International Political Economy. Department of Political Science, Leiden University - 2011

Course syllabus.
Agustin Mackinlay mackinlaya@fsw.leidenuniv.nl
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Part I. Theoretical Approaches in International Political Economy: An Overview

Session 1. March 31. A brief look at Liberalism, Realism, Marxism. The Connectivity Approach & ‘Complex Interdependence’. New realists.

Assignment. Theoretical Approaches in IPE: Similarities and contrasts (length: 1500 words). Required reading: Goddard & al., chapters 1, 2, 4, 12 and 13.

References. C. Roe Goddard, Patrick Cronin & Kishore C. Dash (eds). International Political Economy, 2nd edition (Palgrave Macmillan, 2003); Thomas M. P. Barnett: The Pentagon’s New Map. War and Peace in the XXIst Century (New York: Putnam, 2004) [blog]; Gideon Rachman. Zero-Sum Future. American Power in an Age of Anxiety (New York: Simon & Schuster, 2011) [blog] [Twitter].
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Part II. Credit Markets & Central Banks: an introduction

Session 2: April 7. An Introduction to credit markets. Credit markets: budget deficits, innovation, inflation expectations.

Assignment. Schumpeter and the 5 cases of innovation (length: 500 words)

Session 3: April 14. Financial crisis and central banks. The fall of Lehman Brothers and “flight-to-quality” episodes. The structure of the Fed and the ECB. Central banks & monetary policy. An introduction to Credit Default Swaps.

Exercise. The credit market.

Session 4: April 21. The Political Economy of credit markets: property rights & the rule of law. Credit markets in less developed countries.

References. Horace W. Brock: “Determinants of interest rates”, in Boris Antl (ed.) Management of Interest Rate Risk (London: Euromoney Publications, 1988); Madeleine O. Hosli. The Euro: A Concise Introduction to European Monetary Integration (Boulder, CO: Lynne Rienner, 2005) [chapter 4]; Raghuram Rajan. Fault Lines. How Hidden Fractures Still Threaten the World Economy (Princeton University Press, 2010) [introduction]; John D. Burger & Francis E. Warnock: “Local Currency Bond Markets”, IMF Staff Papers, Vol. 53, 2006 (especially pp. 141-142); Hernando de Soto. The Mystery of Capital (New York: Basic Books, 2000). Plus selected passages from Montesquieu and Adam Smith and other documents.
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Part III. The Political Economy of China’s Economic Development Strategy & the Global Financial Crisis

Session 5. May 12. China, the U.S. & Bretton Woods II. International reserve currencies. Another look at the 2008 financial crisis.

Assignment. China’s economic development strategy and the global financial crisis (length: 500 or 1500 words). Required reading: Dooley, Folkerts-Landau & Garber (2003). Madeleine O. Hosli (chapter 6).

References. Michael P. Dooley, David Folkerts-Landau & Peter Garber: “An Essay on the Revived Bretton Woods System”, NBER Working Paper 9971 (2003); Madeleine O. Hosli. The Euro: A Concise Introduction to European Monetary Integration (Boulder, CO: Lynne Rienner, 2005) [chapter 6]; Robert Mundell: “The Euro: How Important”, Cato Journal, Vol. 18, No. 3 (1999); Charles G. Leathers & J. Patrick Raines: “The Schumpeterian role of financial innovations in the New Economy's business cycle”, Cambridge Journal of Economics, 2004 28 (5): 667-681.
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Part IV. Financial Diplomacy

Session 6. May 16. Central banks and financial diplomacy: the Political Economy of central bank currency swaps: soft-power, soft-balancing. The G2, the G8 and the G20: Towards a new international monetary order? Crisis inside the eurozone.

Two Assignments. Recent developments in financial diplomacy (length: 500 or 1500 words). Required readings: Bayne (2008).

References. Nicholas Bayne: “Financial Diplomacy and the Credit Crunch: The Rise of Central Banks”, Journal of International Affairs, Fall / Winter 2008, Vol. 62, No. 1, pp. 1-16; Francis J. Gavin. Gold, Dollars, & Power. The Politics of International Monetary Relations 1958-1971 (The University of Carolina Press, 2004). Joseph Nye. The Future of Power (Public Affairs, 2011) [website] [video].
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Grades for this course are calculated on the basis of two 1500-word assignments (20% each), three 500-word assignments and one exercise (12.5% each), and class participation (10%).