International Economic Institutions: Globalism vs. Nationalism
Dr. Ramon P. DeGennaro is the CBA Professor in Banking and Finance at The University of Tennessee, Knoxville. In addition, he consults in the areas of business valuation, investments, and financial management and is a Luminary Member of the Angel Capital Group. He also served as a Visiting Scholar at the Federal Reserve Banks of Cleveland and Atlanta and for the American Institute for Economic Research. Professor DeGennaro holds a Ph.D. in Finance from The Ohio State University. At The University of Tennessee, Professor DeGennaro has been nominated for the Allen H. Keally Outstanding Teacher Award, the John B. Ross Outstanding Teaching Award (three times), and the College of Business Outstanding Teaching Award. Professor DeGennaro has presented original research at dozens of professional conferences, and he is the recipient of more than 50 research and professional development grants. His current research involves investments, financial markets, and entrepreneurship. He has published more than 40 refereed articles on investments, financial market volatility, small-firm finance, the term structure of interest rates, financial institutions, and prediction markets. He also has written research reports, book chapters, book reviews, and several Federal Reserve publications.
01: The Politics of Economic Institutions
Begin your survey of international economic institutions by seeking the reasons that some societies prosper while others fail. Explore different examples from the past and present, asking: What role do institutions play in economic prosperity? Which practices and policies promote growth? Which hinder it?
02: Financial Regulation across Borders
Survey three types of institutions involved in international financial regulation: organizations such as the World Bank; state-to-state contact groups such as the G-20 (which is comprised of leaders from the world's twenty major economies); and trans-governmental networks like the Basel Committee on Banking Supervision. When are they most effective? When not?
03: International Anarchy under One Roof
International institutions are one way to manage rapid technological change and globalization. At their best, they can make the inherently anarchic nature of international politics run more smoothly. In this lecture, consider the many barriers such institutions face to accomplishing even a partial level of success....
04: Messy Multilateralism
Joining an international institution almost always involves some loss of sovereignty for the new member. So why do nations do it? Also, why do institutions allow themselves to grow in membership to the point that it becomes difficult to function? Examine these paradoxes as they play out in groups such as the European Union and World Trade Organization.
05: The Fed and the Roles of Central Banks
Study the role of central banks, focusing on the First Bank of the United States, championed by Alexander Hamilton, the Second Bank of the United States, rejected by President Andrew Jackson, and the evolution of the Federal Reserve System, established in the wake of bank panics around the turn of the 20th century.
06: The Pre-World War II Rise of Big Government
The rise of international economic institutions appears to be linked to the growth of big government. Explore the features of two prominent political systems: totalitarianism and democracy. Discover the reasons that supranational organizations appeal to each. Then look at the trend toward inflexibility in complex societies and the risk this poses for societal collapse.
07: Interest Groups, the State, and Corporatism
Around the world, nations have adopted big government and command economies to varying degrees, and countries have organized themselves in different ways. Focus on the fundamental features of capitalism, communism, and corporatism-the last involving political control by large interest groups.
08: The World Bank, Poverty, and Violence
Established at the end of World War II, the World Bank has achieved mixed results in its mission to reduce poverty in the developing world. Consider the difficulty of promoting growth in countries plagued by corruption, frequent regime change, and violence. In this light, explore the bank's recent change in strategy.
09: Group Choices: Rock, Paper, Scissors
Examine the steps needed to reach an agreement between an organization and a client nation, along with the incentives that smooth the way toward compliance. As a surprising but instructive example, look at a vote taken by the men of the Lewis and Clark expedition in 1805 and see how the voting rules and time of the vote affect outcomes.
10: The United Nations: A League of Its Own
Chartered in 1946, the United Nations rose from the ashes of its failed predecessor, the League of Nations. Trace the evolving mission of the UN, its financing, growing membership, and the division between the General Assembly and Security Council. Weigh the strengths and weaknesses of this quintessential supranational group....
11: Exchange Rates and the Gold Standard
Start a series of lectures that analyze the turmoil in international economic relations that led to the Great Depression and its aftermath. Here, focus on the function of the gold standard in stabilizing exchange rates, how this system began to break down after World War I, and the role of gold in the ensuing deflation crisis.
