ECON 305 (Comparative Economic Systems)

ECON 305 - Comparative Economic Systems *Fall 2007*	Professor Elliott Parker Office: AB 319-C
TR 9:30 - 10:45 AM SEM 234	Office Hours: TR 11:00-11:50 AM or email me for an appointment

For Printing: one-page Short Syllabus

First Midterm (with Key) | Second Midterm (with Partial Key to Part I) | Final Exam (with Partial Key to Part I)

Note: if you find any broken links in this page, or have any suggestions for useful additions, email me!

Second Paper Assignment

Topic: How does a country's openness to foreign tourism, trade, and investment affect its other economic policies and its growth performance? Consider the major theoretical reasons given in lecture, in the textbook, and in the book you used for your first paper. You should also do some extra outside research on the question, going beyond the assigned readings, and you also go beyond the superficial explanation. Next, choose two countries which have had substantially different growth results in the past fifty years, countries which might share some similarities but which have a history of very different trade and investment policies. Briefly describe these two countries, explaining their important similarities and differences, and explain why their policies and growth performance was different. Finally, explain how your results from these two cases fit in with your discussion of the theory you described.

Don’t choose the U.S., Russia, or any country which has been recently torn apart by war, and before you make a final decision you should make sure you can find enough sources in the library. You must use a significant amount of outside research in addition to any relevant assigned readings, and all references must both be cited (Name year: pages) in the text and listed alphabetically in a bibliographic section at the end entitled "References." Use a variety of sources, including books, journal articles, newspaper articles, and official websites.

This is a research paper worth twice as much as Paper 1, and should be approximately 12-15 pages (not including the cover page, references, and tables). Use the same basic format as in the first paper assignment.

Paper Due Date: Start of class on Thursday, December 6, 2007. Again, turn in a disk with your paper on it. Late papers will lose one full grade per week (prorated), and all papers must be turned in by December 19 to receive any credit.

Course Description:

ECON 305 examines the major economic systems of the world, in both theory and practice. The approach will generally focus on encouraging a general understanding of how economic systems work and how economic theory interacts with government policy, history, and culture to explain economic performance. Economies examined in some detail will include several advanced market capitalist countries (e.g., the U.S., Japan, France, Sweden, and Germany), the former socialist economies (e.g, the former Soviet Union, Poland, and China), and other East Asian economies (e.g., South Korea and North Korea). We will also consider Iran as an example of an Islamic-based economy, and India as an example of an isolationist country that is now beginning to join the global economy.

Prior study in economics (ECON 102 and 103) is required, but this course will be less quantitative than other theory courses. As a course which spends substantial time focused on the diversity of economies, ECON 305 meets the diversity requirement of the University Core Curriculum. One component of the diversity requirement is a rigorous writing requirement.

If you want to know why it is important to learn the material in this course, you might view this You-Tube video called, Americans are not stupid. I find it more painful than funny, and I hope that it is not a statistically valid sample of my fellow Americans.

Books:

REQUIRED TEXTBOOK:

Rosser, J. Barkley, Jr., & Marina V. Rosser (2004), Comparative Economics in a Transforming World Economy, Second Edition. MIT Press, Cloth ($100). ISBN 0262182343.

PLUS AT LEAST ONE OF THE FOLLOWING THREE SUPPLEMENTAL BOOKS:

Bernstein, William J. (2004), The Birth of Plenty: How the Prosperity of the Modern World was Created. McGraw-Hill, hardback, ISBN: 0071421920. Available Online.
Friedman, Thomas (2000), The Lexus and the Olive Tree: Understanding Globalization. Anchor Books, paperback, ISBN: 0385499345.
Olson, Mancur (2000), Power and Prosperity. Basic Books, paperback, ISBN 0465051960.

These books are available at the ASUN Bookstore in Jot Travis Student Union (JTSU), or you can order them online through companies like Amazon.com or ecampus.com. You might go first to Bigwords.com, which compares prices for you.

Other readings listed in the schedule will generally be available online, or in Getchell library at the reserve desk, next to the main checkout desk.

Grading:

This course requires a significant amount of writing, and your ability to express yourself clearly in writing will significantly affect your grade. Grading will depend on:

Three Exams (two midterms and a final) -- 20% each, 60% total.

