Academic management

The subject “World Economy” (Bussiness Administration Degree -module: "Economic Environment", matter: "Firms economic environment"; Accountancy and Finance Degree -module: "Economic and socila environment", matter: "World Economy"; Economics Degree -module "Spanish Economy, sectorial and international", matter: "Economic Environment") fulfils two main functions within the degree programmes in which it is included: firstly, it introduces some of the topics present in introductory texts to economics (trade, finance, growth and development, population, resources and the environment). This has a double purpose. On the one hand, it will provide students with the basic knowledge on these programmes; on the other hand, it establishes a basis for different fields of professional specialization (from the field of external trade and international negotiations to the world of international relations and the organizations involved) and of academic specialization (from the different branches of international economics to economics of development, economics of natural and environmental resources among other topics).

Secondly, by focusing on international issues (trade, mobility of factors, and finance) and on the global dimension of certain problems (development, population, resources and the environment), this subject is intended to reinforce the cosmopolitan background of the students, an element that is especially valuable in the framework of the globalization of the marketplace and the institutions related to global and international issues. In brief, the subject “World Economy” provides students with the basic education regarding business and economy and it is especially valuable in the current era of globalization.

“World Economy” is an introductory course and does not require students to have previous knowledge in the field.

The general objective of the course “World Economy” is to introduce the economic analysis and data necessary to deal with issues related to a) trade and factor mobility, b) finance and c) global development. In short, it is about making the person who takes this degree aware that international and global issues are an inevitable component of the agenda of our time and that they can face them with the basic tools of the economy.
This general objective can be specified in the competencies and results:

DEGREE IN ECONOMICS

GENERAL COMPETENCIES
• Capacity for analysis and synthesis (CG1)
• Learning capacity (CG2)
• Capacity for fluent oral and written communication in one's own language (CG3)
• Knowledge and understanding of other languages, mainly English (CG4)
• Ability to search and analyze sources of information in the field of work (CG5)
• Ability to use computer tools and communication technologies (CG6)
• Ability to work autonomously (CG7)
• Ability to work in a team (CG8)
• Ability to work in an international context (CG9)
• Critical and self-critical capacity (CG10)
• Ability to apply knowledge in practice (CG12)
• Ability to adapt to new situations (CG18)
• Concern for quality and a job well done (CG19)
• Have ethical values ​​and behaviors (CG20)
• Integrate democratic values ​​and the culture of peace in the workplace (CG21)
• Integrate the principles of equal treatment and opportunities between women and men in the workplace (CG22)
• Integrate the principles of equal opportunities and universal accessibility for people with disabilities in the workplace (CG23)

SPECIFIC COMPETENCES
• Identify and apply the appropriate quantitative tools for the analysis of economic information (CE3)
• Understand the institutional environment and its impact on economic activity (CE6)
• Understand the behavior of economic agents and assess their influence on the structure and functioning of markets (CE7)
• Understand how an economy works at an aggregate level and assess the impact of changes in the behavior of agents or in the institutional framework (CE8)
• Understand and value the role of the public sector in the economy (CE9)
• Understand and value the international dimension of the economy (CE10)
• Understand and assess the interrelationships of economic agents (CE11)
• Analyze and evaluate economic policies (CE12)
• Understand the role of financial markets and asset valuation principles (CE15)
• Transmit information, ideas, problems and solutions in the economic field to both specialized and non-specialized audiences (CE17)
• Issue advisory reports on specific situations of the world economy or its sectors (CE18)

