Course 2024-2025 a.y.

1. Global imbalances. Trade balance and the current account.
2. Empirical puzzles on exchange rates. Business cycles in emerging markets and advanced economies
3. Current account sustainability. The intertemporal theory of the current account.
4. Current account and endogenous production
5. Twin deficits: fiscal deficits and the current account
6. Real exchange rates and purchasing power parity (PPP)
7. The TNT model and the determinants of the real exchange rate
8. International capital market integration. Capital controls.
9. Nominal rigidity, exchange rate policy and unemployment. Currency unions. Managing currency pegs.
10. Balance of payment crises and inflationary finance.
11. Sovereign debt default.
12. Monetary policy and the exchange rate in New Keynesian (NK) open economy models. Imperfect exchange rate pass-through. Producer currency pricing, local currency pricing, dominant currency paradigm.
13. Financial frictions in open economy models. The exchange rate disconnect and the Mussa puzzles.

Understand the behavior of exchange rates, analyze the transmission of monetary policy across countries, understand the origins of financial and sovereing debt crises.

• Use some fundamental concepts in international macroeconomics and finance, such as exchange rate regime, monetary policy spillovers, international capital mobility and financial markets, which are likely to be very useful in their career.
• Apply the knowledge acquired during the course to evaluate the consequences of a financial and sovereigng debt crisis for the firm or organization they join after they graduate.
• Predict and assess the response of the central bank and the government to shocks originating in international markets.
• Evaluate and compare the economic forecasts and views on the state of the economy made available in the internet and other media.
• Use such analysis in many of the decisions (pricing, portfolio, business investment, hiring, etc.) they are soon called to make throughout their working career.

• Lectures
• Individual works / Assignments

• The material is mostly taught through traditional face-to-face lectures. In addition, the instructor teaches several tutorials throughout the course. During each tutorial, the concepts introduced during the lectures are used to answer questions and solve problems that are similar to those on the typical written examination.
• In addition, the instructor makes available (on the course website on Bboard) a list of links to books, very recent articles or blog posts on topics that are discussed in class - with comments aimed at clarifying how each of them is related to the models and concepts introduced during lectures. Some of these readings are used by the instructor as the starting point for 'case-study' discussions aimed at showing students how the concepts studied in the course can be used to interpret real-world economic events.
• Finally, during the semester, the instructor hands out a total of four problem sets, which students are strongly recommended to solve to make sure they are up to speed with the course. In some cases, problem sets include problems which have a similar structure to those on the final examination.

Teaching materials

ATTENDING AND NOT ATTENDING STUDENTS