FOREIGN SERVICE ECONOMIC/COMMERCIAL STUDIES PROGRAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-04488A000200160016-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 21
• Document Creation Date: December 12, 2016
• Document Release Date: July 24, 2000
• Sequence Number: 16
• Publication Date: November 1, 1970
• Content Type: SUMMARY

fS
DEPARTMENT Of STATE
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FOREIGN SER VICE INSTITUTE
FOREIGN SERVICE ECONOMIC/COMMERCIAL STUDIES
Program Description
and
Selected Bibliography
Coordinator, Division of Economic and Commercial Studies:
Warrick E. Elrod, Jr.
Chairman, Foreign Service Economic Studies:
Harold E. Fassberg ?-- 7Ui,
Program Assistant, Division of, Economic and Commercial Studies:
) (15X)(XXI f Marie Burba
November 1970
MW
/111)/10 25
rrn ,
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State Dept. declassification & release instructions on file
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FOREIGN SERVICE ECONOMIC/COMMERCIAL STUDIES.
The Foreign Service Economic/Commercial Studies is an
intensive and comprehensive program of economic training
designed to give participants the equivalent of a strong
undergraduate major in economics with additional professional
instruction in commercial subjects. The twenty-six week
session, held twice a year, is divided into three seven-week
terms for economics in twelve subjects and a four-week term
covering four commercial subjects. Participants are care-
fully selected on the basis of demonstrated ability to do
mature academic work, on the basis of their record in the
Foreign Service or other government agency, and on their
motivation. A professional faculty, representing universities
both in and outside the Washington area, conduct the courses.
Instruction is oriented to the needs of the Foreign Service
and is designed to qualify the participants to fill a broad
range of positions in the field and in Washington.
For some years, there has been a shortage of Foreign
Service officers with economic training. This shortage
results from the fact that the number of officers entering
the Service who have economic training is inadequate to meet
the needs of the Service. The Department requirements for
economic officers were the subject of a study by a task force
in which all of the bureaus having substantive responsibilities
in the economic field participated. This study indicated
that despite the excellence of the present university train-
ing program, it was not sufficient to meet the Department
requirements and that it would be necessary substantially
to increase the level of training. The Foreign Service
Economics Studies, an intensive course of basic training in
economics at FSI, was therefore designed as a principal step
in meeting the needs shown by the task force study. In the
July 1970 program the period was extended to 26 weeks to
permit implementation of the Secretary's directive that
professional training be offered to make Foreign Service
Officers more responsive to the needs of American business
abroad.
University economic training is available for those
fully qualified to do graduate work in the field. University
training assignments are limited to officers who have an
undergraduate major in economics or its equivalent and who
have demonstrated a capacity to do economic work of high
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quality by superior performance on the"job. For the purpose
of selection of officers for advanced study at a university,
satisfactory completion of the Foreign Service Economic
Studies program at FSI will be considered as the equivalent
of an undergraduate major in economics. University training
at outstanding schools of business administration is now
available to officers whose interests are primarily in
commercial/business work. The same high standards of UET
selection prevail for officers seeking assignment to graduate
business administration.
The program of studies is divided into three sessions
of approximately seven weeks each and a fourth session of
approximately four weeks. The courses offered, which
constitute a unified study program are as follows:
First Session
Economic Analysis
National Income Accounts
Mathematics and Statistics
Development of Economic Thought (six lectures)
Money and Banking
Public Finance
International Economics I: Introduction; Trade Theory
and Policy
Introduction to Strategy, Game Theory and Decision
Making
Third Session
The American Economy
International Economics II: Balance of Payments;
Finance Theory and Policy
Economic Growth and Development
Foreign Service Economic Reporting
Applied Econometrics: Collectivist and Market Systems
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Fourth Session
International Marketing
International Corporate Financing
Multinational Corporation Operations
International Business Environment and Public Policy
In the last two weeks of the Third Session the class is
divided into seminar groups where students prepare and
present papers on opposing sides of topics in international
finance, economic development and comparative systems. In
these seminars emphasis is placed upon the students' ability
to handle with rigorous analysis crucial aspects of topics
which are of major,current importance.
Classes are limited to a maximum of 25 participants
drawn primarily from FSO Classes 4 to 6, or the equivalent.
Prerequisites for acceptance are a superior performance
record as a Foreign service officer and career interests
which require a sound foundation in economics. Preference
is given to officers who have demonstrated an aptitude for
economic work. While the program is designed particularly
to meet the requirements of the Foreign Service, a small
number of places will be reserved for officers from other
agencies who intend to work in the field of international
economic relations.
