International Monetary Economics

Abstract

What determines the foreign exchange rate in the short- and long-term? What are the effects of monetary and fiscal policy in an open economy? What drives a country's choice of the foreign exchange rate regime and why are some countries more prone to financial crises than others? A number of simple theoretical frameworks will be developed that allow us to discuss recent economic policy issues.

Objective

The core objective of the course is to develop simple macroeconomic models of open economies that can be usefully applied to international economic phenomena ranging from global financial imbalances, the Chinese exchange rate regime, the European Monetary Union, reform proposals for the international financial architecture, to global financial crises.

Content

This course focuses on the determinants of exchange rates and the interpretation of exchange rate movements in a framework of open economies, through an in-depth analysis of the most important models on the issue. Firstly, it familiarizes the students with exchange rates regimes and key concepts in balance-of-payments accounting, to afterwards outline the different macroeconomic models for open economies. The main goal of the course is to provide students with analytical and theoretical tools for the interpretation of exchange rate dynamics and the understanding of fiscal and monetary policy effects, as well as the integration of an empirical analysis of the named models.

Resources