Daily One-Minute Essays or other in-class assignments -- 10% total

First Paper -- 10%

Second Research Paper -- 20%

Exams will be long, in-class, closed-book, mostly essay exams, requiring both an ability to express yourself in writing and a good understanding of the lectures and the assigned readings. You will find them challenging. Papers will be assigned at least three weeks in advance of their due dates, and are expected to be in formal academic style; the first paper is 6-7 typed pages requiring some outside research, whereas the second paper is a more formidable research paper of 12-15 pages in length. More instructions for the papers will be given in the assignments, but you can look at prior assignments for what I usually expect. One-Minute Essays will be due at the end of class each day. I will usually want you to tell me something interesting you learned from the lecture, but sometimes I may ask other questions.

Would you like to see sample assignments from prior semesters?

Fall 2006:
First midterm with key, first paper assignment, second midterm with key, second paper assignment and final exam with key.

Fall 2004: Exam 1 (with answer key), Paper Assignment 1, Exam 2 (no key available), Paper Assignment 2 (here is my grading sheet), and Exam 3 (no key available).

What is the Difference between A and C students?

Cheating:

Any cheating will be severely punished, ranging from failing the exam or assignment at a minimum to failing the course and even expulsion from the university, in egregious cases or in cases where there is evidence of any prior offenses. Students who are caught cheating also lose their chance at college scholarships. I am serious as a heart attack about this.

Cheating includes both copying someone else's work as well as letting your work be copied, bringing in notes, text messaging or taking pictures of the exam, plagiarizing other people's words or ideas and passing them off as your own, et cetera. One common example is a student who copies whole sentences and even paragraphs from an internet source, changing a few words here and there perhaps. Even if you cite the source, it is still plagiarism if you do not put quote marks around the words you borrowed.

School and Work:

Economics is essentially about making decisions when resources are scarce, and time is often our most scarce resource. Many of you work, but working too much while going to school makes it hard to focus on your studies and succeed in school. The College of Business Administration recommends the following maximum relationship between work and school:

Work Hours Per Week Credits Taken per Semester

10 15

20 12

30 9

40 6

These maximum recommendations work both ways. For example, a student working 10 hours per week should not take more than 15 credits and conversely, a student who is taking 15 credits should not work more than 10 hours per week. Of course, many of you will choose to exceed these maxima, but you should know that unless you have superpowers or take extremely easy courses, you are setting yourself up for lower grades, inadequate sleep, or other trouble. If you do not have scholarships or other means of support, then you might consider taking fewer credits per semester and an extra year or two to graduate.

Schedule:

SCHEDULE OF READINGS AND LECTURES

I. INTRODUCTION TO COMPARATIVE ECONOMIC SYSTEMS (5 lectures)

A. The Classification and Comparison of Economic Systems -- 2 lectures
Read Rosser & Rosser (R&R), ch. 1; my lecture notes on classification and comparison; and a recent Table of statistical data for comparison countries. Angus Maddison has an impressive review of the last two thousand years of economic growth, including history and many tables full of population and GDP estimates. This OECD publication, The World Economy : A Millennial Perspective (2001) is available online and in the library, though you must get the proper permissions to access it since it is only available to UNR faculty, students, and staff.
B. The Roots of Modern Economic Systems -- 3 lectures

1. The Historical Development of Capitalism -- 1 lecture

Read R&R, ch. 2. I also encourage you to read the first section of Bernstein's book.

2. Classical, Marxist, Neoclassical, and Evolutionary Theories of Economic Change -- 1 lecture

Read R&R, chapter 3, the first part of my lecture notes on economic change, and you could also review the New School's website on the Classical Ricardian School. Read also my lecture notes on growth and evolution, and see Schumpeter, J.A. (1942), Capitalism, Socialism, and Democracy. Also, just for fun, you might want to check out Serendip's version of Conway's Game of Life to get a sense of how mathematicians might simulate chaotic interactions without using math.

II. THE ECONOMIC THEORY OF CAPITALISM (4 lectures)

A. The Theoretical Efficiency of the Market -- 1 lecture
The Five Theorems. Market Distortions. The Austrian Critique. Macroeconomic Stability.
Read R&R, ch. 2; the classic article by Hayek, F.A. (1945), "The use of knowledge in society," American Economic Review 35,4: 519-30 (online); and my lecture notes on market efficiency, market failure, government intervention and public failure.

