CAS IR 368/EC 368: Contemporary East Asian Economics
Semester I, 2004/5
MWF 9:00-10:00 a.m.
CAS 316
Professor William Grimes
Office Hours: M 1-3 p.m., W 10 a.m.-12 noon, 154
Bay State Rd., Rm. 400
F
10-11 a.m. or by appt. Tel: 353-9420
http://www.bu.edu/wgrimes wgrimes@bu.edu
This
course considers the economic development of Japan, Korea, and Taiwan from the
end of World War II to the present.
It will emphasize the institutions and historical conditions which both
contributed to and slowed development in the three economies. We will consider similarities and
differences in their experiences of economic development, and examine some of
the challenges facing each economy today.
The
first half of the course will consider JapanÕs post-war economy. We will try to understand how Japan
moved from impoverishment and military defeat to industrial, technological, and
financial superpower. While we
will discuss the costs of development, the focus will be on the economic and
political factors that allowed Japan to grow in such an astounding way
throughout much of the post-war period.
We will also address at length the problems of the Japanese economy
since the early 1990s, and the issue of why Japanese institutions have done such
a poor job of addressing them.
Most
of the second half will consider Korean and Taiwanese post-war
development. We will consider
closely the contrast between earlier and later policies, as well as the
persistence of economic institutions.
This contrast highlights two questions: What do the experiences of Korea and Taiwan tell us about
the role of government policies in economic growth? And, how do the political and economic goals of government
leaders either reinforce or contradict one another? We will also look at the differing effects of the Asian
Financial Crisis on the two countries.
Requirements
Students
are expected to attend all classes and keep up with the weekly reading
assignments (approximately 80-100 pp. per week). There will be one in-class midterm and a final exam. Attendance will be taken regularly. The weights are as follows:
Midterm
35%
Final
Exam 55%
Attendance/Participation 10%
NOTE: If you
miss class for any reason, it is your responsibility to ensure that you obtain any assignments or
handouts. All assignments and
handouts, in addition to the syllabus, will be made available on my webpage.
Readings
Thomas Cargill, Michael
Hutchison, and Takatoshi Ito, Financial Policy and Central Banking in Japan (MIT Press, 2000).
David Flath, The Japanese Economy.
Oxford: Oxford University
Press, 2000.
Edward Graham, Reforming
KoreaÕs Industrial Conglomerates. Washington, DC: Institute for International Economics,
2003.
Li, Kuo-Ting, The
Evolution of Policy Behind TaiwanÕs Development Success, 2nd edition. Singapore:
World Scientific, 1995.
The above books are on sale
at the bookstore and on reserve in the library. Photocopies of all other chapters and articles in the
syllabus are available through the BU Library system, either through the
E-Journals resource or on reserve in either Mugar or Pardee (SMG) library.
Course Outline
The Contemporary East Asian Economies
MWF 9-10 a.m.
Wed. 9/8 East
Asia: Historical and Geographical
Overview
Fri. 9/10 Film: Reinventing Japan
Mon. 9/13 Occupation
to Oil Shocks I
Flath,
Chapt. 3.
Wed. 9/15 Macroeconomic
Issues Ð Savings and Investment
Flath,
Chapt. 4, 6.
Fri. 9/17 Review
Mon. 9/20 Labor
Management and Labor Movement
Flath, Chapt. 15.
Wed. 9/22 The
Japanese Production System: Kanban and QCs
Michael
Cusumano, The Japanese Automobile Industry: Technology and Management at Nissan and Toyota (Cambridge:
Harvard University Press, 1991), pp. 262-307, 320-342.
Fri. 9/24 Review
Mon. 9/27 Keiretsu:
Corporate Alliances
Flath,
Chapt. 12.
Wed. 9/29 Industrial
and Technology Policy
Flath,
Chapt. 9; Daniel Okimoto, Between MITI and the Market (Stanford, 1989), pp. 55-86.
Fri.
10/1 Review
Mon. 10/4 Deregulation
Edward
Lincoln, Arthritic Japan
(Brookings, 2001), Chapt. 3; Ulrike Schaede, ÒIndustry Rules: From Deregulation to Self-Regulation,Ó
in Ulrike Schaede and William Grimes, eds., JapanÕs Managed Globalization (M.E. Sharpe, 2002), pp. 191-214.
Wed.
10/6 Innovation
Michael
Porter, Hirotaka Takeuchi, and Mariko Sakakibara, Can Japan Compete? (Perseus, 2000), Chapt. 5; D.H. Whittaker, ÒCrisis
and Innovation in Japan,Ó in William Keller and Richard Samuels, eds., Crisis
and Innovation in Asian Technology
(Cambridge, 2003), pp. 57-85.
