SAINT AUGUSTINE SEMINARY Suqui, Calapan, City

Subject Term Professor

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ECONOMIC ANALYSIS 1st Semester SY 2011-2012 Pio Crisostomo R. Isidro, M.S. Sociology of Development

Course Description This is an introductory course in economics for non-economics major, but it also serves as credit for those who will major in economics. It shall expound on economics as a social science such that students shall have opportunities to learn the methods of analyzing social, national, and international issues and concerns from the economic point of view. The course also introduces an eco-system based community centered sustainable organization and management (ECSOM) framework in order to enhance economic analysis at the household and community side as compared to the traditional analytical emphasis on the firm and industry side of the economic system. The new development paradigm for Integral Development and Well-being shall also form part of class discussions and research with exposure on this area is required. There will be a learners research component wherein any economic topic taken up in class will be the subject of a term paper that is to be related to the social teachings of the Church and to the Indigenous concept of development. Course Objectives General Objectives: Upon completion of this course, the students by the knowledge learned and attitude imbibed and skills gained in understanding the basic economic theories, principles and concepts, will be able to evaluate economic decisions as well as their implications and repercussions with regard to the economy, the environment, Indigenous peoples and society as a whole. Also, they will be able to show the empirical relevance and applications of said theories, principles and concepts to economic problems and issues in the context of the political and global milieu.

Specific Objectives: Specifically, the course intends that at the end of the semester, the students will be able to:

A. Cognitive 1. Understand the basic economic theories, concepts, principles and policies that guide or influence the actions of various economic agents in society; 2. Know how to apply the analytical methods of economics to social, national, and international issues such that the impact and implications of alternative proposed solutions to households/communities, firms/industries, sectors, and nations can be clarified; and 3. Make economic conclusions and recommendations on the basis of analyses undertaken within the context of Vicariates vision and mission (Sustainable Agriculture), the social teachings of the Church, and the Indigenous paradigm of development. B. Affective 1. Appreciate the applications of basic economic theories, concepts, and principles learned through discussions, case reflections, problem solving and analysis; 2. Realize the need to interpret and view the existing economic realities from a Christian Filipino, Asian, and global perspective; and 3. Develop the values of patience, perseverance and industry in analyzing economic problems and in looking for appropriate paradigms and solutions or alternatives thereof. C. Psychomotor 1. Utilize appropriate fundamental economic tools in evaluating socio-economic data or concerns; 2. Develop skills in constructing elementary graphs, diagrams, charts, and the like for the purpose of presentation and data analysis; 3. Develop skills in designing simple schematic flows, paradigms or models to explain economic variables and their fundamental causality or interrelationships; and 4. Explore the possibility of alternative theories, principles, and concepts to represent or explain existing or emerging local and global economic phenomena, especially with relevance to the teachings of the Church and the Indigenous people. Methodology/Delivery Modes 1. 2. 3. 4. 5. Lecture Oral/Written, Individual and Group Reporting on Assigned Topics Discussion Individual Paper on a chosen topic or area of analysis Transparency/Audio-Visual Presentation 2

6. Exposure Grading System 1. 2. 3. 4. 5. Individual Reporting (20%) Reflection on the Periodic Reading (15%) Group report and analysis (Finals) (30%) Attendance and class participation (10%) Individual analytical reflection (Midterm) (25%)

Topical Course Outline/Course Contents (3-hour session per meeting) MEETING TOPIC NUMBER 1 Consultation/clarification of expectations Lesson 1. Economics as a Science

What is Economics, the 3 Major Markets, Economics as a Science? Ref: Stiglitz & Walsh, Chapts. 1-2. The Ten Principles of Economics (Mankiw, Chapter 1) The Circular Flow Model: The Focus of Traditional Economics On Firm (Industry)

Trade and Comparative Advantage Ref: Stiglitz & Walsh, Chapt. 3 Demand, Supply, and Price Ref: Stiglitz & Walsh, Chapt. 4 Using Demand and Supply Ref: Stiglitz & Walsh, Chapt. 5 Lesson 2. Development as a Main Concern of Economics

Development as an Integral and General Concept in the Context of the Social Teachings of the Church 6 Development and Transition Ref: Stiglitz & Walsh, Chapt. 37. Sustainable Development: The ECSOM approach and CSBCom

Lesson 3. Macroeconomic (National Economy) Issues 7 Macroeconomics and the Macroeconomy Macroeconomic Goals and Measurement Ref: Stiglitz & Walsh, Chapts. 22-23

Topical Course Outline/Course Contents (3-hour session per meeting) MEETING TOPIC NUMBER 8 National Income Accounts of the Philippines (NSCB & BSP-SPEI) Gross Domestic Product (GDP), Gross National Product (GNP) Three Approaches in Measuring GNP in the Philippines Inflation and Unemployment Investment, Consumption Expenditure A. Fiscal Policy 1. Government Expenditures and Revenues 2. Taxation: Principles; Types of Taxes; Principles of Tax Collection B. Monetary Policy: Money Supply, Interest Rate, and Inflation Targeting International Trade: Balance of Payments; Peso-Dollar Exchange Rate International Trade: Trade Barriers; Role of IMF, World Bank, WTO, & Free Trade Associations

