International Economics II: International trade and finance theories and practice; foreign exchange rates, fiscal instruments and markets; alternative international currency systems and reformation proposals; the economics of currency, and financial instruments in futures markets.
Comprehending the causes and consequences of international trade for business acting at an international level, specific concepts such as fair trade, sustainable trade, distributional consequences of trade (inequality, structural adjustments, etc.).
| Week | Topics |
|---|---|
| 1 | Money, Interest Rates and Exchange Rates (Chap. 15) --- Money demand for individuals and institutions is primarily determined by interest rates and the need for liquidity, the latter of which is influenced by prices and income. Aggregate money demand is primarily determined by interest rates, the level of average prices, and national income. Page (414-448) |
| 2 | Money, Interest Rates and Exchange Rates (Continue) (Chap. 15) --- Aggregate demand of real monetary assets depends negatively on the interest rate and positively on real national income. Page (414-448) |
| 3 | The International Monetary System, 1870-1973 (Chap. 19) --- Internal balance means that an economy enjoys normal output and employment and price stability. Page (579-641) |
| 4 | The International Monetary System, 1870-1973 (Continue) (Chap.19) --- External balance roughly means a stable level of official international reserves or a current account that is not too positive or too negative. Page (579-641) |
| 5 | Macroeconomic Policy and Coordination under Floating Exchange Rates (Chap. 14) --- Arguments for flexible exchange rates are that they grant monetary policy autonomy, can stabilize the economy as aggregate demand and output change, and can limit some forms of speculation. Page (378-413) |
| 6 | Macroeconomic Policy and Coordination under Floating Exchange Rates (Continue) (Chap. 14) --- Arguments against flexible exchange rates are that they cause expenditure switching policies, can make aggregate demand and output more volatile because of uncoordinated policies across countries, and make exchange rates more volatile. Page (378-413) |
| 7 | Optimum Currency Areas and the European Experience (Chap. 21) --- The EMS was first a system of fixed exchange rates but later developed into a more extensive coordination of economic and monetary policies: an economic and monetary union. Page (681-719) |
| 8 | Mid-Term Exam |
| 9 | Optimum Currency Areas and the European Experience (Continue) (Chap. 21) --- An optimum currency area is a union of countries with a high degree of economic integration among goods and services, financial assets, and labor markets. Page (681-719) |
| 10 | The Global Capital Market: Performance and Policy Problems (Chap. 8) --- Gains from trade of goods and services for other goods and services are described by the theory of comparative advantage.Gains from trade of goods and services for assets are described by the theory of intertemporal trade. Page (198-242) |
| 11 | The Global Capital Market: Performance and Policy Problems (Continue) (Chap. 8) --- Gains from trade of goods and services for other goods and services are described by the theory of comparative advantage.Gains from trade of goods and services for assets are described by the theory of intertemporal trade. Page (198-242) |
| 12 | Developing Countries: Growth, Crisis and Reform (Chap. 22) --- Many poor countries have extensive government control of the economy, unsustainable fiscal and monetary policies, lack of financial markets, weak enforcement of economic laws, a large amount of corruption, and low levels of education. Page (720-763) |
| 13 | Developing Countries: Growth, Crisis and Reform (Continue) (Chap. 22) --- Many poor countries have extensive government control of the economy, unsustainable fiscal and monetary policies, lack of financial markets, weak enforcement of economic laws, a large amount of corruption, and low levels of education. Page (720-763) |
| 14 | Overview of the term |
| Method | Qty | % Each |
|---|---|---|
| Midterm Exam(s) | 1 | 30 |
| Case Study | 1 | 30 |
| Final Exam | 1 | 40 |
International Economics: Theory and Policy, Paul R. Krugman, Maurice Obstfeld, Pearson Addison-Wesley, 12th Ed. 2022