World Economy I

OBJECTIVES:

Knowledge: the scope, evolution and essential features of world economy; the relevant elements of major economic theories; major aggregates of world economy (production; trade, capital flows, non-financial resources, labour); contemporary globalization; sustained development issues; economic and systemic transformation; interaction between world economy and international politics;

Skills: developing the ability to analyse international economic developments and policies and to relate them intuitively to other aspects of the functioning of the state, its institutions and individual economic entities and operators

Competences: improvement of students’ ability to understand and evaluate world economic environment and its practical performance from the perspective of the state and individual enterprise and to propose and explain the practical actions and measures which may sustain and promote national and corporate economic objectives.

DESCRIPTION OF THE COURSE

Lecture 1: Introduction and recollection

A. Housekeeping issues. Informal orientation test; presentation and discussion of the syllabus.

B. Substantive part: Introduction to the lecture cycle: recollection of selected principal economic concepts; highlights of the evolution of the world economy; the principal drivers of change; basic developments, notions and related theories. The impact of external economic relations on national welfare. Informal test for the purpose of verification of the general knowledge of International Economics. [2.5 hrs]

Lecture 2: Recollection

Recollection of essential elements of International Economics, including: the classical school, contemporary theories, basic aspects of trading rules, financial markets, capital flows, exchange rate management, etc. Issues to be discussed will reflect the evaluation of students’ knowledge as assessed on the basis of the informal orientation test conducted in the preceding session.

Lecture 3: Contemporary globalization and production issues

Historical evolution of the world economy; main features of globalization; globalization highlights and their links with specific political, social, scientific and economic developments; globalization of production; the impact of globalization on the state, society and public policy issues; new global determinants of international trade and investment and their welfare effects; transnational corporations as globalization carriers.[2.5 hrs]

Lecture 4: Sustainable development and systemic transformation

A review of sustainable economic development doctrines and practice after World War II; emerging economies in the present globalization process; key issues of contemporary approach to economic convergence and growth; facts and figures on global differentiation of economic potentials and development patterns; some projections of future developments. Transformation from state-controlled to market-based economy; transformation models. [2.5 hrs]

Lecture 5: World trade and the multilateral trading system

Quantitative analysis; global determinants of trade; major theories; gains from trade; the intensity and underlying drivers of bilateral trade as illustrated by gravity models;. potential gains and losses from trade; terms of trade and their interpretation; the fundamentals of the GATT/WTO multilateral trading system; rules and their enforcement; national and multilateral trade policy framework; instruments of trade policy; major partners and their trade policy criteria and objectives; world prices and their change.[2.5 hrs]

Lecture 6: World financial markets, monetary systems and exchange rate

Highlights of the history of monetary systems and their performance. Money markets, currency markets and capital markets – their major features and modus operandi. The role and functions of central banks; monetary policies; institutions and regulatory surveillance; IMF and its statutory functions. [2.5 hrs]

Lecture 7: Factor flows

International investment flows; international enterprise; motivations and performance of international corporations international capital flows. Natural resources; international labour flows; technology transfers [1.5 hrs]

Official mid-term test in writing [1.0 hr]

Lecture 8: International enterprise and global value chains

Discussion of results of mid-term test.Facts and figures concerning international investment. Motivations and modus operandi of international enterprises. The concept of global value chains, typology of GVCs and selected aspects of the presently ongoing debate on their performance [2.5 hrs]

Lecture 9: Regionalism and economic integration

Regional agreements; motivations and objectives; main operational principles; regionalism vs. multilateralism – synergy or conflict; national interests vs. common goals. The European Union in the world economy; common trade policy, its objectives and modalities; the economic fundamentals of the european integration; strategic global economic priorities of the EU; European integration and international challenges (including migration crisis). [2.5 hrs]

Lecture 10: Major economic players: EU, USA, Japan and China in the world economy

Overview of economic potential, principal interests, policy objectives and world-wide economic performance of these countries in the last decades, but mainly now and in the medium-term future; economic underpinning of the process of building up their global national economic and political status; projections [2.5 hrs]

Lecture 11: Cooperation, challenges, crises and conflicts in the world economy today

A broad description of common and diverse interests; contemporary challenges: trade, environment, demography, energy and natural resources; crisis situations since the beginning of 21st century; Income, wealth ands growth inequalities; policy responses [2.5 hrs]

Lecture 12: Resumé and conclusions from the course

Resumption of major findings from the lecture cycle [1.5 hrs]

Official final test in writing [1.0 hr]

OBLIGATORY:

• 1. John Ravenhill, ed. Global Political Economy, Oxford University Press, 2014

• 2. Paul Krugman, Maurice Obstfeld, International Economics - Theory and Policy, Pearson Education, 2006 [chapters: 1-9; 13; 15; 19-20] and Paul Samuelson, William D.Nordhaus, Economics, McGraw Hill, 2010 (chapters: 2; 10; 17; 18; 19; 27; 28]

• 3.Bożyk Paweł, Globalization and the transformation of foreign economic policy, Warsaw, 2006

OPTIONAL

• Samuelson P., Nordhaus W., Economics (19th or later edition)

• Woolcock Stephen, European Union economic diplomacy: the role of the EU in external economic relations, Ashgate, 2012 (available in the library of the Polish Institute for International Relations)

LEARNING OUTCOMES:

KNOWLEDGE;

Understanding of linkages between the three core components of the world economic change: (1) production factors; (2) the way in which they are used; (3) the systemic and policy determinants of this process.

Improved knowledge of theory and practice of closed vs. open economies; evolution of major doctrines applicable to international economics; the concept of globalization; highlights in the evolution of global economy; insights into practical experience; interrelationships between economic growth and the applied model of external relations; interdependence between economic and political instruments of national macroeconomic and foreign policies; guidelines on international economic management

Upgrading students’ knowledge of theoretical and practical aspects of international economics

Basic knowledge of financial policy instruments as applied in external economic policies, including: financial assistance, international financial markets, foreign direct investment flows and international financial sanctions

SKILLS

Development of skills necessary for the analysis of problems affecting public policy and economic practice vis-à-vis external environment (practical aspects of interface between general policies and economics)

Improving individual ability to identify and assess the goals and means of national FEP and how this process relates to individual economic operators

SOCIAL COMPETENCES

Students should be able to formulate and publicly present the assessment and basic conclusions regarding the issues covered by the lectures

IMPORTANT: considering the fact that most of the students come from developing and former state-economy countries, one of the highlights of the course will be the practical aspects of economic transformation with a view to upgrading students’ public policy skills in this area

The maximum total score: 100 points

The minimum score required for the lowest passing grade (grade 3.0): 51 points

Earning credits:

Mid-term test: up to 30 points

Final test: up to 50 points

Individual activity (questions, discussion, attendance): up to 20 points

Not applicable