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Lesson 4. The Microeconomic Issues (Theories of the Firm/Industry) 14 Understanding Consumer Behavior: The law of diminishing satisfaction; The law of supply and demand; Normal goods/services vs. inferior goods/ Services, basic vs. luxury types of goods/services. Ref: Stiglitz & Walsh, Chapt. 6 Understanding the Firm/Enterprise (Theory of the Firm): The law of Diminishing returns; Best factor combination; Cost fixed vs. variable costs, total cost, average cost, marginal cost; Bases for profit maximizing,

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losing, and shut-down conditions; Price, Revenue (total, average, and marginal). Ref: Stiglitz & Walsh, Chapts. 7-8 16 Understanding the Market Situation & Government Policies: Sellers Side Pure Competition, Imperfect Competition, Oligopoly, Monopoly Buyers Side Monopsony, Oligopsony Ref: Stiglitz & Walsh, Chapts. 10-13. Applications of Microeconomics to ECSOM: Co-creating Sustainable Bioregional Communities (CSBCOM), the ASI Praxis of ECSOM

Cases and Supplementary Topics/Readings (To be assigned as individual reflection papers to be submitted for class discussion). A. Case Study: The Trend towards Outsourcing McEachern, pp. 610-611 Questions to answer: 1. Who benefits from outsourcing, third world labor & BOP or US businesses? 2. What will the present Philippine economy be like without outsourcing by US companies? B. International Trade: McEachern, Chapt. 32, pp. 713-736. C. Case Studies: The Global Economy The World Trade Organization The Asian Contagion Crony Capitalism in Indonesia McEachern, p.96 McEachern, p. 727 p. 754 p. 767 McEachern, Chapts. 21-23

D. Market Structure and Pricing Perfect Competition, Monopoly, & Oligopoly E. Case Studies: India on the Move US Deficits & Debt

Vietor, pp. 58-55 Vietor, pp. 345-391. Ocampo (ed.), pp. 211-232

F. Divergence and Growth Collapses

Textbook/Main Reference: 1. Stiglitz, Joseph E. & Carl E. Walsh. (2002). Economics. 3rdh Edition. New York: W.W. Norton & Co., Inc 2. Schumacher, E. F. 1973. Small is Beautiful: Economics as if People Mattered. London: Perennial Library.

Additional References 1. Alcaly, Roger. (2003). The new economy. What it is, how it happened, and why it is likely to last. New York: Farrar, Straus and Giroux. 2. Bangko Sentral ng Pilipinas (BSP). Selected Philippine economic indicators. April 2007. 3. Baumol, William J. (2003). Economics: Principles and policy. Mason, Ohio: Thomson/South-Western College Pub. 4. Budd, Leslie & Harris, Lisa (eds.). (2004). E-economy: Rhetoric or business reality? New York: Routledge. 5. Carbaugh, Robert J. (2001). Contemporary Economics: An application approach. Cincinnati: South-Western College Pub. 6. Coleman, Simon & Watson, Helen. (1990). An introduction to Anthropology. New Jersey: Chartwell Books 7. Collinge, Robert A. (2001). Economics by Design: Principles and issues. Upper Saddle River, New Jersey: Prentice-Hall. 8. Gough, Julian. (c.2000). Introductory Economics for Business and Management; England: McGraw-Hill Publishing Company. 9. Hall, Robert E. (2003). Economics: Principles and applications. Mason, Ohio: Thomson/South-Western Pub.

10. Hodgson, Geoffrey M. (1999). Economics and Utopia: Why the learning economy is not the end of history. London: Routledge. 11. Keynes, John Maynard. (1935). The general theory of employment, interest and money. New York: Harcourt Brace. 12. List, John A. (2004). Testing Neo-classical competitive theory in multilateral decentralized markets. Journal of Political Economy, 112(5), October. USA: The University of Chicago Press. 13. Mankiw, Gregory N. (1998). Principles of economics. Fort Worth, Texas: Dryden Press. 14. McEachern, William A. (2000). Economics: A contemporary introduction. 5th ed. Cincinnati, Ohio: South-Western College Publishing. 15. Miguel, Edward; Satyanath, Shanker; & Ernest Sengenti. (2004). Economic shocks and civil conflict: An instrumental variables approach. Journal of political economy, 112(4), August. USA: The University of Chicago Press. 16. National Statistical Coordination Board (NSCB). The national income accounts of the Philippines, Year 2004-2006 17. Ocampo, Jose Antonio (ed.). (2005). Beyond reforms. Structural dynamics and macroeconomic vulnerability. UN Economic Commission for Latin America and the Carribbean. Palo Alto, California: Stanford University Press. 18. Parson, Julie (ed.). (2004). Lotus illustrated dictionary of economics. New Delhi: Lotus Press. 19. Samuelson, Paul. (1999). Economics. New York: McGraw-Hill. 20. Sicat, Gerardo P. (1983). Economics. Manila, Philippines: National Book Store. 21. Todaro, Michael P. (2001). Economic Development. 7th Edition. Singapore: Pearson Education Asia Pte Ltd. 22. Vietor, Richard H.K. (2005). Globalization and Growth. Case studies in national economic strategies. 2nd ed. Handouts: 1. Continuum of Contemporary Ideological Options. Photocopy from original Mimeographed. Manila: ASI, c. 1988.

2. The Christian Perspective on Evaluating Economic Systems. Photocopy from original Mimeographed. Manila: ASI, c.1988. 3. Various clippings/reports from institutions and the press as these come out.

Prepared by:

Prof. GIL C. ALONSASAY Professor Head, Economics Section

Noted:

DR. VILLAMOR D. VITAL, DBA Vice President, Academe-Research and Academic Dean