Insegnamenti I & II Livello
Programma dell'insegnamento: The Present Crisis an Interdisciplinary Approach
Corsi di Laurea
EC
Codice Cfu Insegnamento
6The Present Crisis an Interdisciplinary Approach
Semestre
II sem.
Docente
Ranchetti Fabio
tel: 050-2212846  email: ranchetti@ec.unipi.it
Ore di lezione
18

Apprendimento in termini di conoscenza
Objective of the course, course organization and teaching methods
The objective of this course is to stimulate thought and discussion in order to get a better understanding of the present global crisis, its nature and its causes.
One of the main difficulty in studying the present crisis stems from the fact that the conventional wisdom considers it mainly as due to a financial crisis, though extremely serious; although nobody can deny that it certainly has much wider consequences to people, their lifes, their jobs, their social habits, their consumption and investment patterns, and also their way of thinking and feeling. Therefore, as it should always be the case when one considers a complex question or phenomenon, rather than analyse and tackle the crisis with the only tools of economic theory, a better suited strategy would be to employ and combine together different disciplines with their different approaches. In particular, we will rely on some historical research (e.g. to make comparison between the present crisis and the Great Depression), on some philosophical and psychological arguments (i) about how people react to uncertainty and loss of confidence, developing sentiments of fears and hope, and (ii) on whether ethics shoud enter, and how, into the economic discourse (think, for example, of the amply debated issue of the immorality of the extraordinarily high level of rewards which are given to the very same bankers who, at the same time, have been accused of being the cause of this great financial turmoil; or think of the notions of greed and moral corruption which are also posited by many at the origin of the crisis). Contemporary literature will also be of great help in explaining the social, economic, and moral roots of the recession we are experimenting, and its effects on people and their lives.
Also as a consequence of the complexity of the question, our method of analysis will require the use of a wide range of different material: textbooks, books, academic papers, official documents, novels, newspaper articles, blogs, videos, and films. We will devote some time to show how to use Internet intelligently and efficiently in order to get the relevant economic information. (This is also something which is never taught in class.) Last but not least, a condition for the success of the course will be a lively and active class partecipation from the students, which will therefore be strongly (although kindly) encouraged by me to raise questions and put forward new ideas and also suggestions on how to improve a course which is very experimental. (Let me just give an example of what I mean. My knowledge of contemporary literature is quite poor. If some students could suggest a few more (interesting :-) books, novels or short stories, in which the present crisis occupies a relevant part, that would help and I will be very happy. I, for one, have been, as far, able to single out just two (though very interesting) novels.) Although it is a course on a quite devastating crisis, it should not deprime us; on the contrary, it is also aimed at providing a lively and cheerful way to spend our time together.

Programma
1.What do we mean by “crisis”.
2.The present economic recession: some facts and figures. A short chronology: 2007-2010.
3.The different tools and approaches at our disposal. Examples: a) a piece of economic theory; b) a sequence of a film; c) a chapter of a novel; d) a blog.
4.Financial markets and institutions, and central banks. A bit of theory and some positive analysis of the practical working both of the markets and the institutions.
5.How and why there exist different economic interpretations of the crisis. The main three: the neoclassical one, the neokeynesian one, the radical one. Again, (precise and clear) examples (i.e. we will not enter into lenghty examinations of the theories that stand at the back of those different interpretations).
6.What history has to teach us: a (brief) comparison between the present crisis and the Great Depression of last century. (Here, it would also be interesting to compare a novel like John Steinbeck’s The Grapes of Wrath, depicting the consequences of the Great Depression on a farming family - which many consider as the greatest novel written about the G.D. - with one of the just published novels quoted below. There is also a very famous film version by John Ford, starring Henry Fonda).
7.What philosophy and psychology have to teach us. Again, some precise examples (not a general discussion).
8.What poets (if we’ll be able to find them!) and novelists (here we have at least two, and good ones too!) have to teach us.
9.Provisional, but (at least, I hope, after this course) reasoned conclusions.

