NYU Stern School of Business

Undergraduate College


Spring 2011

Instructor Details

Lincoln, Edward



Tuesday 4-5 p.m.

KMC 7-89


Course Meetings

MW, 11:00am to 12:15pm

Tisch T-UC24

Final Exam:

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


Course Description and Learning Goals

This course will cover the economic development and current structure of East Asian economies, as well as the rise of regional economic interaction and institutions.  For the past several decades (and earlier for Japan) the region has been the most vibrant in the world in terms of economic growth.  The economic experience of this region provides a means to reinforce many of the topics presented in the course Economics of Global Business.  The experience of these countries also provides interesting challenges to some of the usual assumptions about how economies and corporations should be organized and governed in order to be successful.  When, why, and how did these economies begin the process of economic development?  Why have many of them been so successful at growing and industrializing quickly?  How do these economies operate today?  How does the government interact with the economy?  How do firms behave (including both internal governance/structure/behavior and competition in the marketplace)?  What issues and problems will confront these countries in the future, issues that will be important for you to understand as you enter the world of business?  In addition, evolution of a regional policy dialogue, through the ASEAN+3 meetings and a proliferation of bilateral and sub-regional free trade agreements, provides an opportunity to examine important issues related to exchange rate policy, regional trade preferences, and macroeconomic policy coordination. 


For the purposes of this course, “East Asia” consists of Japan, China, South Korea, Taiwan, Hong Kong, and the nations of Southeast Asia belonging to the Association of Southeast Asian Nations (ASEAN).  These economies span a very wide range of levels of development, economic structure, historical experience, and government policies.  The course does NOT include South Asia (India, Pakistan, Bangladesh, etc.)


Course Pre-Requisites

30.0011 Economics of Global Business (Stern)


31.0001 Economic Principles (Arts and Sciences) or the equivalent.


Course Outline




           Class 1:  Introduction.  What is East Asia and why is it interesting?  The record of high growth and successful economic development.

                        Monday, January 24. 

                        Readings:  Frost, chapters 1 and 2.


            Class 2:  Group Projects.  Formation of groups and choice of countries to work on.  Discussion of sources of material, construction of charts, and other issues.

                        Wednesday, January 26. 



            Module 1:  Japan



            Class 3:  1600-1974—the foundations and the process of industrialization.  What is the necessary foundation for modern economic growth?  How did Japan manage to catch up with the advanced industrial nations?

                                Monday, January 31.  

Readings:  Louis T. Wells, Jr., “The Miracle Years,” Harvard Business Publishing Cases, No. 702014-PDF-ENG, April 22, 2008.


            Class 4:  Macroeconomic performance 1974-2009.  Growth accounting, changes in macroeconomic balances, the role of productivity, demographics, education, etc.

                        Wednesday, February, 2. 

                        Readings: none


            Class 5:  Macroeconomic policy.  How the government has handled both monetary and fiscal policy? 

                                Monday, February 7. 

Readings:  Akiko Kanno and Laura Alfaro, “Kinyuseisaku: Monetary Policy in Japan,” Harvard Business Publication Cases, No. 708017-PDF-ENG (April 9, 2009).


            Class 6:  Industrial policy.  What did/does the government do to encourage economic development.  Did it matter or not? 

                                Wednesday, February 9. 

Readings:  Marcus Noland, “From Industrial Policy to Innovation Policy: Japan’s Pursuit of Competitive Advantage,” Asian Economic Policy Review, (2007) 2, 251–268.


            Class 7:  The corporate sector.   Corporate governance models challenged.  Who controls the corporations, and how does this affect their behavior?  The company as family and the implications for labor practices, mergers and acquisitions, etc.  

 Monday, February 14. 

Readings:  W. Carl Kester, Robert W. Lightfoot, “Note on Corporate Governance Systems,” Harvard Business Publishing Cases, No.  292012-PDF-ENG (October 2, 1991)



            Class 8:  The international side of Japan.  Trade policy, inward investment, outward investment.  Why is Japan such a difficult environment for foreign firms?

                                Wednesday, February 16. 

Readings:  C. Fritz Foley and Linnea Meyer, “Nomura’s Global Growth: Picking Up Pieces of Lehman,” Harvard Business Publications, No. 210017-PDF-ENG (August 25, 2009); and Yasheng Huang, “Note on Foreign Direct Investment in Japan,” Harvard Business Publishing Cases, No. 702029-PDF-ENG (January 9, 2002).



********Holiday on Monday, February 21 NO CLASS*********



            Class 9:  The Future of Japan.  The importance of demographics—a shrinking and aging population.

                                Wednesday, February 23. 

Readings:  “Don't bring me your huddled masses; Japanese immigration,”

The Economist, Jan 3, 2009, Vol. 390, Iss. 8612,  pg. 31.



