International Political Economy

Department of Political Science
Leiden University
2010

Course syllabus
Agustin Mackinlay
mackinlaya@fsw.leidenuniv.nl

Part I
Theoretical Approaches in International Political Economy: An Overview
. Session 1. April 1
Assignment. Theoretical Approaches in IPE: Similarities and contrasts (length: 1500 words). Required reading: Goddard & al., chapters 1,2, 12, 13 and 14.
References. C. Roe Goddard, Patrick Cronin & Kishore C. Dash (eds). International Political Economy, 2nd edition (Palgrave Macmillan, 2003).
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Part II
Credit Markets & Central Banks: an introduction
. Session 1: April 1. An Introduction to credit markets.
. Session 2: April 8. Credit markets: budget deficits, innovation, inflation expectations, demographics.
Assignment. Schumpeter and the 5 cases of innovation (length: 500 words)
. Session 3: April 15. Credit markets: property rights & the rule of law; flight-to-quality episodes; Islamic finance.
Exercise. The credit market.
- Session 4: April 22. Central banks: the structure of the Fed and the ECB. Central banks & monetary policy.

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]; John D. Burger & Francis E. Warnock: “Local Currency Bond Markets”, IMF Staff Papers, Vol. 53, 2006 (especially pp. 141-142); Philip Keefer: “Beyond legal origin and checks and balances: Political credibility, citizen information and financial sector development”, in Stephen Haber, Douglass C. North & Barry Weingast (eds). Political Institutions and Financial Development (Stanford University Press, 2008). Plus selected passages of Montesquieu and Adam Smith.
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Part III

The Political Economy of China’s Economic Development Strategy & the Global Financial Crisis
. Session 5. April 29. China, the U.S. & Bretton Woods II. International reserve currencies. The global financial crisis of 2007-2009.
Assignment. China’s 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 6. The G2, the G8 and the G20: Towards a new international monetary order? The IMF. Soft-balancing: Charles de Gaulle and the ‘deconstruction’ of the dollar.
. Session 7. May 20. Financial Diplomacy & central bank coordination: monetary policy, currency swaps. The euro and the Greek crisis.
Assignment. 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).

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Part V

The Connectivity Approach to International Political Economy
. Session 8. [date to be determined].
Assignment. The Connectivity Approach & ‘Complex Interdependence’ (length: 500 or 1500 words). Required reading: Thomas M.P. Barnett. The Pentagon’s New Map [selected pages]; Goddard & al., chapter 4.

References. Thomas M. P. Barnett: The Pentagon’s New Map. War and Peace in the XXIst Century (New York: Putnam, 2004). Robert O. Keohane & Joseph S. Nye: “Realism and Complex Interdependence”, in C. Roe Goddard, Patrick Cronin & Kishore C. Dash (eds). International Political Economy, 2nd edition. Palgrave Macmillan (2003), chapter 4.

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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%).