Economics | Open Economy Macroeconomics
E629 | 1752 | von Furstenberg
Economics , Open Economy Macroeconomics (International Finance)
E629 , 1752 , von Furstenberg
Preparation recommended: E622 or equivalent
Assignments (modeling experience or problem solving) 20-40%
Midterm examination or equivalent 20%
Final examination 40-60%
Course content: The course will first introduce the student to
international accounting frameworks, basic data, and descriptive and
analytical measures used in international finance. It will then focus
on the following main topics:
(1) Open-Economy Modeling: The Mundell-Fleming Model and its
(2) The Model under Various Exchange Arrangements, including Monetary
(3) The Model with Price Flexibility and Forward-Looking Expectations.
(4) Perspectives on Exchange Behavior and Long-Run Purchasing-Power
(5) The Intertemporal Approach to the Current Account.
(6) International Finance: International Capital Mobility and
(7) Capital Surges, Currency Crisis, and Collapses.
(8) The International Financial System.
(9) Financial Development and International Investment and Portfolio
(10) Price Relations in Foreign Exchange Markets and with Financial
Derivative (Futures and Options).
A summing up will appraise the relation between international finance,
economic growth and stability, and the welfare of nations.
Background text, on reserve: Maurice Obstfeld and Kenneth Rogoff:
Foundations of International Macroeconomics, Cambridge: MIT Press,
1996 and four others: Maxwell J. Fry: Money, Interest, and Banking in
Economic Development, 2nd ed., Johns Hopkins, 1995; J. Orlin Grabbe:
International Financial Markets, 3rd ed., Prentice-Hall, 1996; A.J.
Makin: International Capital, Mobility and External Account
Determination, St. Martin's Press, 1994; and Handbook of International
Economics, Vol. III, Gene M. Grossman and Kenneth Rogoff, eds.,