HU Credits: 5

Degree/Cycle: 1st degree (Bachelor)

Responsible Department: International Relations

Semester: 1st Semester

Teaching Languages: Hebrew

Campus: Mt. Scopus

Course/Module Coordinator: Lior Herman

Coordinator Email: lior.herman@mail.huji.ac.il

Coordinator Office Hours: Monday 14:30-16:00

Teaching Staff:
Dr. Lior Herman,
Ms. Rom Bercu,
Ms. Hilla Avni,
Ms. Roni Berkowitz,
Mr. Avraham Swissa,
Mr. Tal Ben Avner,
Ms. Tal Aizner

Course/Module description:
** Full description of the course can be found in the syllabus available on Moodle **
This course has been designed and tailored for International Relations students and is not an economics introductory course for economists. For this reason, the course does not make use of mathematics, econometrics and complex modeling analysis. An attempt to simplify technical economic concepts was made, with an emphasis on providing and acquiring students with an understanding of economic thinking. Nevertheless, since the course focuses on the fundamentals of the economics, teaching will include from time to time elementary mathematics and graphs alongside various examples. While many issues in the fields of micro-economics and macro-economics taught in the course, overlap with other introductory to economics modules, many issues which are of lesser importance to IR students were removed from the course. At the same time, the course includes a large number of topics that are not covered by introductory economics courses, related to issues such as connections between politics and economics, as well as diversity of economic thought.
Analytically, the course is divided into issues of micro and macro-economics. In the beginning, the course engages with concepts and basic questions of economics and underlying economic reasoning and calculus. Following, the basic market model is developed with reference to factors of production, supply and demand in the closed and open international trade, as well as the lack of competition, government intervention and political influences. The course examines classical and neo-classical economic thought with Marxist and other critic, and further elaborates on issues such as, marginal calculus concepts, market failures, as well as public products and externalities. The second part of the course focus on macro-economic issues, such as national accounts, the money market, banking and monetary management, foreign exchange markets, international trade and balance of payments, Keynesianism and financial and economic crises. Pending on time availability, other issues linking economics and politics will be taught, including gender, poverty and development and the welfare state.
The course includes lessons and exercises.

Course/Module aims:
The aim of the course is to provide students of international relations (and others interested) fundamentals and basic concepts in economics, as well as broad and critical understanding of economic perceptions of various political and social issues at domestic and international levels. On the one hand, this introductory course is intended to open a window to political economy, which is the among the most important study fields of international relations and political science. On the other hand, it is designed to enable those wishing, to further pursue advanced courses in the fields upon its successful completion.
Please note, that the most updated (and binding) version of this syllabus is posted on the course Moodle website.

Learning outcomes - On successful completion of this module, students should be able to:
See course aims and description

Attendance requirements(%):
Participation in classes and exercises is compulsory

Teaching arrangement and method of instruction: Class
Exercise
Refer also to the full syllabus on the Moodle Website for further details

Course/Module Content:
Topic 1: Introduction: What is Political Economy? and what is International Political Economy?
Topic 2: The Economic Problem: the scarcity principle, choice, opportunity cost.
Topic 3: Factors of production, the law of diminishing marginal productivity, division of labor, specialization and exchange, absolute and comparative advantage, Ricardo international trade model, the Hecksher-Ohlin-Samuelson (HOS) model, the World Trade Organization (and regionalism), the politics of trade policy (state-centric approach vs. society-centric approach).
Topic 4: Supply and demand in a closed economy, elasticity, product types (normal, neutral, inferior, and luxury), cross-markets effects (for example, substitutes and complementary products).
Topic 5: Supply and demand in an open economy, changes in demand and supply and their domestic and global effects, government intervention in an open economy, import and export, customs and quotas, subsidies, purchase tax, arguments for and against protectionism.
Topic 6: Lack of free competition in the domestic and global market: monopoly, oligopoly, cartel, monopsony, and domestic/international competition policy.
Topic 7: Classical economic approach and the relationship between state, market and civil society
Topic 8: Marxist criticism: interests, market functioning, the self-destruction of capitalism, the political significance of class consciousness, class struggle, imperialism, modern Marxism streams.
Topic 9: Neoclassical approach: key concepts (rational, utility, marginal calculation, Pareto-optimum), public goods, political economy and market failures, externalities.
Topic 10: Further criticism of the market model (Veblen, and Galbraith called Polanyi) and their applications.
Topic 11: From micro to macro-economics (differences, issues), economic indicators (e.g. CPI), National Accounts (GDP, GNP, private consumption, government savings and investment sources and uses).
Topic 12: Keynesian criticism, business cycles, unemployment, inflation, the role of government in the economy.
Topic 13: Economic Growth
Topic 14: International trade and balance of payments: commercial account, current account, capital account, external debt, foreign currency reserves.
Topic 15: Money markets, interest rates, the banking system
Topic 16: Foreign exchange markets: demand and supply of foreign currency, and the motivation behind them, importers and exporters, speculation and insurance.
Topic 17: Financial and economic crises
Topic 18: Various topics: if time and teaching progress allows a number of other issues will be integrated, such as poverty, economic development, gender, the variety of capitalism and the welfare state. Specific reading list will be given provided accordingly.