B. The Marxist-Leninist Critique of Capitalism -- 1 lecture
Finish R&R, chapter 3; The Communist Manifesto, by Karl Mark and Friedrich Engels (1848); and review the New School's website on the Marxian School. Also see my lecture notes on Marx.

C. Market Failure, Government Intervention, and the Problem of Social Choice -- 1 lecture
Read my lecture notes on social choice, and I encourage you to read chapters 1-6 of Olson's book. Also check out Serendip's simulation of a Prisoner's Dilemma game to understand this very important model of cooperation versus self-interest.

D. The Institutions of a Market Economy (e.g., the economy of the United States)-- 1 lecture
Read R&R, ch. 5. I will use the United States as a basis for comparison. For an introduction, albeit simple, to the market economy, see What is a Market Economy, by Michael Watts, produced in cooperation with the Joint Council on Economic Education.
E. Globalization and the Impact of International Trade & Finance -- 1 lecture

I suggest you read Friedman's book, especially chapters 1-9. You might also want to read these reviews of his book:

Thomas Frank (1999), The Lexus and the Olive Tree: Understanding Globalization. - Review, Harper's Magazine.
Paul Krugman (1999), Understanding Globalization, Washington Monthly.
Scott Whitney (1999), The Lexus and the Olive Tree," Salon.

(PDF lecture notes, part 2.B )

FIRST EXAM -- SCHEDULED FOR THURSDAY, SEPTEMBER 27

Note: I strongly recommend that you review The U.S. State Department's Country Background Reports and/or the CIA's World Factbook for each of the countries covered in the next several sections.

III. MODELS OF CAPITALISM (6 lectures)

A. The Japanese Economy
Read R&R, ch. 6; my EC403 Lecture on Japanese development through WWII.

B. European Capitalism

1. The Republic of France

Read R&R, ch. 7.

2. Sweden

Read R&R, ch. 8.

3. The Federal Republic of Germany (Deutschland)

Read R&R, ch. 9.

(PDF lecture notes, part 3)

IV. SOCIALIST ALTERNATIVES (4 lectures)

A. Theories of the Classical Socialist Economy
Read R&R, ch. 3; my lecture notes on Material Balance Planning; Olson, ch. 6-8; and Kornai, J. (1992), The Socialist System: The Political Economy of Communism (on reserve), ch. 15. See also the New School's Essay on The Socialist Calculation Debate.

B. Revolution and Central Planning in the Soviet Economy
Read R&R, ch. 10; and IMF, et al. (1991), A Study of the Soviet Economy (on reserve), ch. 1-3.

C. Labor Management and the Yugoslavian Alternative
Read R&R, ch. 14.

D. China under Chairman Mao
Read R&R, ch. 15.

(PDF lecture notes, part 4)

SECOND EXAM SCHEDULED FOR TUESDAY, NOVEMBER 13

V. ECONOMIC REFORM AND TRANSITION (3 lectures)

A. China under Deng: Development of the Socialist Market Economy
Re-read R&R, ch. 15; my MGRS 470 lecture on China; Parker, E. (1995a), "Prospects for the state-owned enterprise in China's Socialist Market Economy,"Asian Perspective 19,1: 7-36; Parker, E. (1995b), "Schumpeterian creative destruction and the growth of Chinese enterprises,"China Economic Review 6,2: 201-224 (on reserve), and Cargill, T., & E. Parker (2001), "Financial liberalization in China: Limitations and lessons of the Japanese Regime," Journal of the Asian-Pacific Economy 6,1: 1-21 (on reserve).
PDF: Lecture V.A
B. Problems of Economic Reform and Transition

C. The Troubled Transition of the Russian Economy
Read R&R, ch. 11.

D. Reform and Transition in Central and Eastern Europe
Read R&R, ch. 12, 13.

(PDF lecture notes, part 5)

VI. OTHER ALTERNATIVES (3 lectures)

A. Islamic and Other Alternatives
Read R&R, ch. 4.
B. The Iranian Economy
Read R&R, ch. 17.

C. India's Experiment with Self-Sufficiency
Read R&R, ch. 16.

D. Economic Development in Mexico
Read R&R, ch. 18.

(PDF lecture notes, part 6)

VII. LESSONS FROM COMPARATIVE ECONOMIC SYSTEMS (2 lectures)

A. Contrasting Paths on the Korean Peninsula
Read R&R, ch. 19.

B. The Way Forward
Read R&R, ch. 20.

FINAL EXAM FIRMLY SCHEDULED FOR FRIDAY, DECEMBER 14, 7:30-9:30 AM
(Don't blame me, I don't make the schedule.)

