NYU Stern School of Business

Undergraduate College


Fall 2012

Instructor Details

Wachtel, Paul




KMEC 7-87

To follow


Course Meetings

TR, 11:00am to 12:15pm

Tisch T-201

Final Exam:

Schedule exceptions
    Class will not meet on:
    Class will meet on:


Course Description and Learning Goals

see below


Course Pre-Requisites

see below


Course Outline

see below


Assessment Components

see below



At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well you actually perform in this course.


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.





July 13, 2012

ECON-UB 0011


Fall 2012

Paul Wachtel

Course Meetings

ECON-UB 0011.03 Tu, Th  9:30-10:45

ECON UB 0011.04 Tu, Th, 11:00-12:15

Location:  Tisch 200

Course Description and Learning Goals

The objective of this course is to provide future decision-makers with a systematic understanding of critical aspects of the global business environment.  We will examine the basic workings of the macro economy and then explain the role of international trade and international finance.  We show how the forces of globalization affect international business and the careers of Stern students.  The challenges presented by tepid economic growth in the US, the financial crisis in the Euro zone and the long run prospects for global economic growth are discussed

The course is divided into three parts:

In short, Economics of Global Business provides Stern students with an overview of global economic issues.  It serves as the basis for the International Studies Project and is a prerequisite for many elective courses in international business and economics.

Course Pre-requisite: ECON-UB 1 (neé C30.0001) Microeconomics

Required Course Materials


Thomas Pugel.  International Economics, 15th edition, McGraw-Hill Irwin, 2012.

Paul Krugman and Robin Wells, Macroeconomics, 3rd  edition, Worth, 2013

Both books are available as custom readers that include the chapter assigned.  Information about  eBooks and how to obtain them can be found on Blackboard.

The prior editions of both books are perfectly satisfactory; the content is little changed.  A guide to any differences between the editions will be posted on Blackboard.

Additional readings

Other readings will be found on Blackboard - either the file or link to the library will be posted.


Students should keep up with the economic news by becoming regular readers of the Financial Times or the Wall Street Journal or The Economist.


Course Faculty

Paul Wachtel







Paul Wachtel is a professor of economics at New York University Stern School of Business. He has been with Stern for 40 years and has served as the chairperson of the Economics Department, Vice Dean for Program Development, chairperson of the University Faculty Council and is currently the academic director for the BS in business and political economy degree. He is the co-editor of Comparative Economic Studies.  He received his Bachelor of Arts degree from Queens College in 1966, his Master of Arts in economics from the University of Rochester, and his Doctor of Philosophy from the University of Rochester in 1971. He teaches courses in monetary policy, banking and central banking, global macroeconomics, international economics and global perspectives.  His primary areas of research include the relationship of financial development to economic growth, central banking in the post-crisis world, and financial sector reform in economies in transition. He has published widely in these areas; see http://pages.stern.nyu.edu/~pwachtel/

Teaching Assistants

            For 9:30 class --

            For 11:00 class –


Students may attend office hours of either TA whenever convenient. However, grading and record keeping will be handled by the TAs according to class assignment.


Important Dates

            Exam I – Tuesday, October 9th

                Exam II – Tuesday November 20th

            Final Exam –


If for any reason you will not be able to make one of the exam dates, please discuss it in advance with Professor Wachtel so we can make alternative arrangements.


NO CLASS will be held on:

            September 18

            October 2

            October 16


Assessment Components

The course grade will be based on the following items with the weights shown:

            Exam I                                                 30%

            Exam II                                                30 %

            Final exam                                            35%

            Class participation and assignments       10%


At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note however that the School uses these ranges only as a guide.  The actual distribution of grades for this course may differ from the above and your own grade will depend explicitly upon how well you actually perform in this course. 

Professional Responsibilities for this Course


Class attendance is essential to your success in this course and is part of your grade. An excused absence can only be granted in cases of serious illness, grave family emergencies, or religious observance. Job interviews and travel plans are not considered as valid reasons for absence from class.

Whenever possible, please notify Professor Wachtel by email in advance if you do not expect to be in class, whatever the reason.


In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.  Contributions should be germane, thought out and considerate of the time and interest of your fellow students.