Required Reading:
Most introductory books dealing with the fundamentals of the economy are designed to serve students of economics and related subjects (accounting, business administration). These books make use of technical and mathematical tools and by and large are less accessible to those who are not students of these fields. For this reason, there are no introductory textbooks tailored for non-economic students available.
Recognizing this problem, the reading list attempts to partially solve this problem, dividing the reading list into compulsory and optional readings.
1. Compulsory Literature – compulsory reading is focused on non-technical and non-formal aspects, linking theory with empirics. This literature does not substitute lectures’ material and in many cases complement it, highlighting additional aspects and providing a platform for discussion and application of course content, with an emphasis on connecting the political dimension of economic issues. Students’ knowledge and understanding of this literature will examined at the final exam, even if not discussed in class.
2. Optional Literature – option literature is recommended, and covers technical aspects of the course. Reading was chosen from three introductory textbooks existing Hebrew (for the sake of simplification). Reading this literature can be useful particularly after material was taught in class, and is also recommended for those wishing to deepen their understanding beyond course material. It is also recommended to focus the reading on understanding concepts and rules, rather than technical details (unless otherwise explained in class). The three books that accompany the introductory course are:
א. האוניברסיטה הפתוחה:
• יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 1,2,3. תל אביב, האוניברסיטה הפתוחה.
• יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 4,5,6. תל אביב, האוניברסיטה הפתוחה.
ב. אורון, מארק ועופר:
• אורון, י., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי.
• אורון, י., נ. מארק, et al. (2006). מבוא לכלכלה: מאקרו כלכלה. תל אביב, עמיחי.
ג. מישר:
• מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור.

מפתח לרשימת הקריאה:
קריאות חובה מודגשות בשחור ומסומנות בכוכבית
קריאות רשות מסומנות בכתב רגיל.

קריאת חובה לקורס:

סואל, ת. (התשס"ז). יסודות הכלכלה: מדריך לאזרח. ירושלים, הוצאת שלם, פרק א', עמ' 1-5.
Homer-Dixon, T. F, (1999). Environment, Scarcity and Violence, New Jersey: Princeton University Press, Ch. 2-3, pp. 12-46.
Oatley, T. (2012). International Political Economy: Interests and Institutions in the Global Economy. New York, Pearson, Ch. 4-5, pp. 69-110.
Rogowski, R. (1989). Commerce and Coalitions: How Trade Affects Domestic Political Alignments. In J. A. Frieden and D. A. Lake (2009). International Political Economy: Perspectives on Global Power and Wealth. New York and London: Norton, pp. 365-375.
Eichengreen, B. J. (2010). The Political Economy of the Smoot-Hawley Tariff. In J. A. Frieden and D. A. Lake (2009). International Political Economy: Perspectives on Global Power and Wealth. New York and London: Norton, pp. 42-52.
Pollock, R. (2008). Is Google the Next Microsoft? Competition, Welfare and Regulation in Internet Search, MPRA Paper No. 10369, http://mpra.ub.uni-muenchen.de/10369/2/search_engines.pdf [אין חובה לקרוא את סעיפים 4.2 עד 8 (לא כולל)]
פרידמן, מ. (תשס"ב). קפיטליזם וחירות. ירושלים, הוצאת שלם, עמ' 9-36.
מרקס, ק. ואנגלס, פ. המניפסט הקומוניסטי, בתוך קרן, מ. (עורך).(2001) . תולדות המחשבה המדינית, כרך ב': העידן המודרני. תל אביב, האוניברסיטה הפתוחה, עמ' 3-37.
Morrow, J.D. (1994). Game Theory for Political Scientists, Princeton: Princeton University Press, pp. 16-22.
Polanyi, K. (2001). The Great Transformation: The Political and Economic Origins of our Time. Boston, MA, Beacon Press, Ch,. 10.
קיינס, ג'ון מ. (תשס"ז). התאוריה הכללית של תעסוקה, ריבית וכסף, ירושלים: מאגנס האוניברסיטה העברית, הקדמה ופרק 24.
Hayek vs. Keynes clips:
• Round I: http://www.youtube.co/mwatch?v&eq;d0nERTFo-Sk
• Round II: http://www.youtube.com/watch?v&eq;GTQnarzmTOc&playnext&eq;1&list&eq;PL406A7E653806060A&feature&eq;results_video
• Round II Q&A: http://www.youtube.com/watch?v&eq;5NIyCJC9ehQ&playnext&eq;1&list&eq;PL406A7E653806060A&feature&eq;results_video
גבאי, י. (2009). כלכלה פוליטית: בין מראית עין כלכלית למציאות כלכלית. תל אביב, הוצאת הקיבוץ המאוחד, פרק 6, עמ' 169-233.
Shaviro, D. (1997). Do Deficits Matter?, University of Chicago Press, 1997, Ch.2, pp. 13-27.
Grossman, R.S. (2010). Unsettled Account: The Evolution of Banking in the Industrialized World since 1800, Princeton University Press, Ch.1 (only 1-13), Ch.2 (pp. 28-52).
Stiglitz, J.A. (2010). Free Fall: America, Free Markets, and the Sinking of the World Economy, New York and London: Norton, Chs. 1-2, pp. 1-57