The San Francisco Fed has a good site summarizing the great economists and their times (including the major schools of economic thought). You can find the written works of Marx and Engels online, as well as a site devoted to the works of Friedrich Hayek. See also the economics section of the Idea Channel.

Study Questions, Part III

How is market socialism different from classical socialism? What contradictions are inherent in market socialism?
How does the labor-managed economy work in the theory of the Ward-Vanek-Domar model? What are the major hypotheses of the model?
How might the labor-managed firm differ in a capitalist economy versus a socialist economy?
Describe the major economic policies of Tito's Yugoslavia before the breakup. How did this economy differ from the classical socialist economy? How did it perform, and how did the design of its economic institutions lead to its peculiar problems?
Discuss the major economic reforms in China under Deng Xiaoping. Contrast reforms in agriculture and industry.
How did reform under Jiang Zemin accelerate?
What is the significance of China's "Socialist Market Economy," and what reforms and policies does it entail?
What were the causes of the current crisis in China's state-owned enterprises and banking system?
What was the Brezhnev Doctrine?
What were the major political and economic events of the collapse of the classical socialist economies? Consider in particular the events and policies after the end of the Brezhnev Doctrine.
How does a strategy of transition differ from the "perfection of control" or other policies of economic reform within the socialist economy?
How does the "big bang" approach differ from gradualism?
What are the major elements required of a strategy to transition to a market economy? What problems are likely to be experienced along the transition path?
Why is a socialist economy in transition likely to suffer a dramatic initial economic decline? What political and social difficulties are likely to be encountered?
How is market socialism different from classical socialism? What contradictions are inherent in market socialism?
After the collapse of the Soviet Union in 1991, what general approach and specific policies did the Yeltsin government take to Russia's economic transition? What political and economic difficulties did it encounter? How did it reform the Central Bank, and why?
What caused the Russian financial crisis of 1998, and what impact did it have on Russia's economy?
How did Poland, Chechoslovakia, and Hungary attempt to move away from the Soviet model in the years between Stalin and Gorbachev? To what extent were they successful? Explain.
Compare and contrast the policies of economic transition after the fall of communism in Russia, Poland, Hungary, and Czechoslovakia. Pay particular attention to how these economies performed in transition, and why.
What are the key elements of an Islamic economy? Why is it considered neotraditional?
To what extent is the economy of Iran since the revolution actually Islamic, and a general model for other emerging Muslim countries?
To what extent was India's economy after independence socialist? How were its philosophical bases different from that of the classical socialist economy? To what extent were its policies similar, and how were they fundamentally different?
What reforms did India implement after the assassination of Rajiv Gandhi, and why? To what extent have they been successful?
What are the important elements of Mexico's economic history since its independence?
How was the revolution against the Diaz regime similar to socialist revolutions, and how was it different?
What are Mexico's three cultures, and how are they reflected in the Mexican economy and government policy?
What changes in Mexico's government policy have emerged in the past 15 years, and what has caused them?
Compare the economic development of the two Koreas since the Korean War. What initial conditions did each begin with? What policies were implemented, and how did these policies change over time?

(Click Here for Past Questions)

ECON305 Listserver / Newsgroup

I have set up a "List Service" mailing list for the purpose of conducting group discussions via email, using the Majordomo software, and I will ask for your e-mail address during the first week of class, and sign you up myself. If you find that you are not receiving e-mails from me, e-mail me to tell me and I will add you to the list. If you are on the list and still not receiving messages, please check your spam filter since list messages are often blocked.

Only people actually subscribed to the list may send any email to the list. To send an email to the everybody on the list, send an e-mail to econ305@unr.edu. The message you send will go to everybody who has subscribed, including me. Try to keep the spam down. Be thoughtful of others, keep on the subject as much as possible, and do not carry on private, irrelevant conversations on the list. If you wish to make a reply to an individual, be careful not to send a copy to the list. Also, do not flame! Give other students the respect you would demand of them; do not insult them explicitly or implicitly, and do not say anything vulgar or improper. Remember that I will read your messages, and even if you send something to an individual it is easy for him or her to forward it on to me.

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