From time to time, I will announce in class and/or by email that a topic or article that will be a subject for class discussion.  In such instances, I expect all students to be prepared to participate in the discussion and I will feel free to cold call students. Further, participation in these instances will be noted and graded.


Late assignments will not be accepted unless there is a valid reason with arrangements made in advance of the due date. .

Classroom Norms

Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here: http://www.stern.nyu.edu/uc/codeofconduct


July 13, 2012

Paul Wachtel

Fall 2012

ECON-UB 0011 



Course Outline and Readings



            TP – Pugel, International Economics, 15th ed.

            KW – Krugman and Wells, Macroeconomics, 3rd ed.

Links are provided below for other items or the files are posted on Blackboard.


Schedule and reading assignments are subject to change.



Part I – Trade and trade policy


Class 1

          Introduction: Globalization and performance of national economies.       READINGS:

            TP chapter 1 and chapter 2 provides an optional review of basics

            Ben S. Bernanke,Global Economic Integration: What's New and What's Not?  August 25, 2006

Globalization: The Story behind the Numbers, IMF Finance & Development, March 2002.


Classes 2 - 4

            Why do countries trade? 


TP chapters 3 to 6


Classes 5 – 7

How governments interfere with trade and why


TP chapters 8 to 12

Edward Gresser, Toughest on the Poor: America’s Flawed Tariff System, Foreign Affairs, Nov./Dec. 2002.

Mark Groombridge, America’s Bittersweet Sugar Policy, Cato Institute, Dec. 2001.

Price Gap Puts Spice in Sugar-Quota Fight, WSJ, March 15, 2010.


Class 8

            Trade, growth and the environment


                        TP chapters 7 (to p. 131) and 13.  Pages from chapter 7 are on BB.

                        Laura Jones, Should Environmentalists Support Free Trade? Fraser       Institute, 1999.

                        Reuters, China Denounces Carbon Tariff idea ahead of Copenhagen, Dec.        2009.


Class 9 – October 9 -- Exam I



Part II – Understanding the Modern Macro economy


Classes 10 - 11

          Introduction to macroeconomics and measurement


            KW chapters 6 - 8

                        Measuring What Matters: Economic focus, The Economist, Sept. 19, 2009


Classes 12 - 14

Growth and the economy in the long run


            KW chapters 9 and 10

            W. Lewis, The Power of Productivity, McKinsey Quarterly, May 2004.


Classes 15– 16

            Fluctuations in economic activity


            KW chapters 11 and 12

            Krugman Babysitting Parable

            Much Ado about Multipliers: Economic focus, The Economist, Sept. 26, 2009.


Class 17

Fiscal policy and deficits


KW chapter 13

Olivier Blanchard and Carlo Cottarelli, Ten Commandments for Fiscal Adjustment in Advanced Economies, June 2010.

Simon Johnson and James Kwak, Four Steps to US Fiscal Health, August 2010.

Simon Johnson, Spend Less, Owe Less, Grow the Economy, Joint Economic Committee of Congress Testimony, June 21, 2011.



Classes 18-19  

            Money and monetary policy


KW chapters 14 to 16


Class 20  – November 20 – Exam II



Part III – International finance and policy 


Class 21

          Balance of payments


            TP chapter 16

M. Higgins and T. Klitgaard, Viewing the Current Account Deficit as a Capital Inflow, Federal Reserve Bank of NY, Dec. 1998.

Fred Bergsten, New Imbalances Will Threaten Global Recovery, Financial Times, June 10, 2010.

Ben Bernanke, Global Imbalances: Recent Developments and Prospects, Sept. 11, 2007.


Classes 22 - 23

Exchange rates, interest rates and inflation


TP chapters 17 to 19

The Economist’s, Big Mac Index

C. Fred Bergsten, The Dollar and the Deficits, Foreign Affairs, Nov,/Dec, 2009.


Classes 24 – 25

            Exchange rate regimes and monetary union


            TP chapter 20 and 25

            John Makin, Exchange Rate Stability in International Finance, May 1999.


Class 26

            Banking crisis, sovereign debt crisis and more


            TP chapter 21

          Greg Mankiw, What’s with all the Bernanke Bashing? New York Times, July 30, 2011

            Greg Mankiw, Crisis Economics, National Affairs, 2010.

            Simon Johnson, The Quiet Coup, The Atlantic, May 2009.



Final Exam --


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