International Monetary Economics and Finance4 units
Topics to be discussed in this course include the monetary and financial aspects of international transactions; development of a model of international monetary organization that integrates foreign exchange and Eurocurrency markets, based on transactional analysis of the behavior of multinational firms, banks, and monetary authorities; and extension of this model to the European Unified Currency, the Euro. We will also analyze alternative exchange rate regimes, from gold standard to managed floats; parity conditions; relations among spot exchange rates, forward rates, interest rates, and inflation rates, with emphasis on their empirical content; balance of payments and net international asset position accounts and alternative concepts of surplus and deficit; the Mundell-Fleming model; and such topical issues as the Asian crisis, with special emphasis on Japan and the evolving role of the International Monetary Fund. Concepts will be illustrated with international financial data, stressing empirical evidence and applications to policy and business problems.
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