Officers desiring to be considered for assignment to the
program should make their interest known by letter addressed
to the Executive Director of the Bureau to which they are
assigned, sending copies to the Chief, Mid-Career Personnel
Division, and the Coordinator, Economic and Commercial Studies,
Foreign Service Institute. Transcripts of all the officer's
previous college and university work should also be sent to
FSI, but need not accompany the copy of the letter.
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COURSE DESCRIPTION AND BIBLIOGRAPHY
First Term
This course is given in two-hour sessions five times a
week for seven weeks, or a total of seventy hours. Emphasis
is placed upon training to think analytically in the fields
of microeconomics and macroeconomics. Special emphasis is
placed upon the mastering of basic theoretical economic
concepts, fundamental analytical tools, and facility in using
various techniques of analysis.
Main Text:
Paul E. Samuelson, Economics, 8th Edition (McGraw-Hill)
Required Readings:
Richard H. Leftwich, The Price System and Resource
Allocation, 4th Edition (Holt-Rinehart-Winston)
Joseph P. McKenna, Aggregate Economic Analysis,
Revised Edition (Holt-Rinehart-Winston)
Robert L. Heilbroner, The Making of Economic Society,
(Prentice-Hall)
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-5-
NATIONAL INCOME ACCOUNTS
This course is given in two-hour sessions held twice
a week for five weeks, or.a total of twenty hours. Emphasis
is on understanding the various ways of computing national
income accounts and on developing, the ability to interpret
accounts as required in most economic reporting assignments
abroad and in Washington. Exercises are designed to develop
the student's ability to organize, interpret, and evaluate
national accounts wherever he may be assigned.
Main Text:
Samuel Rosen, National Income, (Holt-Rinehart-Winston)
Required Readings:
U.S. Department of Commerce, Office of Business Economics.
U.S._ Income and Output, a supplement to the Survey of
Current Business, 1958. (Washington: U.S. Government
Printing Office, 1959).
U.S. Department of Commerce, Office of Business Economics.
National Income, a supplement to the Survey of Current
Business, 1954. (Washington: U.S. Government Printing
Office, 1954).
U.S. Department of Commerce, Office of Business Economics.
"The National Income and Product Accounts of the U.S.:
Revised Estimates, 1929-64." Survey of Current Business,
August 1964.
United Nations. A System of National Accounts and
Supporting Tables, United Nations, 1968.
OEEC: A Standardized system of National Accounts,
1968 Edition, Paris: Organization for European
Economic Cooperation, 1969.
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MATHEMATICS AND STATISTICS
This course is given in two-hour sessions twice a week
for seven weeks, or a total of twenty-eight hours. The
first few sessions are devoted to a review of mathematical
principles in order to enable the student to advance more
meaningfully in the field of statistics and also to under-
stand in greater depth concepts taught in the Economic Analysis
and other courses. Primary emphasis is placed upon the
participants developing the ability to evaluate and interpret
statistical data and to conduct statistical studies in those
areas pertinent to Foreign Service economic work. A weekly
lab is held in which the students analyze with an assistant
their work on statistical problems. The principal emphasis
of the course is not on the development of a professional
understanding of statistical theory but on the advancement
of the officer to a high level of ability to use and interpret
statistics as required in his various assignments.
Main Text:
Richard Varnett, Elementary Algebra (Schaum)
Frank Ayers, Jr., Calculus (Schaum)
Alder & Roessler, An Introduction to Probability
and Statistics (Freeman)
Michael J. Brennan, Preface to Econometrics, 2nd
Edition, (South-Western)
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INTRODUCTION TO STRATEGY, GAME THEORY AND DECISION MAKING
This course is designed to increase the students'
effectiveness in making decisions under varying conditions
of uncertainty. Students will develop the framework for
economic, political, diplomatic or military games, and access
to modern computers will give the students the opportunity
to become informed of the role of electronic computers in
decision making and to be instructed in the use of computer
runs in testing their decisions. Actual negotiating situa-
tions will be analyzed and decisions reached by usual
approaches will be compared to those reached by use of the
latest techniques in the fields of game theory and strategy.
Main Texts:
Alder & Roessler, An Introduction to Probability and
Statistics., (Freeman)
Seymour Lipschutz, Theory and Problems of Finite
Mathematics, (Schaum)
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This course is held in two-hour sessions meeting twice
a week for seven weeks, or a total of twenty-eight hours.
Emphasis is placed upon understanding the role of money in
the modern economy, both developed and developing, the role
of the central bank, the relations of the central bank with
the commercial banking system, and the significance of money
and banking in the development of economies, with particular
reference to their role in policy implementation which may
be either inflationary or deflationary.