LEARNING OUTCOMES
• Understand the main issues of the national, international and sectoral economy, both individually and through discussion in plural work teams (RA2.1)
• Apply the basic concepts and methods of Economics to understand and analyze the key variables and their interrelationships, as well as the main problems of the national, international and sectoral economy (RA2.2)
• Learn to use the most appropriate instruments of economic analysis to interpret the relationships of interdependence existing in the economic spheres under study (RA2.3)
• Improve their ability to obtain and interpret for themselves the information and materials necessary to understand the national, international and sectoral economy, recognizing their different levels of quality (RA2.4)
• Strengthen their ability to use computer tools that allow them to approach, individually and in groups, the reality of the national, international and sectoral economy (RA2.5)
• Strengthen their ability to use information technologies as a form of communication in an international work environment (RA2.6)
• Discuss and argue in a multicultural work group about the main problems of the national, international and sectoral economy, being able to assess the technical quality of the different arguments used (RA2.7)
• Improve your ability to transmit, inform and advise on issues of the national, international and sectoral economy, synthesizing and sharing with your colleagues, and the general public, the results of the work for which you are, individually and as a group, in charge. (AR2.8)
• Assume the need to increase their autonomy to face the analysis of problems of the national, international and sectoral economy, becoming aware of their individual and collective responsibility regarding the quality of their work (RA2.9)

DEGREE IN ACCOUNTING AND FINANCE

GENERAL COMPETENCIES
• Capacity for analysis and synthesis (CG1)
• Organization and planning capacity (CG2)
• Ability to communicate orally and in writing in the native language ((CG3)
• Oral and written communication skills in a foreign language (CG4)
• Ability to use computer tools related to the field of study ((CG5)
• Ability to search, analyze and interpret information from various sources (CG6)
• Ability to solve problems (CG7)
• Ability to work in a team (CG9)
• Ability to work in an international context (CG10)
• Critical and self-critical capacity (CG12)
• Ethical commitment at work and motivation for quality (CG13)
• Autonomous learning capacity (CG14)
• Concern for environmental and social issues, equal treatment, and respect for democratic values ​​(CG19)
• Ability to apply knowledge to practice (CG20)

SPECIFIC COMPETENCES
• Understand the functioning mechanisms of the markets (CE22)
• Know the economic environment of business activity (CE23)
• Apply quantitative techniques in the analysis of financial information (CE24)
• Know the historical aspects of economic activity (CE26)

LEARNING OUTCOMES
• Understand the main issues of the economic environment, both individually and through discussion in plural work teams (RA7.5)
• Apply the basic concepts and methods of Economics to understand and analyze problems in the economic environment of companies (RA7.6)
• Learn to use the most appropriate economic analysis instruments to assess the impact that the economic environment has on business decisions (RA7.7)
• Improve their ability to obtain and interpret the information and materials necessary to understand the economic environment, recognizing their different levels of quality (RA7.8)
• Strengthen their ability to use computer tools that allow them to approach, individually and in groups, the reality of the economic environment of companies (RA7.9)
• Strengthen their ability to use information technologies as a form of communication in an international work environment (RA7.10)
• Discuss and argue in a multicultural work group about the main problems that the economic environment poses to business management, being able to assess the technical quality of the different arguments used (RA7.11)
• Improve their ability to transmit, inform and advise on issues of the economic environment, synthesizing and sharing with colleagues and the general public the results of the work for which they are, individually and in groups, responsible (RA7.12)
• Assume the need to increase autonomy to deal with the analysis of problems in the economic environment of companies, becoming aware of their individual and collective responsibility regarding the quality of their work (RA7.13)

DEGREE IN BUSINESS ADMINISTRATION AND MANAGEMENT

GENERAL COMPETENCIES
• Capacity for analysis and synthesis (CG1)
• Learning capacity (CG2)
• Capacity for fluent oral and written communication in one's own language (CG3)
• Knowledge and understanding of other languages, mainly English (CG4)
• Ability to search and analyze sources of information in the field of work (CG5)
• Ability to use computer tools and communication technologies (CG6)
• Ability to work autonomously (CG7)
• Ability to work in a team (CG8)
• Ability to work in an international context (CG9)
• Critical and self-critical capacity (CG10)
• Ability to apply knowledge in practice (CG12)
• Ability to adapt to new situations (CG18)
• Concern for quality and a job well done (CG19)
• Have ethical values ​​and behaviors (CG20)
• Integrate democratic values ​​and the culture of peace in the workplace (CG21)
• Integrate the principles of equal treatment and opportunities between women and men in the workplace (CG22)

