Lecture and Seminar
1. National Income Accounting and the Balance of Payments
- National Income and Product
- National Income Accounting for an Open Economy
- Balance of Payments Accounts
- Creditor and Debtor Nations
2. Exchange Rates and Foreign Exchange Market
- Exchange Rate Characteristics
- Interest and Purchasing Power Parity
- Interest Rates, Expectations, and Equilibrium
- Money, Interest Rates and Exchange Rates
- Flexible and Fixed Exchange Rates
- Changes in Fiscal and Monetary Policy
3. International Monetary Systems
- Evolution from Gold Standard, Breton Woods, to the Current System
- Financial Globalization
4. Performance of the Global Capital Market
- Currency Areas and the Euro
- Global Capital Flows
- International Financial Crisis
At the end of the course, the successful student should be able to:
1. Critique, and demonstrate an understanding of, the theories of international finance to explain balance of payments and exchange rate determination.
2. Examine and evaluate the role of monetary and fiscal policy on balance of payments and exchange rates.
3. Evaluate the implications of the international monetary system on national incomes and trade flow.
4. Analyze and critique current issues affecting the performance of the global capital markets.
Term tests 25% - 50%
Assignments 10% - 30%
Essay or Research Paper 0% - 30%
Participation 0% - 10%
Final Examination 30% - 40 %
Total 100%
(No individual test or assignment can exceed 40%.)
The textbook is to be chosen from the following:
Gerber, J. International Economics, Latest editon, Addison Wesley Pearson
Husted, S., et al. International Economics, Latest edition, Addison Wesley Pearson
Krugman, P., et al, International Finance; Theory and Policy, Latest edition, Addison Wesley Pearson
or textbook as approved by the Economics department.