Shapiro, Solomon & White, Money and Banking
(Holt-Rinehart-Winston)
Required Readings:
Federal Reserve System - Purposes and Functions
(Federal Reserve Board)
Federal Reserve Bulletin - various issues.
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-9-
This course is held in two-hour sessions meeting twice
a week for seven weeks, or a total of twenty-eight hours.
Emphasis is placed upon understanding various aspects of
fiscal policy, which includes the study of national budgets,
tax policy, relations of budgets to national income and
balance of payments, with certain. foreign country examples
used in the latter part of the course to acquaint the student
with the kinds of data he may expect to handle on foreign
assignments.
Davie & Duncombe, Modern Political Arithmetic
(Holt-Rinehart-Winston)
John F. Due, Government Finance: Economics of the
Public Sector (Irwin)
Required Readings:
Robert Dorfman, Editor, Measuring Benefits of Government
Investments, Studies of Government Finance (The Brookings
Institute)
Warren L. Smith and Ronald L. Tiegen, Readings on
Money, National Income and Stabilization Policy,
(Irwin)
The Economic Report of the President
The Budget of the U.S. Government (U.S. Bureau of the
Budget)
Joint Tax Program,
Papers
and Proceedings of a
Conference, Fiscal
Policy
for Economic Growth in
Latin America, (The
Johns
Hopkins Press)
Scherer and Papke,
Public Finance and Fiscal Policy
(Houghton-Mifflin)
Mancur Olson, The Logic of Collective Action (Schocken)
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INTERNATIONAL ECONOMICS I: INTRODUCTION; TRADE THEORY AND
POLICY
This course is held in two-hour sessions meeting three
times a week for seven weeks, or a total of forty-two hours.
The course seeks to strike an appropriate balance between
international trade theory and analysis and international
trade policy. Particular emphasis is placed upon those areas
of international trade policy which are of greatest interest
to officers serving abroad or in specialized areas of a
Washington agency. Among the fields covered are tariff
policy, regional groupings, foreign aid, and international
resource policy.
Main Texts:
Imanuel Wexler, Fundamentals of International Economics
(Random House)
Charles P. Kindleberger, International Economics, 4th
Edition (Irwin)
Gerald M. Meier, The International Economies of
Development (Harper and Row)
Required Readings:
Charles P. Kindleberger,Foreign Trade and the National
Economy (Yale University)
J.E. Meade, The Theory of Customs Unions (North-Holland
Publishing Co.)
William E. Haviland, International Commodity Agreements
(Planning Association of Canada)
Selected readings from Economic Journals, studies and
special reports as appropriate.
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Third Term
THE AMERICAN ECONOMY
This course consists of ten lectures of two hours each
given over a seven-week period, or a total of twenty hours.
Emphasis is placed upon giving the student a broad survey
of the historical and institutional development of the
American economy with particular emphasis upon those aspects
of the American economy which the student may most often
find among topics of discussion either at a foreign post or
in Washington. Emphasis is placed upon the role of ideas in
the development of the American economy, the American philosophy
of competition, the role of labor, the American corporation,
American agriculture, and the American social structure as it
influences, and is influenced by, economic institutions.
Main Texts:
J.K. Galbraith, The Great Crash (Houghton-Mifflin)
R. Heilbroner, The Limits of American Capitalism
(Harper and Row)
Edmund Phelps, Problems of the Modern Economy
(Norton)
Walter Heller, New Dimensions of Political Economy
(Norton)
Arthur Okun, The Political Economy of Prosperity
(Norton)
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ECONOMIC GROWTH AND DEVELOPMENT
This course is held in three two-hour sessions per week
for seven weeks, or a total of forty-two hours. The course
emphasizes various theories of development. The course
analyzes not only the economic but also the political,
social, cultural, institutional, religious, and other
aspects of a society as they influence economic growth and
development. Two or more case studies, from various areas
of the world, are used in the course to illustrate the
realities and problems of development as actually experienced
in the respective economies.
Main Texts:
Benjamin Higgins, Economic Development, Revised
Edition, (Norton)
W. Arthur Lewis, Theory of Economic Growth
Required Readings:
Robert L. Heilbroner, The Great Ascent (Harper Torchbook)
Charles Meier, Leading Issues in Development Economics
(Oxford Press)
Theodore Schultz, Transforming Traditional Agriculture
(Yale University Press)
Case Materials assigned to support specific case.
