Econ 270 : Current Economic Issues

                                                                      Fall 2006

Professor Robert Whaples

124 Carswell Hall

336-758-4916

whaples@wfu.edu

Objective: Our goal is to examine some of the most important and controversial issues in the American economy today.   We’ll seek to understand the forces underlying these economic dilemmas and to use economic theory along with empirical and historical evidence to formulate public policies which may help solve them.   (Often we will admit that there is no perfect solution and that solutions cannot be separated from normative beliefs.)   The goal is to make us all informed observers and to practice applying economic tools.

Grades and Assignments for 1.5 Credit Hour Option:

1. 9 Short Papers (SP), responding to shorter class readings (15%).

2. 2 Medium-Length Papers (MP): each analyzing the arguments/evidence of one of the books in 3-4 pages (30%).

3. Long Paper and Presentation: A paper (about 12 pages) recommending a course of action on some economic policy question.   The paper will form the basis of a class discussion.   See below. (30%)

4. Quiz on The Travels of a T-Shirt (10%)

5. Class Participation – including attendance and news quizzes (15%).

Grades and Assignments for 3 Credit Hour Option:

1. 24 Short Papers (SP), responding to shorter class readings (20%)

2. 4 Medium-Length Papers (MP): each analyzing the arguments/evidence of one of the books in 3-4 pages (40%).

3. Long Paper and Presentation: A paper (about 12-15 pages) recommending a course of action on some economic policy question.   The paper will form the basis of a class discussion.   See below. (22.5%)

4. Quiz on The Travels of a T-Shirt (5%)

5. Class Participation – including attendance and news quizzes (12.5%).

All assignments are due at class time.   If you cannot make it to class, email me a copy before the beginning of class – otherwise late penalties will apply.  All assignments should be double-spaced in 12-point font.

All students should subscribe to the Wall Street Journal, as recent economic news will be integrated into our discussion and papers – and will be the topic of news quizzes.

August 23 and 25: How Markets Work, but Sometimes Fail

Robert Whaples, “Economists’ Voices: Where Is There Consensus on Policy Debates?”  SP1

August 28: The Current Macroeconomic Situation

SP2 (double weight)

August 30: What Will the Future Bring?

Robert Whaples, “Economists’ Voices: Economic Challenges and the Future of Humanity.” SP3

September 1 and 4: Wal-Mart

Jerry Hausman and Ephraim Leibtag, “Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart,” NBER Working Paper 11809. SP4

September 6 to 11: Higher Education

Richard Vedder, Going Broke by Degree: Why College Costs Too Much MP1

September 13 and 20: Terrorism and the Iraq War

Alan Krueger and Jitka Malackova, “Education, Poverty and Terrorism: Is There a Causal Connection?” Journal of Economic Perspectives. SP5

Scott Walsten and Katrina Kosec, “The Economic Cost of the War in Iraq,” AEI-Brookings Joint Center Working Paper.

Steven Davis, Kevin Murphy and Robert Topel, “War in Iraq versus Containment.” SP6

(No class September 15: Economic History Association meetings)

September 22 to 29: Economy, Society and Well Being

David Blanchflower and Andrew Oswald, “Well-Being over Time in Britain and the USA,” NBER Working Paper 7487. SP7

Joel Schwartz, “The Socio-Economic Benefits of Marriage: A Review of Recent Evidence from the United States,” Economic Affairs.   SP8

Robert Frank, Luxury Fever: Why Money Fails to Satisfy In an Era of Excess MP2

October 2: Papers by Former Econ 270 Students

SP9

October 4 and 6: Global Trade

Pietra Rivoli, The Travels of a T-shirt in the Global Economy: An Economist Examines the Markets, Power and Politics of World Trade. Quiz

October 9: Guest lecture by Michelle New, National Association of State Energy Officials

Last regular day for students taking the course for 1.5 credit hours to attend.

October 11: Obesity

David Cutler, Edward Glaeser and Jesse Shapiro, “Why Have Americans Become More Obese?” Journal of Economic Perspectives, Summer 2003.

October 13: Fall Break

October 16 to 20: Social Security and Medicare

Laurence Kotlikoff and Scott Burns, The Coming Generational Storm: What You Need to Know about America 's Economic Future. MP3

October 23 and 25: Global Environmental Change

Bjorn Lomborg, “Global Warming,” from The Skeptical Environmentalist: Measuring the Real State of the World. SP11

William Nordhaus, “The Economics of Hurricanes in the United States,” SP12

Long papers due for those taking the course for 1.5 credit hours – October 24 at noon.

October 27 to November 1: Baseball

Andrew Zimbalist, May the Best Team Win: Baseball Economics and Public Policy. MP4

November 3 to December 1 and December 5 at 9AM:

Presentations of student papers, beginning with those taking the class for 1.5 credit hours.  

SP13-24

Long papers due for those taking the course for 3 credit hours – November 9 at noon

Econ 270

Long Paper

For 1.5 Credit Hours                                                                            For 3 Credit Hours

Length: About 12 pages                                                                        Length: About 12-15 pages

Due: October 24 at noon                                                                      Due: November 9 at noon

Assignment: Recommend a course of action on some public policy question, after a careful examination of the theoretical and empirical issues.

