Global Economics II

Objectives

The aim of this course is to use simple analytical tools to discuss problems raised by the openness of an economy to international trade in assets. The course covers the main topics in International Monetary Economics, including the theories of exchange rate determination, stabilization policies under fixed and flexible exchange rates, the choice of an exchange rate regime, and the European Monetary Union.

General characterization

Code

1114

Credits

7.5

Responsible teacher

António Miguel Lebre de Freitas

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites

Mandatory Precedence:  1101. Principles of Macroeconomics 


Bibliography

The main readings are:

[KOM] Krugman, P., Obstfeld, M. Melitz, M., 2012. International Economics, 9th ed. Pearson

[FT] Feenstra, R. and Taylor, A, International Economics, 2nd edition, Worth Publishers, 2012.

In specific topics, we will make use of:

Terra, C., 2015, Principles of International Finance and Opne Economy Macrieconomics, Academic Press.

Uribe, M., Scmitt-Grohé, 2013. International Macroeconomics (Uribe's home page)



Teaching method

The course will be delivered through two lectures (1.5 hours each) and one tutorial session (1.5 hours) each week. The theoretical arguments will be presented in the lectures. Exercises will be tackled in the tutorials.


Evaluation method

Regular Exam Period:  Mid-term assessment 50% Final exam: 50%

Resit Exam Period Final exam: 100%

Grade Improvement in Regular Exam Period Mid-term assessment: 50% Final exam: 50%

Grade Improvement in Resit Exam Period Final exam: 100%


Subject matter

National income accounting and Balance of Payments: (FT5).

Consumption and the current account (FT6).

Investment, savings, and the current account (FT6).

The Real exchange rate (FT11.1).

Exchange rates in the long run (FT3).

Fixed exchange rates in the long run (FT 9).

The Foreign Exchange Market (FT2).

Money, interest rates and the exchange rate in the short run (FT4, 11.2, KOM 15)

Output and the exchange rate under float (KOM 17).

Fixed exchange rates in the short run (KOM 17).

Fixed versus floating (FT8).

Optimal currency areas and the European Monetary Union (FT10).


Programs

Programs where the course is taught: