Course: International Macroeconomics and Finance (5201-231)

Persons:

• Prof. Dr. Michael Evers (verantwortlich)

Type of Course:

lecture with exercise

In-Class Hours Per Week:

3

Contents:

The course provides an introduction to the main concepts of modern open-economy macroeconomics. It will cover issues like the balance of payments and the current account, nominal and real exchange rates, exports and imports, and economic activity.
The course develops a unifying model of open-economy macroeconomics that provides students with a simple yet coherent framework to discuss current macroeconomic issues such as monetary and fiscal policy in an open economy and the macroeconomics of a monetary union. After completing the course, students should be able to give reasonable answers to questions like: What is the balance of payments account? What is the asset-market approach to exchange rate determination? How does the conduct of monetary and fiscal policy change in the open economy? What is an Optimum Currency Area? Students will be able to understand these issues drawing on the simple framework introduced in the course. Top students will be able to develop own arguments and debate their opinions about these issues.

Literature:

The lecture slides will be self-contained, integrating and extending some material from different sources. However, the course will be following very closely the textbook by Krugman, Obstfeld, and Melitz.
The primary reference for the course is:
Krugman, Paul R., Obstfeld, Maurice, and Melitz, Marc (2015), International Economics: Theory and Policy, Pearson, 10th Edition.
Further references will be provided throughout the course, particularly when discussing empirical evidence.

Course Outline:
• National Income Accounting and the Balance of Payments
• Exchange Rates and the Foreign Exchange Market
• Money, Interest Rates, and Exchange Rates
• Price Levels and the Exchange Rate in the Long Run (LooP and PPP)
• Output and the Exchange Rate in the Short Run (IS-LM Model of an Open Economy)
• Fixed Exchange Rates and Foreign Exchange Intervention
• International Monetary Systems: An Historical Overview
• Optimum Currency Areas and the Euro
• Financial Globalization: Opportunity and Crisis

Location:

Hohenheim

Module:

• 5201-210 Basic Module European Economics and Politics (compulsory)
• 5201-230 International Macroeconomics and Finance (compulsory)