Course Description: The course will explore current issues, models, and debates in the international finance and open-economy macroeconomics literature. Topics to be covered include international financial transactions and the determination of the current account balance, models of exchange-rate determination, monetary and fiscal policy in open economies, optimal  currency areas, currency crises, and the international financial architecture.

Prerequisites: (ECN 301 or ECN 311) and ECN 302.

Credits: 3 Credits

Recommended Text: Krugman, Obstfeld & Melitz, International Finance: Theory and Policy, 11th Edition, 2018. Older editions are acceptable. Additional readings and course materials (problem sets, practice problems, review materials, etc.) will be posted to our course Blackboard site throughout the semester.

Course Requirements: Course grades will be based on performance on problem sets, weekly quizzes, and a research project due at the end of the summer session. The following weights   apply:

Problem Sets (3)          40%

Weekly Quizzes (5)       30%

Research Project          30%

Problem Sets: will be given bi-weekly and will be posted on Blackboard and are to be handed in via Blackboard or email. Problem sets will consist of short answer/graphical questions covering  material from the readings and lectures. Late assignments will be accepted; however, one grade   (e.g. A to B) will be deducted for each day late.

Weekly Quizzes: will be taken via Blackboard and consist of 25 multiple choice questions covering the material from the readings and lectures of the previous week.

Research Project: will consist of a five-page (double-spaced) paper discussing a topic of your   choice. A single page proposal outlining the topic chosen, motivation and one preliminary reference must be submitted by Friday 7/21. The final paper, including a list of references, is due at the conclusion of the course (8/11).

The topic could be related to course material or could discuss another international trade/finance topic (my approval is required in these cases). The paper is expected to first describe the major   contributions on the topic and the current state of the literature, citing at minimum five scholarly sources. Second, the paper must include at least one possible extension/addition/improvement to that literature. The proposed extension(s) must clearly:

•   Identify why such extension is important. Using considerable motivational detail, you should indicate the contribution to the economics literature.

•   Describe the expected result of your extension/addition/improvement since this is not a complete research project. If your extension is theoretical, explain the transmission mechanisms involved and their expected impact on the variable or subject you are analyzing. If your addition is empirical, specify and justify your research methodology (econometric models, case studies, games, experiments, etc.) and the source and description of the key variables. If you use new variables describe in detail how you would construct this variable.

There will be NO extra credit for equity reasons; however, problem sets and weekly quizzes may be curved at the discretion of the professor. Upward trends in performance may also receive extra weight. Office hour participation, although not directly reflected in the course grade, can also positively impact the final grade. I encourage you to raise questions not only about the course content, but also about the level and pacing of the course.

Grading errors should be brought to the attention of the instructor immediately. In case you believe a grading error was made on a problem set or quiz, you may submit a written request for re-grade within one week of the assignment/exam being returned through email.

Grading Table:

Attendance: As an asynchronous course, there is no explicit attendance component of your grade – all lectures are pre-recorded and uploaded to our course Blackboard site. Timely viewing of lecture is essential for keeping pace with the condensed course material.

Course Schedule:

You are responsible for completing assigned readings prior to attending/viewing lectures. During lectures we will regularly extend the material beyond the readings, thus familiarity with the         material will be essential to following the presented material.

Week of:

7/3

Chapter(s)

1, 2

Topics Covered

Introduction

World Trade Overview; Firms in Global Economy

National Income Accounts

Current Account; Capital Mobility;

7/10

2, 3

National Income Accounts

Government Intervention, the CA & NFA Accumulation

Exchange Rates

Nominal vs. Real; Currency Fluctuations and the CA; Demand-Based Model of Exchange Rates

Exchange Rate Pass Through; Interest Rate Parity; Role of Expectations

7/17                4                                 Money

Function/Measurement of Money; Monetary Policy  Link between Money and Foreign Exchange Markets International Monetary Policy Linkages;

Monetary Neutrality

*Research Paper proposal due Fri 7/21

7/24                 5, 6                             Exchange Rates in Long Run

LOOP & PPP; Monetary Approach; Classical Dichotomy

Short-Run Exchange Rate Fluctuations

Business Cycle Fluctuations; Goods vs. Asset Markets;