Additional Reading Material:
יצחק., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרק 4, עמ' 67-78
Raiklin, E. and B. Uyar (1996). "On the Relativity of the Concepts of Needs, Wants, Scarcity and Opportunity Cost." International Journal of Social Economics 23 (7): 49-56.

יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 1,2,3. תל אביב, האוניברסיטה הפתוחה, יחידה 1, עמ' .1-26
יצחק., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרק 1, עמ' 11-43.
Bohlen, Celestine. (1992). “Arms Factory Can Make Bricks, But, Russia Asks, Is That Smart?”, New York Times, February 24, http://www.nytimes.com/1992/02/24/world/arms-factory-can-make-bricks-but-russia-asks-is-that-smart.html?pagewanted&eq;print&src&eq;pm
יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 1,2,3. תל אביב, האוניברסיטה הפתוחה, יחידה 2, עמ' 1-8.
יצחק., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרקים 1-3, עמ' 11-65.
יצחק ., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרקים 14 ,8-11, עמ' 225-234 ,105-199.
יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 4,5,6. תל אביב, האוניברסיטה הפתוחה, יחידות 4/5, עמ' 36-55.
יצחק., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרק 15, עמ' 235-285.
Olienyk, J. and J. Carbaugh Robert (2011). "Boeing and Airbus: Duopoly in Jeopardy?" Global Economy Journal 11(1).

יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 4,5,6. תל אביב, האוניברסיטה הפתוחה, יחידה 6, עמ' 1-34.
יצחק., א., נ. מארק, et al. (1995). מבוא לכלכלה: מיקרו כלכלה. תל אביב, עמיחי, פרק 17, עמ' 301-326.
Caporaso, J. A. and D. P. Levine (1992). Theories of Political Economy. New York, Cambridge University Press, pp. 33-54
Caporaso, J. A. and D. P. Levine (1992). Theories of Political Economy. New York, Cambridge University Press, pp. 55-78.
יניב, ג. (1982). מבוא לכלכלה - מיקרו: יחידות 1,2,3. תל אביב, האוניברסיטה הפתוחה, יחידה 2, עמ' 27-32.
Caporaso, J. A. and D. P. Levine (1992). Theories of Political Economy. New York, Cambridge University Press, pp. 79-99.
אורון, י., נ. מארק, et al. (2006). מבוא לכלכלה: מאקרו כלכלה. תל אביב, עמיחי, פרק 2, עמ' 23-84.
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור., עמ' 13-77.
אורון, י., נ. מארק, et al. (2006). מבוא לכלכלה: מאקרו כלכלה. תל אביב, עמיחי, פרק 17, עמ' 343-360.
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור., עמ' 459-499.
Caporaso, J. A. and D. P. Levine (1992). Theories of Political Economy. New York, Cambridge University Press, pp. 100-125.
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור, עמ' 133-193.
אורון, י., נ. מארק, et al. (2006). מבוא לכלכלה: מאקרו כלכלה. תל אביב, עמיחי, פרק 2, עמ' 23-84.
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור, עמ' 269-317.
אורון, י., נ. מארק, et al. (2006). מבוא לכלכלה: מאקרו כלכלה. תל אביב, עמיחי, פרקים 9-12, עמ' 193-251.
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור., עמ' 319-398
מישר, י. (תשס"ט). המקרו-כלכלה של ישראל. חיפה, פרדס הוצאה לאור., עמ' 399-457.
Cooper, H. (2008). The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy, Petersfield: Vintage

Course/Module evaluation:
End of year written/oral examination 85 %
Presentation 0 %
Participation in Tutorials 0 %
Project work 0 %
Assignments 0 %
Reports 0 %
Research project 0 %
Quizzes 15 %
Other 0 %

Additional information:
Please note, that the most updated (and binding) version of this syllabus is posted on the course Moodle website.