12: What Caused the Great Depression?
The Great Depression is the mother of many of today's international economic institutions. Comparable to a major war in its impact, this protracted era of suffering still eludes definitive explanation. Examine the events that helped trigger the Depression and the litany of policy mistakes that turned a bad situation into a catastrophe.
13: "Higgledy Piggledy": F. D. R.'s Stimulus Plan
One popular school of thought credits President Franklin D. Roosevelt's New Deal with putting the U.S. on the road to recovery during the Great Depression. But did it help or hinder recovery? Dig into Roosevelt's spending programs and his policies in areas such as anti-trust enforcement. Follow the economy through World War II and after.
14: The Bank for International Settlements
Founded in 1930, the Bank for International Settlements is the world's oldest international financial organization, established to help central banks coordinate monetary and financial stability. Chart its controversial history, starting with the bank's earliest mission to facilitate Germany's payment of war reparations after World War I.
15: Intrigue at Bretton Woods: July 1944
Learn how the post-World War II economic order was negotiated in 1944 at Bretton Woods, New Hampshire. This international monetary and financial conference had all the elements of a political thriller: a desperate debtor (Great Britain), a cocky creditor (the United States), allegations of espionage, and last-minute deals-all against a backdrop of world war.
16: The International Monetary Fund
Membership in the International Monetary Fund has grown many-fold since the IMF was established in 1945. Study the operations of this influential body, which was designed to deal with a very different economic and political climate than exists today. See how its original mission to lend to countries with balance-of-payments problems has broadened, with mixed success.
17: The Asian Development Bank
Modeled on the World Bank, the Asian Development Bank is a consortium of mostly Asian countries established in 1966 and dedicated to fighting poverty in Asia and the Pacific. Go behind the scenes to see how political deal-making between nations works in such organizations, where loans often come with tacit strings attached.
18: The World Trade Organization
Established in 1995, the World Trade Organization formalized the post-World War II drive to reduce tariffs and promote freer trade. Analyze the advantages of free trade and the reasons many countries resist it. Look at regional trading agreements, which are a partial step toward free trade but with drawbacks. Close by charting the WTO's possible future.
19: The Euro
Probe the problems of the euro, the common currency of the 19 countries in the Eurozone. Focus on Greece as an example of the downside of surrendering the flexibility to adjust interest rates within one's own borders. Investigate the economic and political preconditions that underlie success for a common currency, comparing the Eurozone to the 50 states of the U.S.
20: The Great Recession: Mismanaging Risk
Watch as financial institutions take tried-and-tested tools-mortgages and derivatives-and, prodded by government policy, push them beyond the bounds of prudent risk-taking, sparking the greatest recession since World War II. Identify other contributing factors to the Great Recession, which started in late 2007. Ask why major institutions failed so spectacularly.
21: After the Recession: A Bigger House of Cards
Did the measures taken to speed recovery from the Great Recession help or hurt? What about new regulations passed to prevent similar crises in the future? Evaluate the track record of these steps and other hands-on approaches. One proposal is for a new international institution to enforce financial standards for multinational firms. Would that work?
22: Banking Supervision and the Basel Accords
Banks are supervised through a voluntary set of international rules known as the Basel Accords, which have been updated twice. In light of the inevitability of revisions to regulations, study a phenomenon called regulatory dialectic, which describes an endless cycle-from interest group demands, to government actions, to industry adaptation and exploitation of loopholes, and back to the beginning.
23: A Unified Europe, and Then Brexit
Underway since the end of World War II, European unification has progressed from the European Coal and Steel Community to today's expansive European Union, including the Eurozone monetary union. Explore the distinct advantages of unification, along with the drawbacks that led the UK to vote in 2016 to leave the EU in a step known as Brexit.
24: The G-Zero Era of Instability
The "G" groups are informal blocs of countries that meet to decide economic issues of their mutual interest. Focus on the Groups of Seven and Twenty, comprised of the world's major economies. Consider whether we are now in an era of "G-Zero," when no single nation has enough power to take the lead. What might this mean for global economic stability?