London School of Economics

International Political Economy

Week One: Global Economic Outlook

The week will look at the Global Economic Outlook and prospects for global growth in the context of the current crisis. The IMF has characterized the global economy as operating at three speeds. China and emerging economies growing rapidly; the US and a few advanced economies growing modestly, and a large number of advanced economies (particularly in Europe) stagnating with distant prospects for growth. Dealing simultaneously with these three sub-systems will require a complex set of policy measures that have to be carefully coordinated with international measures. In particular, global economic policy coordination has to find answers to problems in the banking and financial services sector. Other major issues include debt reduction strategies and the introduction of growth strategies in stagnating economies. The danger of failing to address these issues could lead to sustained high unemployment, which could be politically destabilizing.

Week Two: Emerging Economies

The second week will look at Emerging Economies and their increasing role in the global scheme of things. In particular, we will be focussing on their growing economic clout – both in terms of growing surpluses and also in terms of their growing commercial influence - and their growing role in international institutions and in global negotiations of various types. This is in sharp contrast with the situation in the past where these countries were dependent on the advanced world for markets, capital, and technology. At the heart of emerging market growth and commercial success is competitiveness, which is generating profits and surpluses on an unprecedented scale. Understanding these processes and developments will provide insights into the way political and institutional developments that are taking place, and the wider implications for the global system.

Week Three: Global Trade and Regional Integration

The final week will look at the Global Trade and Regional Integration with particular reference to its relevance to growth and development. With trade debates dominating the global economic agenda in the 1980s, the belief was that economic recovery from the recession of the 1970s and 1980s could only occur through a massive and coordinated liberalisation of trade and international markets. With the conclusion of the Uruguay Round in 1994, there was indeed a resurgence in international trade, with advance economies benefitting initially and some emerging economies benefitting over time. In the current crisis as well, there has been growing talk of the need for a new global agreement and for greater regional trade integration. The US in particular is pursuing these ideas, but others are hesitant to follow. This week’s sessions will explore the political economy of these and associated issues.