            Class 10:  Test on Japan

                        Monday, February 28.



            Module 2:  China


            Class 11:  Introduction and Developments in the 20th Century to 1980.  Attempts at modernization, civil war, the Communist experiment to 1979.

                        Wednesday, March 2. 

                        Readings:  Naughton, chapters 1, 2,  and 3


            Class 12:  Macroeconomic performance 1980 to 2009.  Three decades of 10 percent annual growth.  Why?  How? 

                        Monday, March 7. 

                        Readings:  Naughton, chapter 6, 18


            Class 13:  Reform and privatization – “Socialism with Chinese Characteristics.”  The merits of rapid versus slow reform of socialist economies.

                        Wednesday, March 9. 

                        Readings:  Naughton, chapter 4, 5, 13


            Class 14:  The financial sector

                        Monday, March 21    

                        Readings:  Naughton, chapter 19; and Yipin Huang, “  “  (unpublished paper)


********Spring Break**********




            Class 15:  China Opens to the World.   Reduction in trade barriers, encouragement of inward direct investment, the beginnings of outward investment.  Balance of payments issues.

                                Wednesday, March 23.

Readings:  Naughton, chapter 16, 17; and Laura Alfaro, Rafael Di Tella, and Igrid Vogel, “To Float or Not to Float?” Harvard Publishing Cases, No. 706021-PDF-ENG (December 1, 2008).


            Class 16:  China’s Future.  Demographics, environment, etc.

                        Monday, March 28.

                        Readings:  Naughton, chapters  7, 15, and 20.


            Class 17:  Test on China.

                        Wednesday, March 30. 






Module 3:  The smaller countries—South Korea, Taiwan, Hong Kong, and Southeast Asia  



            Class 17:  Introduction and Historical Background.  The colonial legacy and the emergence of relatively authoritarian states—1550-1970

                        Monday, April 4.

                         Readings:  Frost, chapter 3.


            March 25.  Class 18:  ASEAN.  The history of ASEAN and its economic cooperation efforts.

                         Wednesday, April 6.  

                        Readings:  Frost, chapter 7 (pp.  132-136).


March 30.  Class 19:  Opening up to trade and investment.  The move away from import substitution models.

             Monday, April 11

            Readings:  none.


            April 1.  Class 20:  The Asian financial crisis of 1997-1998.  Massive exchange rate depreciation and sharp recession.  How could this have happened?

Wednesday, April

Readings:   Laura Alfaro, Rafael Di Tella, and Renee Kim, “Chronology of the Asian Financial Crisis,” Harvard Business Publishing Cases, No. 708001-PDF-ENG (April 23, 2009).


            Class 21:   Group Presentations

                        Monday, April 18. 


            Class 22:   Group Presentations

                         Wednesday, April 20.



            Class 23:   Group Presentations

                        Monday, April 25


            Module 4:  Regional Issues


            Class 24:  Broad regional engagement.  Why did it take so long?  APEC and the question of American participation.  The ASEAN+3 alternative

                        Wednesday, April 27. 

                        Readings:  Frost, chapters 6, 7


            Class 25:  Regional trade initiatives.  Bilateral, sub-regional, regional preferential trade arrangements.

                         Monday, May 2.

                        Readings:  Frost, chapter 8 (pages 151-168).


            Class 26:  Currency cooperation.  Will East Asia ever have a common currency like Europe?  Short of that, what does financial cooperation entail or accomplish?

                        Wednesday, May 4. 

                        Readings: Frost, chapter 8 (pages 168-174).



            Class 27:  Conclusion.  Where is East Asia going?   What does it mean for your career?  The impact of political and security developments on economics and business.

                        Monday, May 9

                         Readings:  Frost, chapters 10, 11, 12


Required Course Materials

There are two books for this course, available at the bookstore by January:


            Ellen Frost, Asia’s New Regionalism (Lynn Reinner, 2008)


            Barry Naughton, The Chinese Economy: Transitions and Growth (MIT Press, 2007).


These books cover material for the China and regional issues segments of the course.  There is no good book providing overall coverage of the Japanese economy.  Therefore, the rest of the reading materials consist of articles, which I anticipate will be available as a course pack.  For East Asia other than Japan and China, students will be involved in group projects, and seeking relevant materials on their own.


Assessment Components

The course grade will be based on the following items:

Test on Japan (February 18)                                                                    15%

Test on China (March 11)                                                                        15%

Group projects                                                                                         30%

Class participation                                                                                   10%

Final Exam (May ??)                                                                               30%           


The final exam focus on the final two segments of the course on Southeast Asia and regional issues, but with the possibility of questions that ask students to bring in comparisons to Japan and China.


Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.



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.



The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.


Professional Responsibilities For This Course




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.
You can excel in this area if you come to class on time and contribute to the course by:




Classroom Norms


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.


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