SPECIFIC COMPETENCES
• Understand the basic mechanisms of operation and structure of markets (CE3)
• Understand the macroeconomic environment in which business activity takes place (CE4)
• Understand the economic-institutional environment and its impact on business decisions (CE5)
• Identify and apply the appropriate quantitative tools for the analysis of economic information (CE6)
• Convey information, ideas, problems and solutions in the field of business management to both specialized and non-specialized audiences (CE20)
• Issue advisory reports on specific situations of companies and markets (CE21)

LEARNING OUTCOMES
• Understand the main issues of the economic environment, both individually and through discussion in plural work teams (RA6.1)
• Apply the basic concepts and methods of Economics to understand and analyze problems in the economic environment of companies (RA6.2)
• Learn to use the most appropriate economic analysis instruments to assess the impact that the economic environment has on business decisions (RA6.3)
• Improve their ability to obtain and interpret the information and materials necessary to understand the economic environment, recognizing their different levels of quality (RA6.4)
• Strengthen their ability to use computer tools that allow them to approach, individually and in groups, the reality of the economic environment of companies (RA6.5)
• Discuss and argue in a multicultural work group about the main problems that the economic environment poses to business management, being able to assess the technical quality of the different arguments used (RA6.7)
• Improve their ability to transmit, inform and advise on issues of the economic environment, synthesizing and sharing with their colleagues and the general public the results of the work for which they are, individually and in groups, responsible (RA6.8)
• Assume the need to increase their autonomy to deal with the analysis of problems in the economic environment of companies, becoming aware of their individual and collective responsibility regarding the quality of their work (RA6.9)

In summary, the general objective of the course "World Economy" is to introduce the economic analysis and data necessary to deal with issues related to a) trade and factor mobility, b) finance and c) global development. In short, it is about making the person who takes this degree aware that international and global issues are an inevitable component of the agenda of our time and that they can face them with the basic tools of the economy.
This general objective can be specified in the following points:
1º) Know the basic data of the world economy and the main sources.
2º) Have a solid analytical base to face, at an introductory level, international trade and financial issues and international factor mobility.
3rd) Understand the keys to growth and understand the economic dimensions of the problem of underdevelopment and the strategies proposed to solve it.
4th) Understand the possibilities and limitations that the population and resources pose to development, and be able to analyze them economically.
5º) Have the necessary basis to take the subjects of this degree related to international and global issues.

PROGRAMME AND BASIC BIBLIOGRAPHY

I.   International trade and mobility of economic factors

Topic   1.- Basic analysis of international trade

Topic   2.- Trade policies

Topic   3.- International mobility of economic factors

II.  International Finance

Topic   4.- Balance of payments and exchange rates

Topic   5.- International monetary relations

III. Global development

Topic   6.- Growth and development

Topic   7.- Population, resources and the environment

SAMUELSON, P. A. and W. D. NORDHAUS (2010): Economics, 19ª ed., McGraw Hill, International Edition.

KRUGMAN, P. R. and M. OBSTFELD (2006): International economics. Theory and policy, 7ª ed., Pearson (topic 6).

DETAILED PROGRAMME AND OBJECTIVES

Topic 1.- Basic analysis of international trade

Content:

1.1.- The sources of international trade and classical analysis

1.2.- Neoclassical analysis of international trade

Structure and teaching hours:

After a review of some basic concepts and of the sources of trade, there is an examination of classical analysis, introducing, by means of numerical examples, Adam Smith's absolute advantage and David Ricardo's comparative advantage. Later, the focus shifts to neoclassical analysis to show the effects of free trade both in terms of quantities and prices and of welfare (8 hours, 4 theoretical and 4 practical).

Objectives:

Get to know the international flow of trade.

