Кто читает:: Факультет мировой экономики и мировой политики

Статус:: Курс обязательный

Когда читается:: 3-й курс, 1, 2 модуль

Преподаватель

Гусева Ольга Александровна

Full Syllabus

Abstract

This course aims to explore the important concepts and major issues in open macroeconomics such as the determination of exchange rates and how economic policies work in an open economy with free trade of goods and asset. The study of International Finance involves open economy issues such as the balance of payments, interest parity as an equilibrium condition for foreign exchange market, purchasing power parity describing the long-run behavior of exchange rates and the transmission mechanism of monetary and fiscal policies from the perspective of open-economy general equilibrium. Student who successfully completes this course will have their own logic and way of thinking to come to a conclusion on various issues in open economy.

Learning Objectives

To understand major concepts frequently used to analyze the dynamics of open economy and evaluate how effective monetary and fiscal policies are as an economist based on the theories of open macroeconomics
To understand intermediate analytical instruments of economics such as graphs and figures describing the general equilibrium of open economy, and basic calculus tools describing economic variables such as exchange rates, interest rates and inflation rate are inter-related in an open economy

Expected Learning Outcomes

To be able to intuitively figure out the implications of current economic issues from recent news articles
To be able to mathematically describe the equilibrium in various markets in an open economy
To be able to graphically describe how all economic variables are inter-related and how policy changes are transmitted through the open economy

Course Contents

National Income Accounting for an Open Economy
Subject National Income Identity for an Open Economy; Topics - GDP vs GNP - Saving, Fiscal Deficit and the Current Account - Twin Deficits in the U.S. Economy and Global Imbalance - Sub-prime Mortgage Crisis and the Great Recession - Twin Deficit theory in Europe and the Ricardian Equivalence
The Balance of Payments Accounts
Subject Implications of the Balance of Payments Accounts on the Open Economy Topics - The Fundamental Balance of Payments Identity - The Current Account Balance and the Financial Account - What the Official Settlements Balance implies on the Small Open Economy - The Macroeconomic Implication of Net International Investment Position
Foreign Exchange Market I: The Role of FX Market
Subject Understanding the Characteristics of Foreign Exchange Market Topics - The Role of Foreign Exchange Markets in the Global Marketplace - The Spot Market for Foreign Exchange - Foreign Exchange Risk and the Forward Exchange Market for Foreign Exchange - Relationship between the Spot Market and the Forward Market - Forward-Looking Market Instruments
Foreign Exchange Market II: Interest Rate Parity
Subject An Asset Approach to the Exchange Rate Determination Topics - The Demand for and Supply of Foreign Currency Assets - Uncovered Interest Rate Parity - The Forward Exchange Market and Covered Interest Rate Parity - Are Foreign Exchange Markets Efficient? - The Efficient-Markets Hypothesis
Money, Interest Rates and Exchange Rates
Subject Asset Market, Interest Rates and Exchange Rates Topics - Portfolio Choice over Monetary Asset and Non-Monetary Asset - Aggregate Money Demand and Money Supply - Simultaneous Equilibrium in the Money Market and Foreign Exchange Market - Relationship between Money and Prices in the Short-Run and Long-Run - Exchange Rate Overshooting
The Exchange Rate in the Long Run I: Purchasing Power Parity
Subject Purchasing Power Parity (PPP) Topics - The Law of One Price and PPP - The Monetary Approach to the Exchange Rates - PPP as a Long-Run Determinant of Exchange Rates - Overvalued and Undervalued Currencies
The Exchange Rate in the Long Run II: Real Exchange Rate
Subject Real Exchange Rate Topics - Determination of the Long-Run Real Exchange Rate - Real Exchange Rate as a Long-Run Determinant of Nominal Exchange Rate - Real Interest Rate Parity
The Exchange Rate in the Short Run I: Keynesian Approach
Subject Short-Run Equilibrium for an Open Economy in the Keynesian Model Topics - Output Market Equilibrium in the Short Run (The DD Curve) - Asset Market Equilibrium in the Short Run (The AA Curve) - Keynesian Adjustment Process for the General Equilibrium in the Open Economy - Policy Analysis for an Open Economy
The Exchange Rate in the Short Run II: Macroeconomic Policy
Subject Short-Run Equilibrium for an Open Economy in the Keynesian Model Topics - The J-Curve Effect - Marshall-Lerner condition - Exchange Rate Pass-Through - Liquidity Trap in an Open Economy
Fixed Exchange Rates I: Foreign Exchange Intervention
Subject Policy Analysis under Fixed Exchange Rates and Foreign Exchange Intervention Topics - Monetary Policy under Fixed vs Floating Exchange Rates - Fiscal Policy under Fixed vs Floating Exchange Rates - Sterilized Intervention
Fixed Exchange Rates II: Balance of Payment Crisis
Subject Fixed Exchange Rates and Balance of Payments Crisis Topics - Self-Fulfilling Currency Crises - Capital Flight - Policy Responses to Financial Crises
Determinants of the Balance of Trade and Payments
Subject Various Approaches to the Balance of Trade and Payments Topics - Elasticities Approach to the Balance of Trade - Elasticities, J-Curve, Pass-Through Analysis, and Marshall-Lerner Condition - Absorption Approach to the Balance of Trade - Monetary Approach to the Balance of Payments
International Monetary Systems I: Past to Present
Subject Exchange Rate Systems: Past to Present Topics - The Gold Standard as an Exchange Rate System - The Interwar Period - The Bretton Woods System - Post Bretton Woods: 1973 to the Present
International Monetary Systems II: International Policy Coordination
Subject Internal vs External Balance and International Policy Coordination Topics - Internal Balance vs External Balance - Tinbergen’s Rule and Swan Diagram - Macroeconomic Interdependence among Open Economies - International Policy Coordination

Assessment Elements

Midterm exam
Attendance and participation
Assignment
Final Exam

Interim Assessment

Interim assessment (2 module)
0.1 * Assignment + 0.1 * Attendance and participation + 0.4 * Final Exam + 0.4 * Midterm exam

Bibliography

Recommended Core Bibliography

Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics: Theory and Policy, Global Edition (Vol. Eleventh edition). New York: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1649946

Recommended Additional Bibliography

Melvin, M. (2012). International Money and Finance (Vol. 9th ed). San Diego: Academic Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1204281

Бакалаврская программа «Программа двух дипломов НИУ ВШЭ и Университета Кёнхи «Экономика и политика в Азии»»

International Finance