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Lecture International Macroeconomics and Finance

  • Course Information

    Lecturer:
    Bernd Hayo, Professor of Macroeconomics
    Course format:
    2 hours lecture
    2 hours tutorial
    Time and place:
    Please check the information on Marvin.
    Target group:
    Master students

  • Course Description

    National economies become increasingly intertwined as a consequence of globalisation. This lecture discusses fundamental issues of international macroeconomics and finance. In particular, using verbal, graphical, and mathematical methods, we will study determinants of the exchange rate and the current account as well as macroeconomic policy in open economies. The theoretical exposition is complemented by empirical sections. I expect that students prepare for the lectures and actively participate in the class room.

  • Syllabus

    I.  Macroeconomic Principles of Open Economies
    1. National Accounting in Open Economies
    2. Classical Model    
    3. Exchange Rate
    4. Exchange Rate Regimes
    5. Interest Rate Parities
    6. Purchasing Power Parities   

    II. The Balance of Payments
    1. The Balance of Payment in the National Accounts
    2. Theories of Balance of Payment Equilibrium
        2.1 Exchange Rate and Current Account
        2.2 Price-Specie-Flow
        2.3 Intertemporal Balance of Payment Theory

    III. International Macroeconomics and International Finance
    1. Flexible Prices: The Monetary Model
    2. Fixed Prices: Mundell-Fleming Model (IS/LM/ZZ-Model)
    3. Fixed Prices: International business Cycle Linkages
    4. Sticky Prices: Dornbusch-Model
    5. Portfolio-Model

  • Literature

    Core course text:
    Copeland, L. (2008), Exchange Rates and International Finance, 5. ed., Harlow: Pearson.

    Learning material:
    You will find additional learning material, in particular lecture slides, on the learning platform “Ilias”.

  • Evaluation