Understand the following concepts:

• Autarky and free trade
• The open economy, imports and exports, GDP, GNP and national income
• Inter- and intra-industry trade
• The absolute advantage and the comparative advantage
• The opportunity cost
• Terms of trade
• “Small country” and “large country”
• “Consumer surplus” and “Producer surplus”
• “The one euro-one vote yardstick”
• “The production effect” and “the consumption effect” upon passing from autarky to free trade

Skills development (analysis, synthesis, application):

• Numerical analysis of the absolute advantage and the comparative advantage
• Graphic analysis of the comparative advantage

Proposal of voluntary continuous assessment activities:

• Reading  material to be set (15 pages maximum) alongside the dates for corresponding tests.

Practical component:

Practical application: the effects of the free trade on the exporting country.

Basic bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 340-344 and 348-351.

Topic 2.- Trade policies

Content:

2.1.- Tariffs and non-tariff barriers

2.2.- Free trade and protectionism: theory and institutions

Structure and teaching hours:

In the previous topic, free trade was shown to have a generally favourable outcome but the fact is that countries do not always practice it and in many cases protectionism is preferred. In this topic, the different trade barriers (tariffs and non-tariff barriers) are introduced, their effects are analysed and the main arguments in favour of protectionism are examined alongside the institutional framework governing international trade relations (8 hours, 4 theoretical and 4 practical).

Objectives:

Understand the following concepts:

• Tariffs, specific tariffs and ad valoremtariffs
• The “production effect” and “the “consumption effect” of tariffs
• Non-tariff barriers
• Quotas or quantitative restrictions on importation
• Import licenses
• Voluntary exports restraints (VERs)
• The optimal tariff argument
• The infant industry argument
• Multilateralism (GATT- OMC) and regionalism (integration)
• The most-favoured nation ( MFN) clause
• The General Agreement on Tariffs and Trade (GATT)
• The World Trade Organization (WTO)
•  Multilateral Trade Negotiations (Kennedy, Tokyo, Uruguay, Doha Rounds)
• The GATT, GATS y TRIPS agreements

Knowledge of the main arguments related to protectionism.

Understanding of international trade relations and their institutional framework.

Skills development (analysis, synthesis, application):

• The graphical analysis of tariffs

Practical component:

Exercises on economic activity measures.

Basic bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 351-361.

Topic 3.- International mobility of economic factors

Contents:

3.1.- An economic analysis of the international mobility of labour

3.2.- An economic analysis of multinational corporations

Structure and teaching hours:

Trade theory is based on the perfect mobility of goods and services (free trade) and on the immobility of economic factors but the fact is that it is impossible to understand the modern world without multinationals and migration, which are the key issues of this topic (8 hours, 4 theoretical and 4 practical).

Objectives:

Get to know and understand the following concepts:

• International movements of capital and inflows and outflows of capital
• Direct foreign investments and portfolio investment
• Multinational corporations, parent company and subsidiaries
• Transfer price
• Intra-firm trade
• OLI (Ownership, Location, Internalization) paradigm

Understand the scale and characteristics of migration and of direct foreign investment.

Skills development (analysis, synthesis, application):

• Graphic analysis of international labour mobility
• Analysis of OLI paradigm

Practical component:

Application: the effects of international labour mobility.

Basic bibliography:

KRUGMAN, P. R. and M. OBSTFELD (2006), pages 159-166 and 168-173.

Topic 4.- Balance of payments and exchange rates

Contents:

4.1.- The balance  of payments

4.2.- The exchange rate

Structure and teaching hours:

The topic corresponding to international finance starts with a presentation of the balance of payments from an accounting perspective and an introduction of exchange rates. The curves of the supply and demand of foreign exchange are derived from the movements of goods and services in order to show the connection of this part with the previous topic, which is focused on trade issues. The topic concludes with an introduction to the long-term point of reference for exchange rates (the Purchasing Power Parity, PPP), which is also significant due to its use in international comparisons (8 hours, 4 theoretical and 4 practical).

