Industry Structure, Strategy, and Public Policy
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| 1John F. Kennedy School of Government
Harvard University BGP-201, Economics 1620
Monday-Wednesday 1:10-2:30 December 10: Subject to Revision
Office: Belfer 416 Telephone: 617 - 495 1154 e-mail: mike_scherer@harvard.edu Office Hours: MW 2:40-4:30.
"The New Iron Age," Fortune, Nov. 14, 2007, pp. 113-124 (E). March 4 Semiconductors. ISSPP, Chapter 6. Kenneth Flamm, "The Microeconomics of Microprocessor Innovation," National Bureau of Economic Research conference paper, www.nber.org/~confer/2007/si2007/ PRB.pdf (E). Richard van Atta and Marion Slusarczuk, "The Tunnel at the End of the Light," Issues in Science & Technology, Spring 2012, pp. 53-60 (E). F. M. Scherer, "Abuse of Dominance by High Technology Enterprises," Journal of Industrial and Business Economics, March 2011, pp. 39-62, HKS Faculty Working Paper RWP10-029 (RF). March 11 Continue Semiconductors. Start Computers. ISSPP, Chapter 7. M. L. Katz and Carl Shapiro, "Systems Competition and Network Effects," Journal of Economic Perspectives, Spring 1994, pp. 93-115 (RP). March 18 Spring Break. March 25 Computers and Beyond. Gerald W. Brock, The Second Information Revolution, Chapter 8 (RP or reading folder R). Annabel Z. Dodd, The Essential Guide to Telecommunications (2012 ed.), pp. 4-19 and 305-335 (E?, Reading Folder in Library). Preview ISSPP, pp. 357-362. "The Patent, Used as a Sword," New York Times, October 8, 2012, pp. A1, 14, and 15 (E). April 1 Automobiles. ISSPP, Chapter 8. Studs Terkel, Working, pp. 159-168 and 187-194 (R or R folder). Steven Rattner, "The Auto Bailout: How We Did It," Fortune, Nov. 9, 2009, pp. 55-71 (E). "Rising from the Ashes in Detroit," The Economist, August 19, 2010, pp. ---- (E). April 8 Automobiles (Continued). Ian Parry et al., "Automobile Externalities and Policies," Journal of Economic Literature, June 2007, pp. 373-399 (RP). Christopher Knittel, "Reducing Petroleum Consumption from Transportation," Journal of Economic Perspectives, Winter 2012, pp. 93-118 (RP). U.S. Environmental Protection Agency, "EPA and NHTSA Finalize Historic National Program to Reduce Greenhouse Gases and Improve Fuel Economy," April 2010 (RP), plus U.S. White House, "Obama Administration Finalizes Historic 54.5 MPG Fuel Efficiency Standards," in-class handout. C. J. Kahane, "Vehicle Weight, Fatality Risk and Crash Compatibility of Model Year 1991-99 Passenger Cars and Light Trucks," National Highway Traffic Safety Administration Technical Report (October 2003), pp. vii-xxi (RP). April 15 Pharmaceuticals: Domestic. ISSPP, Chapter 9. F. M. Scherer, "Pharmaceutical Innovation," in Bronwyn Hall and Nathan Rosenberg, eds., Handbook on the Economics of Innovation (2010), vol. I, pp. 539-574 (R). Ernst Berndt, "Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price," Journal of Economic Perspectives, Fall 2002, pp. 45-66 (RP). Sam Peltzman, "By Prescription Only ... or Occasionally," Regulation, 1987, no. 3/4, pp. 23-28 (E). Apr. 22 Pharmaceuticals: International. Judith Wagner and Elizabeth McCarthy, "International Differences in Drug Prices," Annu. Rev. Public Health (2004), pp. 475-495 (E). Michael Kremer, "Pharmaceuticals and the Developing World," Journal of Economic Perspectives, Fall 2002, pp. 67-90 (RP). Gardiner Harris, "The Safety Gap," New York Times Magazine, Nov. 2, 2008, p. M46 (E). Bill Gates, Address before the 2005 World Health Assembly (May 2005), pp. 1-8 (E). Apr. 29 Beer. ISSPP, Chapter 10. "The Plot To Destroy America's Beer," Bloomberg Businessweek, October 29, 2012, pp. 64-71. May 3-17 Take-home final examination, date to be determined; term papers due May 10. Policy Paper Topics (Due Date) 1. Malthus Revisited (February 20). In the next four decades the world's population is expected to increase by approximately 2.5 billion individuals. Meanwhile, climate change threatens to aggravate drought conditions in some farming areas, flood others, and to reduce the flow of snow runoff to California's bountiful Central and Imperial Valleys. What agricultural policy changes should the United States, Europe, Japan, and other wealthy areas adopt to cope with future food challenges? 2. The Great Game III (February 27). Oil and gas without economical transportation are of limited value. There are huge reserves of oil and natural gas in the nations surrounding the Caspian Sea. Most of the pipelines serving Europe extend from, or pass through, Russia, giving Russia a near-monopoly over transit prices. There have been significant conflicts between Russia on one hand and Ukraine and Belarus on the other over gas prices and transit charges, leading the Russians to build a new pipeline across the Baltic Sea to Germany, bypassing Ukraine and Belarus. To break Russian gas transit dominance from the Caspian, European Union nations agreed in May 2009 to support investment in the (yet-incomplete) Nabucco pipeline across Georgia to Turkey and then southeastern Europe. It is believed that the Russian invasion of Georgia in 2008 was a warning shot to discourage that effort. Meanwhile, in December 2009 a big new pipeline from the Caspian to China was opened. How should these potential sources of international conflict be sorted out? For general background, see Steve LeVine, The Oil and the Glory, especially Chapters 19 and 20, plus contemporary accounts on the Nabucco, North Stream, South Stream, and (on oil) Tengiz pipeline projects. 