Economics

Summer

• Managerial Economics
  This course applies the ideas and methodology of economics to analysis of the firm, key decisions within the firm, and the industry. Topics covered include costs, pricing, competition, economic efficiency, and industry equilibrium and change. Particular attention is paid to behavior of the firm and industries when uncertainty and transaction costs exist. The course combines lectures/discussions of principles, with cases covering both current and classic firm and industry dilemmas. Issues of public policy, especially regarding pollution, are also covered.

Fall

• Countries and Companies in the International Economy
  This minicourse focuses on the interaction between countries and firms in the arenas of international trade, investment, and finance by applying and extending the tools acquired in the Global Economics for Managers core course. The ultimate objective is to help you and your organization make decisions in today’s global economy. Two broad themes recur throughout the term. One emphasizes the analysis of decision-making at the country level with emphasis on the constraints implied for individual enterprises. We visit a number of countries around the world that are at various stages of economic and market development and thus that face issues of monetary union, currency crisis, trade liberalization, and economic integration. In each case we consider how these events provide opportunities and constraints for companies. The second main theme of the course concentrates on the decisions faced by companies themselves as they participate in the international economy. Across a range of countries we look at issues surrounding production location, market entry, cross-border pricing, exchange-rate risk, hedging, and integrating the supply chain.
• Leadership in the Global Economy: Contemporary Economics and Business
  Here in 2024, the global economy continues to find its way amidst the lingering harms of the pandemic, the hopes of new technologies like generative artificial intelligence, and the uncertainties about where new leaders with new visions will come from to help turn myriad worldwide challenges into opportunities. The pandemic arrived at a time where the fusion of digital, global, and social forces continues to create immense business and economic opportunities—and yet serious pressures and anxieties as well. Perhaps most prominent among these anxieties is the fading belief among many people in many countries in the dynamic forces of globalization and innovation. Much of this ambivalence and related anxiety stems from workers and their families not seeing sufficient growth in their income, wealth, and sense of opportunity: sufficient relative to earlier decades, relative to those at the top, and relative to their hopes and expectations. We live in a time where many nations are fractious and less trusting, with far less consensus about the proper balance among for-profit businesses, sovereign governments, and civil society. Several business-policy questions await the rest of 2024 and beyond. Will central banks manage to continue reducing inflation without triggering recession or financial crises? Will fiscal authorities create additional supports for workers, families, and communities? How will generative AI evolve in companies—and how will governments respond to all this? Will the U.S.-China trade war and broader disagreements over issues such as technological superiority deteriorate further or improve? What sort of fresh policies might be pursued in the emerging markets across Africa, Asia, and Latin America? What about the grinding evolution of global warming and climate change? Nearly half the world’s population will participate in national elections by the end of this year: will newly elected leaders craft new leadership stories that bring the potentially vast gains of globalization and innovation to more workers, communities, and families? LGE provides us a chance to engage with all these contemporary business and policy issues that are top of mind around the world in C-suites, boardrooms, and halls of government power—for aspiring unicorns and for generations-old companies alike.
• The Future of Capitalism
  In 1989, the Berlin Wall came down and Communism in Eastern Europe imploded from within, followed two years later by the collapse of the Soviet Union. These events made liberalism – democracy and free markets – look triumphant. Francis Fukuyama called it “the end of history,” since history seemed to have reached its goal. The debate over political and economic systems was over: we had figured out the best way to organize a society’s politics and the economy. Things look different now. Many today look at growing inequality, environmental catastrophes, and political polarization, and are more likely to say they do not endorse democracy or free markets. For many, the promise of socialism is more satisfying than the reality of capitalism. Even capitalism’s strongest proponents often feel that it is due for an overhaul. This course aims to give you a sense for the current debate over capitalism and its alternatives, weighing the advantages and disadvantages of different approaches. This course will examine the following core questions: 1. What is capitalism? 2. What are the alternatives (and how have they worked)? 3. How do markets work and when do they fail? 4. Should businesses be run solely to maximize profit? 5. Is capitalism exploitative? 6. Do markets promote freedom or oppression? 7. Is capitalism fair? Does it reward merit? 8. Does capitalism make us happy? 9. How can we make capitalism work better?
• Cooperation and Competition in the 21st Century Global Economy
  The 21st century global economy will be defined by how government and business leaders respond to today’s complex policy challenges. This mini-course centers on a handful of critical economic policy issues, organized around the central theme of cooperation and competition. Topics include the rise of global value chains, national security, and the innovation race; rising market power and international data security; the deterioration of global governance rules and norms; and the challenges of sustainable and inclusive globalization, including the coming battles over carbon taxes. The course will leverage economic tools and data to inform and refine our understanding of market outcomes, market failures, and the scope for policy. These economic principles will be balanced with an emphasis on the interplay between firms, governments, and international institutions and agreements in practice.

Winter

• Policy, Politics, and Business
  This course will probe the boundaries between the public and private sectors and serve as an anchor class for students involved in the Center for Business, Government, and Society. The goal is to deepen students’ understanding of markets and explore how and why public policy creates institutions that support a robust private sector. The class will explain why many contemporary public policy problems cannot be addressed by the private sector alone. At the same time, we will discuss how private firms can play a more creative and robust role in addressing social challenges. One throughline of the course will be an exploration of the interplay between business, policy, and politics. Much of the focus will be on the American system, though the concepts are broadly applicable and students will be urged to apply lessons to other countries. All policy discussions in the class will be filtered through a political economy lens: Why does our political system produce the outcomes that it does? And what factors make a substantively attractive policy more or less politically viable. A handful of guests will share their experiences at the intersection of policy and politics.
• Global Economics for Managers
  Global Economics for Managers will expand your knowledge of economics in two directions. First, expansion of the scope of inquiry covers the economics of the nation in a global economy. This portion of the course will cover international economics and macroeconomics. The focus of study will be on the larger economic forces that shape production, trade flows, capital flows, interest rates, exchange rates, and other variables that create the global economic landscape. The second direction is international microeconomics which will apply the tools of microeconomics and international economics to illustrate how globalization influences performance, strategy, and policy within firms. The ultimate objective is to help students develop a framework for analyzing both opportunities and risks in a global economic environment.

Spring

• Global Structure and Conduct of Firms
  Firms operate in a global market. The rise of multinational production, the greater ease of transmitting knowledge, and the growing importance of global value chains have all contributed to deeper economic integration across countries. Recent events, such as the US trade wars and the COVID-19 pandemic, threaten this globalization. In this RTP, we will study how firms have contributed and responded to increased globalization, and how they may adapt to current and future challenges to it. We will use an economic framework to guide managerial decisions on where to locate production, whether to outsource or integrate fragmented production, and when to adopt new technologies. We will also analyze how firm-level responses to globalization affect industry and country-level outcomes, such as employment, wages, productivity, and innovation. The focus will be on recent empirical approaches and evidence so that students can: a) evaluate an empirical analysis and its credibility, and b) develop a data-driven approach to making managerial decisions.