Objectives:

Get to know and understand the following concepts and terms:

• Balance of payments
• Flows versus stocks
• Income and payments, credits and debits, assets and liabilities
• Deficit, surplus
• Balance of trade
• Current account balance
• Net foreign investment
• Capital account
• Financing capacity and necessity
• Financial account
• Reserve assets and variations in reserve assets
• Balance of balance-of-payments accounts
• Foreign currencies and foreign exchange market
• Exchange rate
• Appreciation and depreciation
• Purchasing Power Parity and the Law of One Price

Skills development (analysis, synthesis, application):

• Balance of payments accounting
• The derivation of foreign exchange market graphs from trade
• Shifts in foreign exchange market graphs

Practical component:

Balance of payment exercises

Basic bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 543-561

Topic 5.- International monetary relations

Contents:

5.1.- The fixed exchange rate and the Gold Standard

5.2.- From the Bretton Woods system to the era of flotation

Structure and teaching hours:

As the most basic elements of exchange rates have been introduced in the previous topic, they must be applied to real cases. This is the aim of the present topic in which the different exchange rate systems are introduced and the three main systems used up to the present time are reviewed (8 hours, 4 theoretical and 4 practical).

Objectives:

Get to know and understand of the following concepts :

• The international monetary system
• Fixed, adjustable peg and flexible (or floating) exchange rates
• Revaluation-devaluation; appreciation-depreciation
• The Gold Standard
• Price specie- flow mechanism
• Bretton-Woods System, International Monetary Fund and the World Bank

Understand the evolution of international monetary relations and their institutional framework.

Skills development (analysis, synthesis, application):

• Analysis of the price specie-flow adjustment mechanism
• Graphic analysis of foreign exchange market intervention

Practical component:

Exchange rate exercises

Balance of payment and exchange rate exercises 

Basic Bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 557-561. 

Topic 6.- Growth and development

Contents:

6.1.- Analysis of growth

6.2.- The problem of underdevelopment and its analysis

Structure and teaching hours:

The possible solution to the problem of poverty and underdevelopment is tied up with the economic growth.  In this topic the concept of growth is introduced and the theories are reviewed from the basis of the neoclassical model. In this context, the problem of underdevelopment is introduced and the factors and strategies involved in development are examined, paying special attention to their international dimension (8 hours, 4 theoretical and 4 practical).

 Objectives:

Get to know and understand the following concepts:

• Economic growth
• Growth rates and the rule of 70
• The neoclassical model of growth
• Capital deepening
• Technology
• Productivity and the total factor productivity
• The Growth-accounting approach
• The Malthusian trap
• Endogenous growth (new theories of growth)
• Developed Countries and Developing Countries and Less Developed Countries
• The vicious circles of poverty
• The Human Development Index
• Import substitution and export promotion

Understand the problem of underdevelopment. 

Skills development (analysis, synthesis, application):

• Graphic analysis of the neoclassical model of growth

Practical component:

Balance of Payments and exchange rate exercises

Exercises on growth and development.

Basic bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 501-510, 514-516 and 521-533.

Topic 7.- Population, resources and the environment

Content:

• 7.1.- Economic analysis of population and natural resources
• 7.2.- Economic analysis of pollution and global environmental proble

Structure and Teaching hours:

 Population and resources are key issues in the general analysis of the global economy, as these factors may boost or limit the economic activity. The topic begins with an economic analysis of the population (the economic theory of fertility) and with an analysis of the appropriable natural resources. Following on from this, there is an attempt to tackle an economic analysis of pollution and its links with global environmental problems (8 hours,4 theoretical, 4 practical).

