NYU Stern School of Business

Undergraduate College


Fall 2011

Instructor Details

Wachtel, Paul


212 998 4030


KMEC 7-87


Course Meetings

MW, 9:30am to 10:45am

KMC 5-140

Final Exam: FRIDAY DECEMBER 23 at 10:00AM


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 the economic slowdown in the US and the financial crisis in the Euro zone and the 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-Requisites

ECON-UB 1 (neé C30.0001) Microeconomics


Course Outline


August 17, 2011

Course Outline and Readings



            TP – Pugel, International Economics, 14th ed.

            KW – Krugman and Wells, Macroeconomics, 2nd 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 – September 7

          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.

            Center for Global Development, Rich World Poor World: A Guide to Global Development --

                        Why Global Development Matters for the U.S.

                        Global Trade, Jobs and Labor Standards

                        Global Trade, The U.S. and Developing Countries


Classes 2 - 4 – September 12, 14, 19

            Why do countries trade? 


TP chapters 3 to 6


Classes 5 – 7 – September 21, 26, 28

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 – October 3

            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 5 -- Exam I



Part II – Understanding the Modern Macro economy


Classes 10 - 11 – October 12, 17

          Introduction to macroeconomics and measurement


            KW chapters 6 - 8

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


Classes 12 - 13 – October 19, 24

Growth and the economy in the long run


            KW chapters 9 and 10

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


Classes 14 – 15 - October 26, 31

            Fluctuations in economic activity


            KW chapters 11 and 12

            Krugman Babysitting Parable

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


Class 16  - November 2

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 17-18 – November 8 and 10

            Money and monetary policy


KW chapters 14 to 16


Class 19 – November 14 – Exam II



Part III – International finance and policy 


Class 20 – November 16

          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 21-22  – November 21, 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.


Class 23 – November 28

            Open economy macroeconomics


            TP chapter 22


Class 24 – 25 - November 30, December 5

            Exchange rate regimes and policies


            TP chapter 20 and 25

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


Classes 26 – 27 – December 7, 12

            Financial crisis


            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.


Class 28 – December 14

            Wrap-up: Globalization reconsidered



Final Exam --  Friday, December 23rd, 10:00 to 11:50 AM


Required Course Materials


Thomas Pugel.  International Economics, 14th edition, McGraw-Hill Irwin, 2009.

Paul Krugman and Robin Wells, Macroeconomics, 2nd edition, Worth, 2009

Information about the availablitity of custom editions, ebooks and the usefulness of earlier editions can be found on Blackboard.


Additional readings

Course outline with links to additional readings can be found on Blackboard


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


Assessment Components

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

Exam I                                                  25%

Exam II                                                 25%

Final exam                                           30%

Class participation and assignments       15%



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



Late assignments will either not be accepted or will incur a grade penalty unless due to a valid reason with arrangements made in advance in of the due date. .


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 any assignments or exams 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.


Important Dates

Exam I – Wednesday, October 5th

Exam II – Monday, November 14th

Final Exam – 10:00-11:50AM, Friday, December 23rd


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