costs, through another company.

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Partial Equilibrium Analysis

In economics, analysis that treats one particular sector of the economy as operating in isolation from the other sectors of the economy. In our class it is used to examine the number of jobs lost or created.

Week 3

Petroleum Industry Bill (PIB)

An act in the Nigerian government to establish the legal and regulatory framework for Nigerian petroleum industries in an effort to increase transparency and accountability.

Week 1

Price Series A test for a given model in which a selection of goods and services is priced over time. In our class this was used to test the Stolper-‐Samuelson theorem and its effects.

Week 3

Private Consumption

Used in the GDP equation, private consumption is a measure of the amount of goods and services by individuals for private use.

Week 4

Private Domestic Investment

A measure in the GDP equation that measures the economic investment of nations. This measurement looks as the future productive capacity of the economy.

Week 4

Product Differentiation

In economics, it is process in which a firm distinguishes a product or service from those of its competitors to make it more attractive on the market.

Week 2, 3

Protectionism Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs; quotas, subsidies or tax cuts to local businesses and direct state intervention.

Week 3

Public Good A good that is non-‐excludable to individuals. When people cannot be excluded from goods. Examples include: fresh air, sidewalks, lighthouses, and street lighting.

Week 3

Rent-‐Seeking Behavior

A method of manipulation when there is an attempt to gain economic rent (a portion of the income paid for a factor of production in addition to what is needed to keep it employed and in current use). This is typically used to hinder activities that would otherwise be used to create new wealth.

Research and Development (R&D)

Investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Research and development is one of the means by which business can experience future growth by developing new products or processes to improve and expand their operations.

Week 6


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Resource Curse A paradoxical situation in which countries with an abundance of non-‐renewable resources experience stagnant growth or even economic contraction. As a result, the nation becomes overly dependent on the price of commodities and overall gross domestic product becomes extremely volatile. Non-‐transparent agreements between governments that lack experience in the extractive industries and multinationals lead to corruption lack of regulation, and environmental damage. In addition, the failure to establish proper resource rights and an income distribution framework can result in the misappropriation of project revenues. The resource curse is most often witnessed in emerging markets following a major natural resource discovery.

Week 1

Romer, Christina Christina Romer served as the former Chair of the Council on Economic Advisors for the Obama Administration. She resigned from that role on September 3, 2010.

Week 3, 7

Skill-‐Biased Technological Change

As technology becomes more pervasive at all levels of society, workers have to update their skills to become more technologically savvy. For example, cars today are equipped with high tech microprocessors, which an autoworker would need to understand. Both high skilled and low skilled workers need to update these skills. 80% of the income disparity comes from the gap between those who can master these new skills and those who can’t, because they don’t have the opportunity to do so.

Week 3, 7

Social Security A social welfare and insurance program, started in 1935 that pays benefits to a retired worker. Throughout a worker’s career, the Social Security Administration keeps track of his or her earnings. The amount of the monthly benefit to which the worker is entitled depends upon that earnings record and upon the age at which the retiree chooses to begin receiving benefits.

Week 7

Stolper-‐Samuelson Theorem

Based on the Heckscher-‐Ohlin trade theory, the Stolper-‐Samuelson theorem describes a relationship between relative prices of output goods and relative factor rewards. The Stolper-‐Samuelson Theorem states that a rise in the relative price of a good will lead to a rise in the return to that factor which is used more intensively in the production of the good. Conversely, this will result to a fall in the return to the other scarce factor. The Stolper-‐Samuelson Theorem splits a country into clear winners and losers.

Week 3

Sunrise Industries A colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous start-‐ups and an abundance of venture capital funding. Sunrise industries generally have plenty of "buzz" surrounding them as public awareness about the sector increases and investors get attracted to its long-‐term growth prospects.

Week 4


JANUARY 25, 2016 – MAY 2, 2016

27 of 29

Sunset Industries A colloquial term for a sector or business that is decline, one that has passed its peak or boom periods. For example, analogue recording technologies for audio or video have been supplanted by digital equivalents; although analogue equipment is still offered, sales have declined dramatically and are not expected to recover.

Week 4

Supply and Demand

In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium for price and quantity.

Week 1, 2

Supply Chains The network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer. Supply chain management is a crucial process for many companies, and many companies strive to have the most optimized supply chain because it usually translates to lower costs for the company.

Week 2

Sweatshops A working environment that is considered to be unacceptably difficult or dangerous. These types of conditions could include long working hours, low pay, and potential violation of labor laws.

Week 1

Trade Adjustment Assistance

A federal program of the US government to act as a way to reduce the damaging impact of imports felt by certain sectors of the U.S. economy. The current structure features four components of Trade Adjustment Assistance: for Workers, Firms, Farmers, and Communities.

Week 7

Trade Deficit An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.

Week 4

Trade Surplus An economic measure of a positive balance of trade, where a country's exports exceeds its imports. A trade surplus represents a net inflow of domestic currency from foreign markets, and is the opposite of a trade deficit, which would represent a net outflow.

Week 4

Trans-‐Pacific Partnership

The Trans-‐Pacific Partnership is a proposed free trade agreement under negotiation by Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam. Japan has expressed its desire to become a negotiating partner. It is intended to be a high-‐standard agreement specifically aimed at emerging trade issues in the 21st century. The secrecy of the negotiations has become a point of controversy.

Week 3

Unfair Trade Practices

Any fraudulent, deceiving, or dishonest practice in international trade that is prohibited by law or regulation.

Week 4


JANUARY 25, 2016 – MAY 2, 2016

28 of 29

Value Added Tax A form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. For that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture of distribution. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously pad on the inputs.

Week 7

Value-‐Added The amount by which the value of an article is increased at each stage of its production, exclusive of initial costs.

Week 4

Wage Insurance An insurance program to incentivize people to find new jobs, after losing a job. A wage insurance program accounts for a fraction of the difference in wage between the old job and the new one. This program incentivizes people to go out and find new jobs even if they might pay a little less. There would be limits and time constraints on this insurance program, but it can combat the stasis in taking a new job after getting laid off.

Week 7

Wealth Tax A tax based on the accumulated stock of purchasing power, in contrast to income tax, which is a tax on the flow of assets.

Week 7

Workers' Training Fund Tax

A tax used to fund worker training programs. To fund the program employers would be required to pay into a common fund or receive a tax credit for training their own workers.

Week 3

Youth Unemployment

A lack of job opportunities for younger workers (typically between the ages of 15 and 24). Without these jobs, there is very little education and on-‐the job training for new additions to the workforce.

Week 1

Documents

INFX523-03x course syllabus - Welcome | edX StudioGeorgetownX+NFX523-0… · · 2016-01-23Course’Syllabus ’ GeorgetownX ’ ... Course’Wiki ’is!a!place!for ... organizations,!EITI,!sweatshop!abuses,!agency,!labor!standards,!gender!issues,!minimum!wage!versus!living!