3. Energy Independence? (February 27) "Fracking" (hydraulic fracturing) -- i.e., extracting natural gas from tightly-packed shale deposits far below the earth's surface -- has engendered radical increases in U.S. natural gas supplies, but poses potential danger to drinking water sources and above-ground environmental pollution problems. Extracting crude oil from underground shale strata poses similar opportunities and challenges. What should be the U.S. policy toward continuing expansion of these energy resources? See e.g. "An Unconventional Bonanza," The Economist, July 14, 2012 and "Energy To Spare," The Economist, Nov. 17, 2012, p. 63 (E), plus "The Sands of Grime," The Economist, Nov. 17, 2012, p. 62 (E). 4. Steely Nerves Required. (March 11) In 2009, 46 percent of the world's steel output came from greatly expanded Chinese installations. The world's largest single steel-making company is London-based Arcelor Mittal, whose bonds were downgraded to "junk" status in November 2012. See e.g. Bloomberg Business Week, Nov. 14, 2011, p. 27 (E). It is expected that China's huge apartment and road building programs will ebb in the near future, freeing substantial capacity for exports. How should the world's nations react to a surge of exported Chinese steel? 5. Intel an Illegal Monopolist? (March 27). Intel was fined 1.06 billion Euros on May 12, 2009, by the European Commission on monopolization grounds charged with monopolization by the New York State attorney general's office on November 5, 2009, and settled for $1.25 billion a law suit of longer standing with Advanced Micro Devices Inc. on November 12, 2009. In August 2010, the U.S. Federal Trade Commission announced a settlement of its own sweeping antitrust complaint. What did Intel do to warrant such "piling on"? Should its role as a U.S. technology leader be viewed as a valid defense? How would you have changed any of the challenges? 6. The Auto Industry Bailout (April 10). Should the U.S. government have transferred more than $65 billion to rescue General Motors and Chrysler from liquidation? Why, or why not? (Please exclude as a reason "because it helped re-elect Barack Obama.) 7. Miles per Gallon. (April 17) Will the U.S. auto suppliers (including foreign companies) be able to sustain profitability and at the same time respond to demands that they increase fleet average miles per gallon from 27.5 to 54.5 by 2025, among other things by downsizing their offerings? How will U.S. consumers adapt to the changes? 8. Generic Drugs (April 24). The 1984 Hatch-Waxman Act made it much easier to obtain approval of generic drug substitutes once relevant patents expire, and the fraction of prescriptions filled generically in the United States has escalated to 70 percent. A Paragraph IV of Hatch-Waxman allows would-be generic makers to challenge in court the unexpired patents covering a branded drug, and confers on the first such challenger a six-month head start over other generic makers. The producers of patented drugs have in turn paid handsome sums to the first challengers to withdraw their suits and defer entry, which thereupon retards the entry of other generics until patents expire. The legality of such buyouts will be argued in 2013 before the Supreme Court. What should be done? See the Federal Trade Commission Report, Generic Entry Prior to Patent Expiration (2002) (E); and Daniel Crane, "Patent Settlements," in Issues in Competition Law and Policy, vol. 3, pp. 2109-2125 (2008) (R folder). 9. Alleviating Disease in the Third World (May 1). Sixty percent of the world's population lives in nations with GDP per capita of less than $1,000. Disease is a major contributor to poverty. What measures would you recommend to increase the supply of life-saving drugs and vaccines to the world's poorest citizens? Explain why your choices will be efficacious. In addition to the Kremer article, see Ruth Levine et al., Making Markets for Vaccines: Ideas to Action (Center for Global Development: 2005) (E). Directory: syllabus -> 2012 syllabus -> Catalog description syllabus -> MA180 and ma418 statistics, Fall 2012 syllabus -> Engineering Design and Sustainability syllabus -> Principles and Algorithms of Computer Vision 2012 -> 408ADialects 2 Units Fall 2012 Monday/Wednesday 10: 30 to 11: 20 a m 2012 -> 408ADialects 2 Units Fall 2012 9 a m. Monday/Wednesday 2012 -> John F. Kennedy School of Government, Harvard University Spring 2012 ped-308: Social Institutions and Economic Development 2012 -> Draft copy only Download 43.84 Kb. Share with your friends:
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