Testi consigliati per la consultazione
Given our interdisciplinary approach and unconventional teaching method, we will make use of a variety of materials: textbooks, books, academic papers, novels, newspaper articles, blogs, videos, and films. What will be required reading (or viewing, or listening) for the exam, will be decided later on, considering the students preferences as well. This is an experimental and innovative course, and the examination methods should accordingly be innovative.
Just to give an idea of the variety of the material we will be utilizing, I’m here appending a preliminary list of ‘items’ which will be very relevant to us (of course, it will never be assumed a knowledge of all of them, and we will not use everything here indicated nor in its entirety):

A.Economics
a)as a general background, the student should be already confident with the language of economics and the basic economic notions explained in a good introductory textbook. If that is not the case, we will provide and/or review the necessary economic tools. Amongst the best economics textbooks, I would mention the following:
- Frank-Bernanke, Economics, 2009 ed.
- Krugman-Wells, Economics, 2009 ed.


- Mankiw, Principles of Economics, 2009 ed.
- Stiglitz-Walsh, Economics, 2007 ed.
- Taylor-Werrapama, Principles of Economics: Global Financial Crisis Edition, 2010
b)on the 2007-10 crisis:
Akerlof-Shiller, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, Princeton University Press, Princeton 2009
Fox, The Myth of the Rational Market. A History of Risk, Reward, and Delusion on Wall Street, Harper, New York 2009
Krugman, The Return of Depression Economics and the Crisis of 2008, Norton, New York 2009
Morris, The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash, Public Affairs, New York 2009 (new ed.)
Posner, A Failure of Capitalism, Harvard University Press, Cambridge 2009
Shiller, The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It, Princeton University Press, Princeton 2009
Smithers, Wall Street Revalued. Imperfect Markets and Inept Central Bankers, Wiley, London and New York 2009
Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy, Norton, New York 2010


B. History
Bernanke, Essays on the Great Depression, Princeton University Press, Princeton 2004
Galbraith, The Great Crash, 1929, Penguin 2010 (first ed. 1954)
Keynes, “National Self-Sufficiency”, in The New Statesman and Nation, July 1933
Keynes, “How to Avoid a Slump”, in The Times, 12-14 January 1937
Kindleberger, The World in Depression, 1929-1939, University of California Press, Berkeley 1986 (first ed. 1973)
Kindleberger, Manias, Panics and Crashes: A History of Financial Crises, Wiley, New York 2010 (first ed. 1978)
Minsky, Can “It” Happen Again? Essays on Instability and Finance, Sharpe, New York1982


C.Philosophy and psychology (very provisional)
Frank, Luxury Fever: Money and Happiness in an Era of Excess, Princeton University Press, Princeton 2010
Freud, Civilization and its Discontent, Norton, New York 2005 (original German ed. 1930)


D. Literature
John Steinbeck, The Grapes of Wrath, 1939 (you can easily find a Penguin edition for $9)
Jonathan Dee, Privileges, Random House, New York 2009
Adam Haslett, Union Atlantic, Talese, New York 2010 (see: http://www.adamhaslett.net)



B.Films
The Grapes of Wrath by John Ford, 1940 (starring Henry Fonda and John Carradine)
(keywords: unemployment, New Deal, inequality and social justice)
-Trading Places by John Landis, 1983 (starring Dan Aykroyd, Jamie Lee Curtis and Eddie Murphy)
(keywords: commodities markets, future markets, insider trading)
-Wall Street by Oliver Stone, 1987 (starring Michael Douglas and Daryl Hannah)
(keywords: Stock Market, SEC, insider trading, greed as a cause of financial crisis)
- Pretty Woman by Gary Marshall, 1990 (starring Richard Gere and Julia Roberts)
(keywords: private equity, real and financial economy, distribution and inequality, wages and capital gains)
Wall Street 2: MoneyNever Sleeps by Oliver Stone, 2010 (starring Michael Douglas, Susan Sarandon and Charlie Sheen)
(keywords: 2008 Stock Market crash, hedge-funds, greed)



B.Blogs (also provisional)

http://www.becker-posner-blog.com/
http://correspondents.theatlantic.com/richard_posner/
http://delong.typepad.com/
http://freakonomics.blogs.nytimes.com/
http://gregmankiw.blogspot.com/
http://www.nakedcapitalism.com/

indicazione agli studenti
Fabio Ranchetti
email: ranchetti@ec.unipi.it
webpage: http://www.dse.ec.unipi.it/persone/docenti/ranchetti_fabio.asp
http://pisa.academia.edu/FabioRanchetti
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