Kristin J. Forbes

15.018| 15.014 |15.012 | 15.227

15.018 (previously 15.014 in Spring 2009) : Global Economic Challenges

Global trade and capital flows have increased dramatically. Global growth reached record levels at the start of the 21st century. Analysts wrote about a new era of globalization in which financial crises were history, the business cycle had been tamed, prices were stable, and emerging markets could continue to rapidly develop and “decouple” from problems in the United States. Then a global financial crisis erupted—starting in the U.S. housing market and spreading around the world—shattering these optimistic predictions. Recent attention has focused on the immediate priority of resolving the current crisis, but as a result policymakers may once again delay addressing longer-term challenges, thereby planting the seeds for the next crisis.

This course builds on the basic tools of macro- and international economics from courses 15.012/15.015 to provide in-depth analyses of major economic challenges facing the global economy. It is divided into two sections. The first section examines the causes, lessons, and responses to financial crises, with a focus on understanding current events in the global economy. The second section explores other major global economic challenges, including: global imbalances, sovereign wealth funds, insolvent entitlement programs, global warming, inequality and poverty, and the implications of the rise of the BRICs ( Brazil , Russia , India and China ) and “frontier” economies” (such as Vietnam, Kenya, Ukraine, Kuwait, Nigeria, and the UAE) for the global economy.

Syllabus (Spring 2009)	Study Questions (Spring 2009)

15.014 : Applied Macro and International Economics: Extended Version

This course uses case studies to investigate the macroeconomic and international environment in which firms operate. Most classes will focus on a key economic concept in the context of a different country. Therefore, each class will provide an opportunity to explore why different governments adopt certain economic policies, as well as how these policies affect the ability of companies to do business. The course will also provide an opportunity to learn about the major economies around the world, how they differ, and what their prospects are for the future.
 
The course is divided into four sections. The first develops the basic tools of macroeconomic management (monetary and fiscal policy) focusing on the U.S. economy. The second section evaluates different strategies of economic development and why some countries grow faster than others, with topics covering issues such as technological progress, natural resource dependency, exchange rate management, trade, and foreign aid. The third section discusses several recent crises in emerging markets, evaluating the causes of these crises, how to avoid them, and how to predict what countries will experience crises and contagion in the future. The final (and longest) section of the course evaluates several challenges facing developed countries in the 21st century, such as the U.S. trade deficit, high unemployment in Europe, aging populations and insolvent entitlement programs, high oil prices, and the emergence of China and India as major economic powers, including concerns about outsourcing, globalization, and job losses.

15.012 Applied Macro and International Economics

This course uses case studies to investigate the macroeconomic and international environment in which firms operate. The first section of the course develops the basic tools of macroeconomic management (monetary and fiscal policy) in the context of three historic cases. The second section evaluates different strategies of economic development, with topics ranging from technological progress and natural resources to exchange rates. Section three examines several recent crises in emerging markets, evaluating the causes of these crises as well as how to avoid them from reoccurring in the future. The final section of the course evaluates several major challenges facing developed countries in the 21st century, such as European Union, slow growth in Japan, and the "new economy" of the United States, and disputes over trade and globalization.

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15.227 H1: Macroeconomic Issues in International Management

This course develops several basic tools in macro and international economics and then uses these tools to evaluate a variety of challenges facing countries around the world. The first section of the course briefly reviews the basic tools of macroeconomic management that were introduced over the summer. The second section evaluates different development strategies, with topics ranging from trade and industrial policy to debt management and political freedom. The third section discusses four crises in emerging markets in the 1990s and examines the causes of these crises as well as how to avoid them from reoccurring in the future. The final section of the course evaluates several major challenges facing developed countries in the 21st century.

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