Project description:
International Political Economy: An introductory course designed to help Interdisciplinary Students Gain Numeracy in the Application of Economic Theory
Numeracy Goals
Reflexively employing general equilibrium theory with the assistance of hydrodynamic images
Using economic measurements with an awareness of their uses and limitations
Learning to put measurements into context to gain perspective on what is big and what is small
Consider how economic measures are used
· To test theory
· To state policy objectives
· To gauge policy effectiveness
What is different about this course?
Most economic courses begin with the idea that perfect competition creates uniform prices. Students learn this abstract model and then gradually modify the underlying assumptions to consider how the real world deviates from the model. This class starts with the messiness of the real world and asks why doesn’t the one-price rule dominate economic behavior if there profits to be made in buying low and selling high. The result is that students must first confront the idea of barriers to trade before they progress to the more general tendency for prices to move in the same direction.
What creates a barrier to trade?
Are all barriers natural? When do states and firms deliberately create or exploit barriers?
Can we measure barriers to trade?
How do firms, individuals and middlemen avoid barriers?
TYPES OF PHENOMENA TO BE EXPLAINED
Why aren’t different supermarket prices the same?
Why don’t Supermarkets lose money on sales?
Why do children go to movies half price?
Why do part-time faculty earn 50% of full-time faculty salaries?
Why do women earn less than men?
Why do prices differ in different countries.
Why don’t low wage countries have all the work?
When is an exchange rate overvalued?
Why don’t low wage workers find higher paying jobs?
Why aren’t all countries rich?
What economic theory will help students understand these issues?
*when people can, they usually buy low and sell hi, putting in motion the forces behind the one price law
*the comparative advantage theory of trade,
the purchasing power parity theory of exchange rates,
the present value theory of asset valuation,
the utility maximization theory of consumer behavior,
the factor price equalization theory of production
are all variations of the one price law.
*barriers to trade obstruct the one price law
*average and marginal costs matter
*price searchers depend upon barriers to trade
*competition creates economic efficiency
*economic efficiency is not universally desired
*trade is always a manifestation of the one-price law even when it fails to produce a common price
*price and other market controls prevent efficiency
*price and other market controls seldom control all economic flows