International Finance & Monetary Theory

​​​​​​​Prerequisite Course: Macroeconomic Analysis. This is a theory and applications course in international macroeconomics and finance. It provides students with the basic tools to analyze real-life macroeconomic, policy, and financial market situations. The course is suitable for students interested in working at domestic or international policy institutions, in the diplomatic service, the financial sector, or the media.

Lectures are fairly rigorous, though students with some first-year economics, basic algebra, and an understanding of graphs should be able to handle the material. While theory is central, policy and market relevance are emphasized through: (i) discussions of topical issues; (ii) examination of key historical and current episodes to illustrate concepts; and (iii) relevant analysis from policy institutions, the media, and the financial sector.

The course is organized into three parts. Part one develops analytical frameworks for understanding exchange rates in terms of their short- and long-term determinants. Part two explores the balance of payments and the interactions among macroeconomic policy, exchange rates, and macroeconomic outcomes. Part three covers advanced topics, including the choice of exchange rate regime, the euro, currency crashes, and defaults.