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INTERNATIONAL ECONOMICS II: BALANCE OF PAYMENTS, FINANCE
THEORY AND POLICY
This course is given in three two-hour sessions per week
for seven weeks, or a total of forty-two hours. The course
consists of a comprehensive study of the meaning and role of
international finance, including its relation to international
trade and to domestic finance, the financial significance
of the balance of payments, international financial operations,
international liquidity and its components, proposed reforms
of the international monetary structure, exchange and other
financial controls adopted by trading countries with their
effects of international trade, the role of the dollar in
international. trade, etc. The various international financial
institutions are studied so that the student will develop a
knowledge of those organizations with which he may be called
upon to cooperate in the future.
Main Texts:
Charles Kindleberger, International Economics (Irwin)
Leland B. Yeager, International Monetary Relations
(Harper and Row)
Delbert A. Snider, International Monetar Relations
(Random House)
E. Marcus and M.R. Marcus, International Trade and
Finance (Pitman Publishing Co.)
William Scammell, International Monetary Policy,
2nd Edition, (MacMillan Co.)
Report of the Review Committee for Payments Balance
Statistics. The Balance of Payments Statistics of
US - a review and appraisal. Bureau of the Budget
(Government Printing Office)
Selected Readings from Joint Economic Committee;
Federal. Reserve; US Treasury; Princeton Series on
International Finance.
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FOREIGN SERVICE ECONOMIC REPORTING
This course is given in two-hour sessions held once a
week during the third term, or a total of fourteen hours.
Emphasis is placed upon the relation of economic analysis to
meaningful economic reporting, the sources and use of data
essential to quality reporting, the structure of economic
reporting, and its significance in influencing the deter-
minations of policy.
Main Texts:
Foreign Service Manual - Section on Economic/
.Commercial Reporting
Selected economic and commercial reports from the
field
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This is the third and last in a sequence of courses in
mathematics and statistics and is given in two two-hour
sessions for seven weeks. Using tools and techniques of
analyses developed in the two previous courses econometric
models are developed as a means of providing a broad frame-
work within which to explore the implications of assumptions
and alternative economic policies. Three models--one of
the US representing a market economy, one representing the
USSR for a collectivist economy and one for Israel repre-
senting a mixed economy--will be analyzed in detail as a
means of showing the essential differences in the three
types of economies. Models of Yugoslavia and Mainland
China are also 'studied.
Main Text:
Michael Brennan, An Introduction to Quantitative
Methods in Economics, (South-Western)
Supplementary Material:
Special Reports presenting econometric models of the
US, USSR, and Israel.
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This segment of the course which follows the 22 weeks
of economic studies is designed to give participants in the
program a professional and sophisticated understanding of
the problems of American business abroad, to give partici-
pants an understanding of the terminology of American
business operations, and to develop both a theoretical and
practical framework in the following four courses of study.
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Fourth Term
INTERNATIONAL MARKETING
This course is given in ten two-hour sessions and is
designed to increase the knowledge of participants in the
course of the problems and techniques of international
marketing with special attention to foreign marketing
operations of US firms, with particular emphasis upon
marketing operations to expand US foreign trade and contribute
to improvement in the US balance of payments.
Fayerweather, International Marketing (Prentice-Hall)
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INTERNATIONAL CORPORATE FINANCING
'!'his course is given in ten two-hour sessions with its
main purpose being to give the participant an understanding
of the problems of corporate financing and the means that
US businesses use to finance international operations. It
is patterned on courses-in corporate financing in leading
business schools and is integrated with the participants
previous training in the courses in international finance.
Texts:
Johnson, Financial Management (Allyn & Bacon)
Zenoff & Zwick, International. Financial Management
(Prentice-Hall)
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MULTINATIONAL CORPORATION OPERATIONS
This course is offered in a series of seminars conducted
by outstanding experts on the multinational corporation from
such schools as Harvard, MIT, and The New School for Social
Research. The purpose of the course is to give participants
a technical and practical framework with which to analyze
what appears to be major changes in the organization of
international business operations.
Robinson, International Business Policy, (Holt-Rinehart-
Winston)
Robinson, International Management, (Holt-Rinehart-
Winston)
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INTERNATIONAL BUSINESS ENVIRONMENT AND PUBLIC POLICY
This course is offered through a series of seminars
offered by outstanding experts who cover such vital topics
as:
1)
"The Legal and Tax Framework of Business
Operations Abroad"
2)
"The Problems of Regulated Industries in Their
Foreign Operations"
3)
"US Anti-Trust Legislation and US Business
Operations Abroad"
4)
"US Public Policy and
of American Firms"
International Operations
Readings in this course will be the personal selections
of the individual speakers.
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