International Finance & Monetary Theory

Pre-req: SIPAU6401 - Macroeconomic Analysis. This is a theory and applications course in international macroeconomics and finance. It provides students with tools to analyze real-life international economic policy and financial market situations. The class is primarily meant for those interested in working at international institutions, in diplomatic service, and in the financial sector or media. Lectures are relatively rigorous, though if the student has some first-year economics and knows basic algebra and graphs, they will easily handle the material. While theory is central, policy and market relevance are emphasized through i) discussions on topical issues, ii) study of key episodes to illustrate ideas, and iii) relevant pieces of policy/media/finance sector analysis. In terms of topics, part one will develop analytic frameworks to understand exchange rates in terms of short- and long-term determinants, the balance of payments, and the interaction between the macroeconomic policy, the exchange rate, and macroeconomic outcomes. Then, part two will cover various advanced topics such as the choice of exchange rate regime, the euro, currency crashes, default, and financial crises.