Balance of payments, adjustment mechanisms, and international monetary systems.
This course covers the macroeconomic side of international economics. You will explore in detail the functioning of international financial markets. The first part of the course is all about exchange rate and introduces the key macroeconomic quantities: the national and international accounts and the balance of payments. The last part confronts the role of policy and applications of international macroeconomics.
By the end of class you should be able to:
- explain the basic theory of exchange rates including a discussion of the monetary approach and asset approach to the determination of exchange rates;
- discuss external wealth and valuation effects;
- explain the key macroeconomic quantities: the national and international accounts and the balance of payments;
- evaluate one of the major policy issues in international finance, the choice of fixed versus floating exchange rates;
- analyze exchange rate crises, common currencies with particular focus on the euro, the failures of uncovered interest parity and purchasing power parity, the debate over global imbalances, and the problem of default.
ECON 304 (Intermediate Economics)
Textbooks and Materials
- International Economics - Loose Leaf
Krugman, Paul R.; Obstfeld, Maurice; and Melitz, Marc
- International Economics: Theory and Policy, 11th Ed.
Krugman, Paul R., Obstfeld, Maurice, and Melitz, Marc
Textbooks and materials can be purchased at the CSU Bookstore unless otherwise indicated.