Political Economy of Finance

This course provides an introduction to the political economy of financial and international monetary policy, presenting both theoretical perspectives and more policy-oriented concerns.  The course requires no knowledge of formal economic models, but it does presume familiarity with basic concepts in open economy macroeconomics and finance. Students without this background may find several sections of the course very difficult. The course has three main sections.  The first examines the political economy of the global monetary system.  We begin by surveying the evolution of international monetary arrangements from the gold standard period to the present day.  Then we analyze the difficulties posed by floating rates and capital mobility as well as the global imbalances that have been frequent features of contemporary times.  In addition, we examine the Euro crisis and trace its origins to the establishment of the monetary union.  The second section examines the political economy of financial policy, regulation and central banking.  The role of financial policy in economic development, especially of industry, in developing and emerging market countries is the primary lens for exploring this topic.  The final section considers financial crises, with a special focus on the Asian financial crisis of 1997/98 and 2007/08 global crisis that had its origins in the United States.