 Objectives:

Get to know and understand the following concepts:

• Demographic transition, birth rate, fertility and mortality
• Renewable vs. non-renewable resources
• Appropriable vs. inappropriable resources
• The Kuznets curve and the environmental Kuznets curve
• Limits to growth and sustainable development
• Externalities
• Global public goods
• The United Nations Conference on Environment and Development (the "Earth Summit")
• The hole in the ozone layer and the Montreal Protocol
• Climate change, the Framework Convention on Climate Change, the Kyoto Protocol, The Intergovernmental Panel on Climate Change

Skills development (analysis, synthesis, application):

• Microeconomic theory of fertility
• Graphic analysis of the problem of contamination

Practical component:

Analysis of the sources and data related to population and resources.

Basic bibliography:

SAMUELSON, P. A. and W. D. NORDHAUS (2010), pages 268-280.

In-class teaching is based on theoretical and practical lectures and is complemented by continuous assessment activities (linked to follow-up questions, readings and the Country Report).

Theoretical classes will consist of lectures (an explanation of the content of each lesson by the lecturer).

Practical classes will be focused on the achievement of two objectives: on the one hand, the consolidation of the knowledge and skills acquired in the theoretical lectures by means of their application to new cases, and, on the other hand, the development of the capacity for analysis and synthesis of the information related to the content of the subject.

As regards tutorials, preference will be given to those requested in advance. For this reason, and in the interest of guaranteeing this service to students and of making the best use of their time, these tutorials should be reserved in advance (at the beginning or end of classes, by e-mail...)

Exceptionally, if sanitary conditions require it, remote and distance teaching activities could be included. In which case, students will be informed of the changes made.

The following tables show the distribution by time and topic of contact and non-contact activities.

The evaluation of the subject is based on the written examination, to be held on the day fixed by the school and on continuous assessment activities (the tasks, the reading material and the follow-up questions which take place along the term).

In the case of demonstrable proof of incompatible behaviour with academic honesty rules(consult University of Oviedo "Reglamento de Evaluación"), none of the marks obtained by any of the people involved will be taken into account for any of the affected course components (both continuous assessment activities and the examination).

Course Tasks (with a minimum of two) will deal with applications and extensions of lectures (For example, exploring the economic characteristics of a country). All of them will be announced trough the virtual campus indicating the deadlines to be completed. The maximum mark obtainable via tasks is 1.5 points.

The Reading Material will be given a maximum evaluation of 1 point.  There will be checks relating to the contents of the reading material, which will consist of answering a series of questions about the reading material.

The follow-up questions (a minimum of two), considered together, constitute a maximum of 1.5 points and may be asked in at any moment in classes.

The examination will include questions on a) concepts, b) graphic analysis, c) exercises, and d) applications. 

As indicated in the summary table, in the ordinary call (May) and in the extraordinary call in June/July, the final grade will be formed by the sum of the points obtained in the exams of said calls (which are graded with a maximum of six points) and in the activities of continuous evaluation (maximum possible qualification equal to four points).

In the advanced extraordinary call there is no continuous evaluation and, consequently, the final grade will be the one obtained in the exam, which will be graded out of ten points.

Summary table

As it is established in the “Reglamento de evaluación”, “the students who follow the partial time regime could have a differentiated evaluation (when they are admitted for this regime) consisting in a unique evaluation test” (final exam) which, in this case, will be valued with 7.5 points. The remaining 2.5 points are related with a selection of tasks, follow-ups and readings for which these students have to follow the general rules previously mentioned. In this situation, the subject cannot be passed without a minimum of 2.5 points in the exam.

Exceptionally, if sanitary conditions require it, remote and distance assessment activities could be included. In which case, students will be informed of the changes made.

 As it has been already detailed in this guide, the basic manuals are the following:  

SAMUELSON, P. A. and W. D. NORDHAUS (2010): Economics, 19ª ed., McGraw Hill, International edition.

KRUGMAN, P. R. and M. OBSTFELD (2006): International economics. Theory and policy, 7ª ed., Pearson (topic 6). 

This bibliography is a minimum reference list so understand it for guidance. Regarding other material, every lecturer will comment on the most relevant sources (further reading, diagrams, notes...) to enable students to follow the course properly, alongside the specific rules governing the progress of the subject.