25752 - International Finance

Learning outcomes

This course deals with the monetary and macroeconomic relations between countries. Particular attention will be devoted to modern theories relating to the balance of payments and exchange rate determination.

At the end of the course, the student will be able to analyze important issues such as:

• Economics costs and benefits of the introduction of the euro and the effects on European consumers and producers
• The relationship between the euro and the dollar and the future role of the euro in foreign exchange and financial markets
• The optimal choice of exchange rate system, with a focus on emerging  economies

      

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Course contents

1. Some basic concepts in international finance: the balance of payments
2. Some basic concepts in international finance: the foreign exchange market
3. Spot and forward exchange rates: some more basic issues
4. Alternative exchange rate regimes and monetary policy
5. Exchange rate determination: the purchasing power parity
6. Exchange rates, interest rates and the trade balance
7. The debate on fixed vs. flexible exchange-rate regimes
8. The European Monetary Union. Monetary policy and the European Central Bank
9. The international role of the euro

Readings/Bibliography

Keith Pilbeam, International Finance, Palgrave, third edition, 2006.

Additional references will be suggested in class.

Assessment methods

There will be a written exam at the end of the course

Office hours

See the website of Giorgio Bellettini