Fri. 10/8 Review
Wed. 10/13 Finance
and Financial Policy in the 1980s:
Bubble and Crash
Thomas
Cargill, ÒJapan, the Asian Crisis, and Financial LiberalizationÓ (mimeo, in
library)
Fri. 10/15 Finance
and Financial Policy in the 1990s:
Recession and Policies for Recovery
Cargill,
et al., Chapts. 2, 3.
Mon. 10/18 Continuing
Stagnation and Policy Issues
Cargill, et al., Chapts. 5, 6.
Wed. 10/20 Central Bank and Financial Supervision Reforms
Cargill,
et al., Chapt. 4.
Fri.
10/22 Review
Mon.
10/25 Midterm
Exam
Wed. 10/27 Trade
Frictions
Flath,
Chapt. 8; C. Fred Bergsten, Takatoshi Ito, and Marcus Noland, No More
Bashing (Institute for International
Economics, 2001), Chapts. 4-5.
Fri. 10/29 Outward
Investment
Arthur
Alexander, In the Shadow of the Miracle (Lexington Books, 2002), pp. 93-114.
Mon. 11/1 Exchange
Rates
Arthur
Alexander, In the Shadow of the Miracle (Lexington Books, 2002), 115-138.
Wed. 11/3 Fiscal
Implications of JapanÕs Aging Society
Hiromitsu
Ishi, Making Fiscal Policy in Japan
(Oxford, 2000), Chapt. 10.
Part
II: Korea and Taiwan in the
Post-War Period
Fri. 11/5 Korea
and Taiwan: From
Import-Substitution to Export-Led Growth
Li, ÒIntroductory EssayÓ and Chapt. 1.
Mon. 11/8 Korea: Industrial Targeting in the Park Years
Graham,
Chapt. 2 and Appendix 2.1.
Wed. 11/10 Korea: The Growth of the Chaebol
Graham,
Chapt. 3; Eun Mee Kim, Big Business, Strong State (SUNY, 1996), Chapt. 3.
Fri.
11/12 Review
Mon. 11/15 State
and Finance in Korea
Soon
Cho, The Dynamics of Korean Economic Development (Institute for International Economics, 1994),
Chapt. 6.
Wed. 11/17 State
and Finance in Taiwan
Li,
Chapt. 3; Tzong-shian Yu, ÒThe Evolution of Commercial Banking and Financial
Markets in Taiwan,Ó Journal of Asian Economics, vol. 10 (1999), pp. 291-307 [available in Mugar
e-journals].
Fri.
11/19 Review
Mon. 11/22 Korea
and Taiwan: From Smokestacks to
Computer Chips
Li. Chapt. 7;
Charles Harvie and Hyun-Hoon Lee, KoreaÕs Economic Miracle: Fading or Reviving? (Palgrave, 2003), Chapt. 6; Vincent Wei-cheng Wang,
ÒDeveloping the Information Industry in Taiwan: Entrepreneurial State, Guerrilla Capitalists, and
Accommodative Technologists,Ó Pacific Affairs, vol. 68, no. 4 (Winter 1995-96), pp. 551-576
[available in Mugar e-journals].
THANKSGIVING
BREAK
Mon. 11/29 After the Asian Financial Crisis Ð Financial Restructuring
Jin-Wook Choi, ÒRegulatory Forbearance and Financial
Crisis in South Korea,Ó Asian Survey, vol. 42, no. 2, 2002, pp. 251-275 [available through Mugar
e-journals]; Cho Yoon-je, ÒKoreaÕs Financial Sector Restructuring after the
Crisis,Ó Joint U.S.-Korea Academic Studies, vol. 13 (2003), pp. 105-142.
Wed. 12/1 After the Asian Financial Crisis Ð Corporate Restructuring
Graham,
Chapt. 5; Gregory Noble and John Ravenhill, ÒThe Good, the Bad, and the
Ugly? Korea, Taiwan, and the Asian
Financial Crisis,Ó in Gregory Noble and John Ravenhill, The Asian Financial
Crisis and the Architecture of Global Finance (Cambridge, 2000), pp. 80-107.
Fri.
12/3 Review
Mon. 12/6 Confronting
Economic Maturity in Taiwan
Christopher
Howe, ÒThe Taiwan Economy: The
Transition to Maturity and the Political Economy of Its Changing International
Status,Ó China Quarterly, vol.
148 (1996), pp. 1171-1195 [available in Mugar e-journals].
Wed. 12/8 Production
Networks in East Asia
Edward Lincoln, East Asian Economic Regionalism (Brookings, 2004), Chapts. 3, 4.
Fri. 12/10 Review
Mon. 12/13 Overall
Review of Post-War East Asian Economies