1. Structure of the Paper:

a. Identify the problem- give data and explain theoretically (e.g., use economic graphs).   Make sure to discuss issues of market failure, government failure and fairness.

b. Survey solutions which others have proposed, explaining their strengths and weaknesses.

c. Propose your own solution, explaining why it is better than the alternatives.   Show some originality.   Be explicit about the normative assumptions you are making.   Be explicit about the trade-offs (e.g. short-run vs. long-run, efficiency vs. equity, winners vs. losers) that are involved.

2. Sources:

a. Consult scholarly journals (such as the Journal of Economic Perspectives) and books.  

b. Search the EconLit data base.

c. Use the business press (e.g. the Wall Street Journal or the Economist) for up-to-date information.

d. Only after consulting these sources should you search for sources on the internet. Avoid low-quality internet sources that don’t include documentation for their points.

e. The best internet sources are scholarly working papers and “think tank” papers from policy organizations like the American Enterprise Institute, the Brookings Institution, the Cato Institute, the Economic Policy Institute, the Institute for International Economics, the Milken Institute, the National Bureau of Economic Research, the National Center for Policy Analysis, Resources for the Future, and the Urban Institute.

3. Citations and notes.   Include short citations within the text (e.g. Smith, 1997, p. 105) and full citations at the end of the paper backing up any theoretical arguments or empirical evidence.   Turn in a photocopy or supply a URL for all citations.   (I.E., when I read your paper, I need to have at my disposal all empirical evidence that you cite.)

4. You may not pick a topic which we will otherwise be discussing in class.

5. Title: What Should We Do about __________________________?

6. Turn in a paper copy of your paper and email a copy to everyone in the class.

Discussion

1. Class members will read one of the papers presented during each session and turn in a 150-word overview and assessment of the paper, identifying any empirical or theoretical shortcomings.

2. You will lead a class discussion focused on the paper.   The discussion will last about 25 minutes. In the first five or ten minutes you should summarize the paper.   Be prepared for questions.

Possible Topics – unless we’re discussing them in detail in class

• Labor Market Issues (e.g., affirmative action, length of the workweek, use of temporary workers, pension plans, unemployment insurance, unions, occupational licensing)
• Education Policies (e.g., school-to-work transition, reducing class sizes, Head Start, high school drop outs, grade inflation, school vouchers)
• Regulation/Deregulation and Industry studies (e.g., telecommunications, transportation, banking, energy, Amtrak, electric power grid, funeral industry, real estate fees, antitrust policy, postal competition, sports policies and subsidies)
• Health Issues (e.g., insurance coverage, infant mortality, pharmaceutical prices, vaccination programs, drug prescription insurance, over-worked interns, food irradiation, asbestos law suits, dangers from SUVs, genetically modified foods, drug re-importation, tobacco, organ donations, flu pandemic). Health policy is very complicated so make sure your topic is fairly narrow.
• Environmental Issues (e.g., electric/hybrid cars, deforestation, logging policies, wetlands policy, landfills, grazing policies, forest fires, species loss/biodiversity, drought/water shortages, West Nile virus, bird flu, acid rain, alternative energy sources, the ivory trade, asbestos law suits, biotech crops, DDT, over fishing, whaling, recreation fees at National Parks, landfills/trash, FEMA, natural disasters, dealing with catastrophes – e.g. meteor impacts, renewable energy, air/water pollution, recycling, CAFE standards, ethanol, drilling in ANWR)
• Agricultural Policies (e.g. family farms, milk pricing policies, crop subsidies, crop insurance, mad cow disease, farming methods and the environment)
• Urban Issues (e.g., revitalizing inner cities, urban sprawl, zoning laws/eminent domain abuse, competition for corporate investment – e.g. Winston-Salem’s recent Dell deal)
• Technology Policies (e.g., internet policies, spam, NASA/space station)
• Economics of Infrastructure (highways, highway safety, traffic congestion, speed limits, airports, airport security, mass transit/light rail)
• Corporate Issues (e.g., takeovers, mergers, high executive pay, corporate governance, corporate fraud, stock options, Fannie Mae)
• Taxation Policies (e.g., capital gains, inheritance/estate tax, taxation of dividends, tax breaks for saving/retirement, “sin” taxes, flat tax, luxury taxes, consumption taxes)
• Energy Policy (e.g. nuclear power, alternative power, wind power, power grid regulation, ethanol, high price of oil/gas/natural gas)
• Trade Policies (WTO, trade with China, CAFTA, free trade with poor countries, protection of declining industries, sweatshops, outsourcing, child labor, anti-dumping laws, tariffs on specific goods – e.g. textiles, steel, cement)
• International/Security Issues (terrorism, using markets to predict international events – e.g. “terrorism futures markets,” terrorism insurance, third world debt, Iraqi policy, military pay/conscription)
• Family Issues (fatherless families, marriage tax penalty, high divorce rate, day care, low fertility rates, infant adoptions, welfare)
• Politics and Economics (e.g. campaign finance, media bias, biases in official government statistics)