International Macroeconomics

This course is about macroeconomic problems and issues related to international economic relations. The course covers foreign exchange markets and –crises, current account balances and imbalances, and macroeconomic policies in open economies.

Knowledge

You learn

• about the macroeconomic interrelations arising among open economies
• about the interactions among aggregate economic activity, inflation, current account imbalances and exchange rates
• the functioning of foreign exchange markets
• about the scope of monetary and fiscal policies
• the history of world monetary systems
• about the international character of financial crises

Skills

You should be able to

• understand the implications of current account imbalances
• distinguish different forces that may determine exchange rates and interest rates on financial markets
• classify the channels through which external shocks affect domestic output and prices in the open economy
• understand aims and consequences of different types of fiscal and monetary policies
• elaborate merits and drawbacks of different exchange rate systems (fixed versus flexible, reserve-based systems, currency unions)
• draw international comparisons by means of standard indicators of price levels and reaø exchange rates
• use formal models to forecast or estimate variables of interest (e.g. expected rates of return to some investment) that depend on macroeconomic variables like inflation differentials, growth grapphs, exchange rates

General competence

You should be able to

• follow economic reasoning related to the course in the public debate and professional reports

2 hours of lectures every week. Information about tutorials and compulsory activity will be announced at the beginning of the term.